california grocer issue 2, 2016

72
Shopping For MERGERS AND ACQUISITIONS CALIFORNIA GROCERS ASSOCIATION 2016, ISSUE 2 IN THIS ISSUE Exploring Tomorrow Today Saving The Planet... Quietly Foundation Inducts Industry Execs PRSRT STD US Postage Paid Permit No. 1401 Sacramento, CA For the latest industry news visit www.cagrocers.com

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California Grocer, Issue 2, 2016

TRANSCRIPT

Page 1: California Grocer Issue 2, 2016

Shopping For MERGERS AND ACQUISITIONS

CALIFORNIA GROCERS ASSOCIATION 2016 ISSUE 2

IN THIS ISSUE

Exploring Tomorrow Today

Saving The Planet Quietly

Foundation Inducts Industry ExecsPRSRT STDUS Postage PaidPermit No 1401Sacramento CA

For the latest industry news visit wwwcagrocerscom

September 25-27 2016Palm Springs California

The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability

Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations

As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty

GATHER LEARN PROFIT

Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing

The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year

The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences

SPONSORSHIP OPPORTUNITIES

The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers

As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies

MARK YOUR CALENDAR

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo

Steve Burns

CA GROWN

For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact

Beth Wright

Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

wwwcgastrategicconferencecom

UNIQUE SPONSORSHIPS

We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers

Sunday September 25

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Monday September 26Monday September 26Monday September 26

Collaborative Share Groups

Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Collaborative Share Groups

Opening Remarks and General Session Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address

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MY

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September 25-27 2016Palm Springs California

The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability

Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations

As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty

GATHER LEARN PROFIT

Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing

The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year

The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences

SPONSORSHIP OPPORTUNITIES

The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers

As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies

MARK YOUR CALENDAR

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo

Steve Burns

CA GROWN

For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact

Beth Wright

Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

wwwcgastrategicconferencecom

UNIQUE SPONSORSHIPS

We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers

Sunday September 25

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Monday September 26Monday September 26Monday September 26

Collaborative Share Groups

Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Collaborative Share Groups

Opening Remarks and General Session Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address

C

M

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CM

MY

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CMY

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CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM

CHAIRMAN APPOINTMENTS

Kevin Arceneaux Mondelez International Inc

Phil Miller CampS Wholesale Grocers

Dave Jones Kellogg Company

EXECUTIVE COMMITTEE

Chairman of the Board Kevin Konkel Raleyrsquos

First Vice Chair Diana Godfrey Smart amp Final Stores

Second Vice Chair Jim Wallace Albertsons Companies Inc

Treasurer Bob Parriott Twain Harte Market

Secretary Kendra Doyel Ralphs Grocery Company

Immediate Past Chair Joe Falvey Unified Grocers Inc

INDEPENDENT OPERATOR

COMMITTEE CHAIR

DIRECTORS Raul Aguilar Anheuser-Busch InBev

Jon Alden Jelly Belly Candy Co

Renee Amen Super A Foods

Teresa Anaya Northgate Gonzalez Markets

Joe Angulo El Super (Bodega Latina)

Rich Arnold Oberto Brands

Denny Belcastro Kimberly-Clark Corp

Bob Bukovec Tyson Foods Inc

Paul Cooke Nestleacute Purina PetCare

Brent Cotten The Hershey Company

Willie Crocker Bimbo Bakeries USA

Steve Dietz Tonyrsquos Fine Foods

Ted Gardner Rio Ranch Markets

Jon Giannini Nutricion Fundamental Inc

Dick Gong G amp G Supermarket Inc

Robin Graf Whole Foods Market

Ryan Jost Procter amp Gamble

Arthur D Jackson Jr Costco Wholesale

Michel LeClerc North State Grocery Inc

Eric Lindberg Jr Grocery Outlet Inc

Dave Madden MillerCoors

Jonathan Mayes Albertsons Companies Inc

Joe McDonnell Campbell Soup Company

Mark McLean CROSSMARK

Casey McQuaid E amp J Gallo Winery

Mario Mediati The Clorox Company

Lynn Melillo Bristol Farms

Dan Meyer Stater Bros Markets

Hee-Sook Nelson Gelsonrsquos Markets

Nicole Pesco Save Mart Supermarkets

Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets

Mike Ridenour The Kraft Heinz Company

Casey Rodacker Mar-Val Food Stores Inc

Dean Ryan Tops Fresh Market

Denny Silva Coca-Cola Refreshments

Doug Todd PepsiCo Inc

Jim Van Gorkom NuCal Foods

Michael Walton Unilever

Kevin Young Youngrsquos Payless Market IGA

C G A | Board of Directors

Dennis Darling Foods Etc

|

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2

FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising

Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable

Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future

Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement

COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4

From The Chair Growing People Growing Grocery 6

Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8

Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20

Perspective Competing Ballot Measures to Increase Taxes and Wages 23

Inside the Beltway POS Credit Card Fraud Escalates 28

Washington Report Challenges Continue for EMV Implementation 30

DEPARTMENTSCGA News 10

15 Minutes With 64

Advertiser Index 68

C O N T E N T S | Issue 2

CALIFORNIA GROCERS ASSOCIATION

PresidentCEO Ronald Fong

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Senior Vice President Business Development amp Marketing Doug Scholz

Vice President Communications Dave Heylen

Controller Gary Brewer

Executive Director CGA Educational FoundationShiloh London

Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright

Director CGA Educational Foundation Brianne Page

California Grocer is the official publication of the California Grocers Association

1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association

Publisher Ronald Fong E-mail rfongcagrocerscom

Editor Dave Heylen E-mail dheylencagrocerscom

Associate Editor Tony Ortega E-mail tortegacagrocerscom

For advertising information contact Tony Ortega E-mail tortegacagrocerscom

38

50

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P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

bull Multi-Million Dollar National Advertisingbull 1 All-Natural Jerkybull Bringing New Customers to the Category

YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN

YOU GET OUT WHAT YOU PUT INTM

Retail moves quickly Does your accountant

Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed

WWWMOSSADAMSCOMRETA IL

Certified Public Accountants | Business Consultants

F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

and aggravation Detailed reporting from

an accountable partner

Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money

Cart Maintenance Reduce cart cleaning and

maintenance costs Lower new cart acquisition

expenses On-site quick return-to-action

convenience

Coupon Redemption Receive and reinvest manufacturer

reimbursement money faster Avoid costly chargebacks enjoy

one-stop convenience Zero upfront costs or counting

and sorting hassles

wwwcartretrievalnet1-800-252-4613

(818) 563-3031

CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

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V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

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Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

C

AL

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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CA

LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

OR

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

LIF

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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LIF

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

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LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

GR

OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

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UT

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WIT

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 2: California Grocer Issue 2, 2016

September 25-27 2016Palm Springs California

The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability

Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations

As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty

GATHER LEARN PROFIT

Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing

The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year

The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences

SPONSORSHIP OPPORTUNITIES

The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers

As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies

MARK YOUR CALENDAR

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo

Steve Burns

CA GROWN

For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact

Beth Wright

Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

wwwcgastrategicconferencecom

UNIQUE SPONSORSHIPS

We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers

Sunday September 25

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Monday September 26Monday September 26Monday September 26

Collaborative Share Groups

Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Collaborative Share Groups

Opening Remarks and General Session Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address

C

M

Y

CM

MY

CY

CMY

K

CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM

September 25-27 2016Palm Springs California

The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability

Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations

As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty

GATHER LEARN PROFIT

Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing

The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year

The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences

SPONSORSHIP OPPORTUNITIES

The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers

As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies

MARK YOUR CALENDAR

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo

Steve Burns

CA GROWN

For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact

Beth Wright

Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

wwwcgastrategicconferencecom

UNIQUE SPONSORSHIPS

We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers

Sunday September 25

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Monday September 26Monday September 26Monday September 26

Collaborative Share Groups

Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Collaborative Share Groups

Opening Remarks and General Session Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address

C

M

Y

CM

MY

CY

CMY

K

CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM

CHAIRMAN APPOINTMENTS

Kevin Arceneaux Mondelez International Inc

Phil Miller CampS Wholesale Grocers

Dave Jones Kellogg Company

EXECUTIVE COMMITTEE

Chairman of the Board Kevin Konkel Raleyrsquos

First Vice Chair Diana Godfrey Smart amp Final Stores

Second Vice Chair Jim Wallace Albertsons Companies Inc

Treasurer Bob Parriott Twain Harte Market

Secretary Kendra Doyel Ralphs Grocery Company

Immediate Past Chair Joe Falvey Unified Grocers Inc

INDEPENDENT OPERATOR

COMMITTEE CHAIR

DIRECTORS Raul Aguilar Anheuser-Busch InBev

Jon Alden Jelly Belly Candy Co

Renee Amen Super A Foods

Teresa Anaya Northgate Gonzalez Markets

Joe Angulo El Super (Bodega Latina)

Rich Arnold Oberto Brands

Denny Belcastro Kimberly-Clark Corp

Bob Bukovec Tyson Foods Inc

Paul Cooke Nestleacute Purina PetCare

Brent Cotten The Hershey Company

Willie Crocker Bimbo Bakeries USA

Steve Dietz Tonyrsquos Fine Foods

Ted Gardner Rio Ranch Markets

Jon Giannini Nutricion Fundamental Inc

Dick Gong G amp G Supermarket Inc

Robin Graf Whole Foods Market

Ryan Jost Procter amp Gamble

Arthur D Jackson Jr Costco Wholesale

Michel LeClerc North State Grocery Inc

Eric Lindberg Jr Grocery Outlet Inc

Dave Madden MillerCoors

Jonathan Mayes Albertsons Companies Inc

Joe McDonnell Campbell Soup Company

Mark McLean CROSSMARK

Casey McQuaid E amp J Gallo Winery

Mario Mediati The Clorox Company

Lynn Melillo Bristol Farms

Dan Meyer Stater Bros Markets

Hee-Sook Nelson Gelsonrsquos Markets

Nicole Pesco Save Mart Supermarkets

Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets

Mike Ridenour The Kraft Heinz Company

Casey Rodacker Mar-Val Food Stores Inc

Dean Ryan Tops Fresh Market

Denny Silva Coca-Cola Refreshments

Doug Todd PepsiCo Inc

Jim Van Gorkom NuCal Foods

Michael Walton Unilever

Kevin Young Youngrsquos Payless Market IGA

C G A | Board of Directors

Dennis Darling Foods Etc

|

CA

LIF

OR

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2

FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising

Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable

Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future

Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement

COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4

From The Chair Growing People Growing Grocery 6

Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8

Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20

Perspective Competing Ballot Measures to Increase Taxes and Wages 23

Inside the Beltway POS Credit Card Fraud Escalates 28

Washington Report Challenges Continue for EMV Implementation 30

DEPARTMENTSCGA News 10

15 Minutes With 64

Advertiser Index 68

C O N T E N T S | Issue 2

CALIFORNIA GROCERS ASSOCIATION

PresidentCEO Ronald Fong

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Senior Vice President Business Development amp Marketing Doug Scholz

Vice President Communications Dave Heylen

Controller Gary Brewer

Executive Director CGA Educational FoundationShiloh London

Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright

Director CGA Educational Foundation Brianne Page

California Grocer is the official publication of the California Grocers Association

1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association

Publisher Ronald Fong E-mail rfongcagrocerscom

Editor Dave Heylen E-mail dheylencagrocerscom

Associate Editor Tony Ortega E-mail tortegacagrocerscom

For advertising information contact Tony Ortega E-mail tortegacagrocerscom

38

50

44

54

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LIF

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3

P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

CA

LIF

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

bull Multi-Million Dollar National Advertisingbull 1 All-Natural Jerkybull Bringing New Customers to the Category

YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN

YOU GET OUT WHAT YOU PUT INTM

Retail moves quickly Does your accountant

Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed

WWWMOSSADAMSCOMRETA IL

Certified Public Accountants | Business Consultants

F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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LIF

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6

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V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

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LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

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9

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

A N

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

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NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

LIF

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18

CA

LIF

OR

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

CA

LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

LIF

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

ER |

51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

GR

OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

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Hhellip

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California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 3: California Grocer Issue 2, 2016

September 25-27 2016Palm Springs California

The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability

Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations

As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty

GATHER LEARN PROFIT

Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing

The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year

The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business

Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences

SPONSORSHIP OPPORTUNITIES

The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers

As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies

MARK YOUR CALENDAR

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo

Steve Burns

CA GROWN

For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact

Beth Wright

Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom

ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo

Kurt EricksonVallarta Supermarkets

wwwcgastrategicconferencecom

UNIQUE SPONSORSHIPS

We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers

Sunday September 25

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Monday September 26Monday September 26Monday September 26

Collaborative Share Groups

Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address

Illuminators Golf Tournament

Opening General Session

Opening Reception

After-hours Social Event

Collaborative Share Groups

Opening Remarks and General Session Opening Remarks and General Session

Pre-Scheduled Business Meetings

Reception amp Illuminators Special Event

Multiple Educational Sessions amp Retailers Spotlight

Pre-scheduled Business Meetings

Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address

C

M

Y

CM

MY

CY

CMY

K

CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM

CHAIRMAN APPOINTMENTS

Kevin Arceneaux Mondelez International Inc

Phil Miller CampS Wholesale Grocers

Dave Jones Kellogg Company

EXECUTIVE COMMITTEE

Chairman of the Board Kevin Konkel Raleyrsquos

First Vice Chair Diana Godfrey Smart amp Final Stores

Second Vice Chair Jim Wallace Albertsons Companies Inc

Treasurer Bob Parriott Twain Harte Market

Secretary Kendra Doyel Ralphs Grocery Company

Immediate Past Chair Joe Falvey Unified Grocers Inc

INDEPENDENT OPERATOR

COMMITTEE CHAIR

DIRECTORS Raul Aguilar Anheuser-Busch InBev

Jon Alden Jelly Belly Candy Co

Renee Amen Super A Foods

Teresa Anaya Northgate Gonzalez Markets

Joe Angulo El Super (Bodega Latina)

Rich Arnold Oberto Brands

Denny Belcastro Kimberly-Clark Corp

Bob Bukovec Tyson Foods Inc

Paul Cooke Nestleacute Purina PetCare

Brent Cotten The Hershey Company

Willie Crocker Bimbo Bakeries USA

Steve Dietz Tonyrsquos Fine Foods

Ted Gardner Rio Ranch Markets

Jon Giannini Nutricion Fundamental Inc

Dick Gong G amp G Supermarket Inc

Robin Graf Whole Foods Market

Ryan Jost Procter amp Gamble

Arthur D Jackson Jr Costco Wholesale

Michel LeClerc North State Grocery Inc

Eric Lindberg Jr Grocery Outlet Inc

Dave Madden MillerCoors

Jonathan Mayes Albertsons Companies Inc

Joe McDonnell Campbell Soup Company

Mark McLean CROSSMARK

Casey McQuaid E amp J Gallo Winery

Mario Mediati The Clorox Company

Lynn Melillo Bristol Farms

Dan Meyer Stater Bros Markets

Hee-Sook Nelson Gelsonrsquos Markets

Nicole Pesco Save Mart Supermarkets

Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets

Mike Ridenour The Kraft Heinz Company

Casey Rodacker Mar-Val Food Stores Inc

Dean Ryan Tops Fresh Market

Denny Silva Coca-Cola Refreshments

Doug Todd PepsiCo Inc

Jim Van Gorkom NuCal Foods

Michael Walton Unilever

Kevin Young Youngrsquos Payless Market IGA

C G A | Board of Directors

Dennis Darling Foods Etc

|

CA

LIF

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OC

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2

FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising

Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable

Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future

Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement

COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4

From The Chair Growing People Growing Grocery 6

Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8

Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20

Perspective Competing Ballot Measures to Increase Taxes and Wages 23

Inside the Beltway POS Credit Card Fraud Escalates 28

Washington Report Challenges Continue for EMV Implementation 30

DEPARTMENTSCGA News 10

15 Minutes With 64

Advertiser Index 68

C O N T E N T S | Issue 2

CALIFORNIA GROCERS ASSOCIATION

PresidentCEO Ronald Fong

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Senior Vice President Business Development amp Marketing Doug Scholz

Vice President Communications Dave Heylen

Controller Gary Brewer

Executive Director CGA Educational FoundationShiloh London

Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright

Director CGA Educational Foundation Brianne Page

California Grocer is the official publication of the California Grocers Association

1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association

Publisher Ronald Fong E-mail rfongcagrocerscom

Editor Dave Heylen E-mail dheylencagrocerscom

Associate Editor Tony Ortega E-mail tortegacagrocerscom

For advertising information contact Tony Ortega E-mail tortegacagrocerscom

38

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44

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3

P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

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LIF

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

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Retail moves quickly Does your accountant

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F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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LIF

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6

Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

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one-stop convenience Zero upfront costs or counting

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CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

|

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LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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9

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A N

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IFO

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

A N

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

CG

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

OR

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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RS

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

GR

OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

GR

OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

OR

NIA

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OC

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 4: California Grocer Issue 2, 2016

CHAIRMAN APPOINTMENTS

Kevin Arceneaux Mondelez International Inc

Phil Miller CampS Wholesale Grocers

Dave Jones Kellogg Company

EXECUTIVE COMMITTEE

Chairman of the Board Kevin Konkel Raleyrsquos

First Vice Chair Diana Godfrey Smart amp Final Stores

Second Vice Chair Jim Wallace Albertsons Companies Inc

Treasurer Bob Parriott Twain Harte Market

Secretary Kendra Doyel Ralphs Grocery Company

Immediate Past Chair Joe Falvey Unified Grocers Inc

INDEPENDENT OPERATOR

COMMITTEE CHAIR

DIRECTORS Raul Aguilar Anheuser-Busch InBev

Jon Alden Jelly Belly Candy Co

Renee Amen Super A Foods

Teresa Anaya Northgate Gonzalez Markets

Joe Angulo El Super (Bodega Latina)

Rich Arnold Oberto Brands

Denny Belcastro Kimberly-Clark Corp

Bob Bukovec Tyson Foods Inc

Paul Cooke Nestleacute Purina PetCare

Brent Cotten The Hershey Company

Willie Crocker Bimbo Bakeries USA

Steve Dietz Tonyrsquos Fine Foods

Ted Gardner Rio Ranch Markets

Jon Giannini Nutricion Fundamental Inc

Dick Gong G amp G Supermarket Inc

Robin Graf Whole Foods Market

Ryan Jost Procter amp Gamble

Arthur D Jackson Jr Costco Wholesale

Michel LeClerc North State Grocery Inc

Eric Lindberg Jr Grocery Outlet Inc

Dave Madden MillerCoors

Jonathan Mayes Albertsons Companies Inc

Joe McDonnell Campbell Soup Company

Mark McLean CROSSMARK

Casey McQuaid E amp J Gallo Winery

Mario Mediati The Clorox Company

Lynn Melillo Bristol Farms

Dan Meyer Stater Bros Markets

Hee-Sook Nelson Gelsonrsquos Markets

Nicole Pesco Save Mart Supermarkets

Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets

Mike Ridenour The Kraft Heinz Company

Casey Rodacker Mar-Val Food Stores Inc

Dean Ryan Tops Fresh Market

Denny Silva Coca-Cola Refreshments

Doug Todd PepsiCo Inc

Jim Van Gorkom NuCal Foods

Michael Walton Unilever

Kevin Young Youngrsquos Payless Market IGA

C G A | Board of Directors

Dennis Darling Foods Etc

|

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FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising

Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable

Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future

Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement

COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4

From The Chair Growing People Growing Grocery 6

Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8

Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20

Perspective Competing Ballot Measures to Increase Taxes and Wages 23

Inside the Beltway POS Credit Card Fraud Escalates 28

Washington Report Challenges Continue for EMV Implementation 30

DEPARTMENTSCGA News 10

15 Minutes With 64

Advertiser Index 68

C O N T E N T S | Issue 2

CALIFORNIA GROCERS ASSOCIATION

PresidentCEO Ronald Fong

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Senior Vice President Business Development amp Marketing Doug Scholz

Vice President Communications Dave Heylen

Controller Gary Brewer

Executive Director CGA Educational FoundationShiloh London

Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright

Director CGA Educational Foundation Brianne Page

California Grocer is the official publication of the California Grocers Association

1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association

Publisher Ronald Fong E-mail rfongcagrocerscom

Editor Dave Heylen E-mail dheylencagrocerscom

Associate Editor Tony Ortega E-mail tortegacagrocerscom

For advertising information contact Tony Ortega E-mail tortegacagrocerscom

38

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3

P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

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Retail moves quickly Does your accountant

Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed

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F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

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an accountable partner

Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money

Cart Maintenance Reduce cart cleaning and

maintenance costs Lower new cart acquisition

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Coupon Redemption Receive and reinvest manufacturer

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one-stop convenience Zero upfront costs or counting

and sorting hassles

wwwcartretrievalnet1-800-252-4613

(818) 563-3031

CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

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LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

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Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

CA

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

GR

OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 5: California Grocer Issue 2, 2016

FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising

Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable

Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future

Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement

COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4

From The Chair Growing People Growing Grocery 6

Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8

Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20

Perspective Competing Ballot Measures to Increase Taxes and Wages 23

Inside the Beltway POS Credit Card Fraud Escalates 28

Washington Report Challenges Continue for EMV Implementation 30

DEPARTMENTSCGA News 10

15 Minutes With 64

Advertiser Index 68

C O N T E N T S | Issue 2

CALIFORNIA GROCERS ASSOCIATION

PresidentCEO Ronald Fong

Senior Vice President Government Relations and Public Policy Keri Askew Bailey

Senior Vice President Business Development amp Marketing Doug Scholz

Vice President Communications Dave Heylen

Controller Gary Brewer

Executive Director CGA Educational FoundationShiloh London

Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright

Director CGA Educational Foundation Brianne Page

California Grocer is the official publication of the California Grocers Association

1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association

Publisher Ronald Fong E-mail rfongcagrocerscom

Editor Dave Heylen E-mail dheylencagrocerscom

Associate Editor Tony Ortega E-mail tortegacagrocerscom

For advertising information contact Tony Ortega E-mail tortegacagrocerscom

38

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44

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3

P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

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F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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6

Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

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an accountable partner

Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money

Cart Maintenance Reduce cart cleaning and

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Coupon Redemption Receive and reinvest manufacturer

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one-stop convenience Zero upfront costs or counting

and sorting hassles

wwwcartretrievalnet1-800-252-4613

(818) 563-3031

CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

|

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LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

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NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

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CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

CA

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

GR

OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 6: California Grocer Issue 2, 2016

P R E S I D E N T rsquo S M E S S A G E

Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat

Itrsquos been 24 years since the last open seat

Senate election in California Can you remember

who represented California prior to incumbent

Senators Diane Feinstein and Barbara Boxer My

guess is most canrsquot Last year Boxer said she was

throwing in the towel opening the door for a

new senator to be elected in November

Before examining the candidates letrsquos take a

quick look back at how we got here Boxer was

first elected to the Senate in 1992 the same

year Californiarsquos other Senator Diane Feinstein

took office after winning a special election to fill

the term left vacant by the resignation of Pete

Wilson Feinstein was re-elected in 1994 and has

served ever since

On the surface the race for Boxerrsquos seat appears

very low-key Itrsquos a safe bet that a Democrat

will retain this seat (Democrats enjoy an

overwhelming advantage right now in California)

And right now there is one clear leader in the

race Who challenges the frontrunner depends

on what happens in the June 7 primary Before I

explain letrsquos first look at the leading candidates

On the Democratic side California Attorney

General Kamala Harris and Congresswoman

Loretta Sanchez (46-CA) are the two top

frontrunners

As we go to press Harris enjoys a comfortable

lead over both her nearest party rival and

Republican challengers She has garnered the

endorsements of the California Democratic Party

State Controller Betty Yee State Treasurer John

Chiang Assembly Speaker Anthony Rendon and

the SEIU California to name a few Her total

campaign contribution nearly triples that of her

nearest contender Loretta Sanchez Harris would

be the first Indian-American and only the second

African-American woman senator

So what could make the June primary interesting

California uses a ldquojungle primaryrdquo system that

pits all candidates against each other regardless

of party in a primary race The top vote getters

go on to the general election

So while Harris appears a shoe-in for the

November ballot Sanchez is in danger of missing

the cut (not securing the second highest number

of votes in June) and watching the November

elections from the sidelines

A united Republican party is Sanchezrsquos biggest

concern If one GOP candidate runs in the

primary the party could steal the second

General Election ballot spot from Sanchez The

GOP took a major step in this direction when

Republican Senate candidate Rocky Chavez an

Oceanside assemblyman dropped out of the

race in early February

If Sanchez manages to secure the other ballot

spot this could set up a very interesting election

come November While Harrisrsquo numbers are

still considerably higher Sanchez stands to

become the first-ever Hispanic US Senator from

California a prospect that might have significant

appeal to the statersquos ever-growing Hispanic

population Sanchez also is considered more of a

moderate while Harris is seen as a solid liberal

The GOP on the other hand has not won a

Senate race in California since 1988 and any

contender will suffer the additional handicap

of running when the Democratic presidential

nominee is sure to carry California by a wide

margin maybe The wild card continues to be

RONALD FONG

PresidentCEO

|

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4

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

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F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

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6

Grocery Operations We Smooth lsquoem Out

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Cart Retrieval The industry leader in

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FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

|

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LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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9

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A N

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IFO

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

OR

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

GR

OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

GR

OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

OR

NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 7: California Grocer Issue 2, 2016

Donald Trump and his ability to rally the Republican

vote

The top Republican candidates include former state

GOP chair Tom Del Beccaro and George ldquoDufrdquo

Sundheim The GOP field got a little more crowded in

early March with wealthy Silicon Valley businessman

Ron Unz throwing his hat in the ring Unz ran for

Californian governor in 1994 and is probably best

know for authoring Proposition 227 which effectively

eliminated bilingual education in California

Even with a Trump ldquobumprdquo the chances of a Republican

securing Boxerrsquos seat seems like a long shot at best

The real question appears to be whether a more

conservative Democrat or a long-shot Republican

has any real chance of defeating Kamala Harris

Stay tuned n

Nielsen database-latest 52 weeks ending 41115

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F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

CA

LIF

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6

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FOLLOW US ON SOCIAL MEDIA

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V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

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CA

LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

OR

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9

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A N

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IFO

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

A N

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

CG

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

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The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

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NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

OR

NIA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

LIF

OR

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OC

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18

CA

LIF

OR

NIA

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OC

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

ER |

51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

GR

OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 8: California Grocer Issue 2, 2016

F R O M T H E C H A I R

Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources

The grocery business is an integral part of my

life I started working as a courtesy clerk at Bel

Air Market when I was 16 and joined Raleyrsquos

when the company was purchased in 1993

Sometimes the workplace was like a family

reunion for me ndash as many as 11 of my relatives

worked at Raleyrsquos or Bel Air at one point or

another Yoursquod probably describe my family as

having ldquogroceryrdquo in our blood

Irsquove stayed in the business because of the endless

doors of opportunity Prepared or perhaps

not I chose to walk through them and couldnrsquot

imagine working in any other industry Being in

the grocery business soon became my destiny

and I love what we do and who we serve

Of course working and growing the industry

isnrsquot limited to stocking products or managing

a department or supporting stores from the

corporate office We need produce buyers

growers farmers and manufacturers to provide

the food distributors and shippers to move it

from place to place and chefs to provide culinary

inspiration to create new in-store environments

for enjoying food

There are countless opportunities for young

people to join our industry and have a long

rewarding career but itrsquos up to us to find and

inspire them

How do we do that By connecting with young

people and providing resources to support them

in their pursuits

Letrsquos start by promoting STEM education ndash

Science Technology Engineering and Math ndash

for every student We need to fund scholarships

that make it easier for young people to advance

their learning

Our CGA Educational Foundation has supported

thousands of students in their educational

endeavors But most importantly by mentoring

the emerging stars in our communities and

sharing with them our success stories in the

grocery industry

CGA recently celebrated the careers of three

industry veterans Rob McDougall Donna

Tyndall and Bruce Wyatt at our annual Hall

of Achievement dinner They are outstanding

examples of leaders who have personally

invested their time talents and resources into

growing people who grow our companies and

our industry

Many companies in our great industry are

finding innovative ways to educate the industry

At Raleyrsquos wersquore reaching the next generation

through a program called ldquoWhere Your Food

Grows and Grazesrdquo which we developed

in cooperation with local ranchers and the

California Rangeland Trust

Students spend time on a ranch learning how

livestock are cared for and produce is grown and

then they tour one of our stores to find out more

about nutrition and our role in making fresh food

available to them Our goals are to inspire young

people to make good food choices and to share

our industryrsquos opportunities with them

Like farmers our job is to cultivate new talent

and watch it sprout The next generation of

leaders and innovators are out there waiting

for us to inspire them We can help this next

generation blossom grow and reap a harvest n

KEVIN KONKELCGA Chair of the Board

Senior Vice President Store Operations

Raleyrsquos Family of Fine Stores

|

CA

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Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

and aggravation Detailed reporting from

an accountable partner

Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money

Cart Maintenance Reduce cart cleaning and

maintenance costs Lower new cart acquisition

expenses On-site quick return-to-action

convenience

Coupon Redemption Receive and reinvest manufacturer

reimbursement money faster Avoid costly chargebacks enjoy

one-stop convenience Zero upfront costs or counting

and sorting hassles

wwwcartretrievalnet1-800-252-4613

(818) 563-3031

CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

|

CA

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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9

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IFO

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

LIF

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18

CA

LIF

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

OR

NIA

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OC

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

OR

NIA

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OC

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

NIA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 9: California Grocer Issue 2, 2016

Grocery Operations We Smooth lsquoem Out

Operational Eciency Greater Convenience More Money in Your Pocket

Cart Retrieval The industry leader in

shopping cart retrieval Reduce cart-loss expenses

and aggravation Detailed reporting from

an accountable partner

Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money

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Coupon Redemption Receive and reinvest manufacturer

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one-stop convenience Zero upfront costs or counting

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(818) 563-3031

CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502

FOLLOW US ON SOCIAL MEDIA

wwwcartretrievalnet

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

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V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

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Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

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rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

C

AL

IFO

RN

IA G

RO

CE

R

14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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18

CA

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

CA

LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

LIF

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 10: California Grocer Issue 2, 2016

V I E W P O I N T

The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world

The fact is I think it has the potential to do both

Earlier this year we learned that Samsung

had unveiled a new refrigerator at the annual

Consumer Electronics Show (CES) in Las Vegas

But this wasnrsquot just a refrigerator It was a

ldquosmartrdquo refrigerator

Called the Family Hub Refrigerator this piece of

equipment comes with a 215-inch touchscreen

on one of its doors which people can use

to shop for products as they run low or out

Even more impressive the refrigerator also has

cameras inside that keep track of products as

they are removed so it can let people know

when supplies are running low And people

can access all this information from their smart

phones and use them to place orders

Wow Irsquom old enough to remember when

refrigerators didnrsquot even have automatic

defrosting (Young people reading this will have

to trust me on this We used to have to unplug

freezers and refrigerators and put pots of hot

water inside in order to defrost them It was a

total pain in the neck but a routine part of life

(Barbaric huh)

Samsung said that it has partnered with

MasterCard to provide payment services and

to start with MyWebGrocer FreshDirect and

ShopRite for online grocery ordering Needless

to say these platforms are thrilled

ldquoCommerce-enabled devices like the Family

Hub refrigerator represent an unprecedented

opportunity for our customers because it puts

them right where the consumer path to purchase

begins in the kitchenrdquo said Eric Healy president

of MyWebGrocer And Jodi Kahn FreshDirectrsquos

Chief Consumer Officer observed that it created

a ldquofrictionlessrdquo and ldquoseamlessrdquo road between

shopper and shop

Bingo

Not long after Samsung made its announcement

I got an email from Amazon promoting a new

item available on the site ndash a Brita water pitcher

that comes with a filter that enables the consumer

to have cleaner better-tasting water

Except that this was a pitcher with a curveball

ndash because this Brita pitcher is WiFi enabled

KEVIN COUPEFounder

MorningNewsBeatcom

Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen

iStock

|

CA

LIF

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8

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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9

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

CG

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

OR

NIA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

LIF

OR

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18

CA

LIF

OR

NIA

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

OR

NIA

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OC

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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NIA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 11: California Grocer Issue 2, 2016

V I E W P O I N T

It comes the email said ldquoequipped with a built-in

counter that tracks the amount of water that passes

through the pitcherrsquos filter The pitcher itself will

automatically order a new filter through Amazon Dash

Replenishment when the old filter nears its capacity

This new connected pitcher with Amazon Dash

Replenishment gives Brita owners exactly what they

want ndash a new Brita filter on their doorstep at the time

they need itrdquo

Pretty cool

(Irsquom tempted here to tell younger readers that I can

remember a time when we had to fetch water from

the well with a bucket and a rope but Irsquom not quite

that old)

The Brita Infinity Pitcher will cost about 45 bucks

which seems to be about a third more expensive than

most of the Brita pitchers that I found on Amazon

but the argument is that the tech-driven convenience

will make the price difference palatable And I have to

say that I think the argument is pretty compelling Or

to coin a phrase it is an argument that holds water

Innovations along these lines have been much

discussed over the years and it only was a matter of

time before dreams and reality met in such a way

that products like these could become mainstream

Without a doubt wersquore pretty much there products

like the Family Hub Refrigerator or Amazonrsquos

ecosystem-centric strategies (which are tied to the

Echo Subscribe-and-Save the Dash replenishment

system and even the delivery drones that probably

will be flying over our homes one of these days) are

putting us right in the middle of what could turn out

to be a pretty remarkable time And retailers have to

be prepared to embrace this revolution which almost

certainly will unfold faster than anyone expects

Interestingly Ford and Amazon announced at CES that

they are working on an initiative ldquogranting Ford owners

unprecedented access to their connected-home devices

from their cars and vice versardquo

And the Amazon ecosystem expands a little more

What is important to remember here is that once one

buys a refrigerator or a water pitcher it usually will be

quite some time before you have to replace them The

refrigerator only has value if it is filled with food that

you want to eat and the pitcher only has value if you

have the filters that create cleaner tastier water And

so it is critical for companies like Samsung and Brita

to find ways to be more relevant and useful which is

exactly what theyrsquove done

One of the things that traditional retailers have to

realize is that the advent of smart appliances and the

expanding ecosystems being created by some retailer

platforms ndash especially but not limited to Amazon ndash

are combining to create an environment in which it

is less and less necessary for people to actually go to

the store These progressive-minded companies are

creating paths of least resistance that provide few

reasons for consumers to detour elsewhere

Not everybody and not all the time But enough to

have an impact on a lot of bottom lines

One of the things that one finds a lot at food industry

conferences is people who like to cast doubt on the

e-revolution They like to talk about the people who

still want to go to the store about the hiccups that

can affect click-and-collect or delivery services about

how rural customers have different needs than urban

customers and about how selling points like ldquoyour

neighborhood grocerrdquo or ldquohometown proudrdquo or

ldquoold-fashioned servicerdquo or similar tropes are enough

for retailers to hang their hats on when competing in

this new environment

All of this may in fact be true And still not enough

to stave off the impact of technology especially on a

generation of shoppers that does not remember those

ancient pre-Amazon days

Not all people and not all the time But enough to

create leaks in the traditional market shares of a lot

of retailers and manufacturers Leaks that are likely to

grow bigger with time

The future is coming And it is traveling at Warp Eight n

One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution

CA

LIF

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9

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

CG

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

C

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

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NIA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

LIF

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18

CA

LIF

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

CA

LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

OR

NIA

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OC

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

OR

NIA

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OC

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

NIA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 12: California Grocer Issue 2, 2016

CG

A N

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10

Grocers Converge on Sacramento

Grocery retailers and their supplier partners from

throughout California gathered in Sacramento in

late March to share business concerns with their

state representatives on key issues facing the

grocery industry

The face-to-face meetings with the majority of state

legislators highlighted the 2016 CGA Grocers Day

at the Capitol the Associationrsquos one-day member

advocacy event at the Statersquos Capitol

ldquoThis was a critical year for our members to

participate in CGArsquos premier member lobbying

activityrdquo said CGA President Ron Fong ldquoOur

members really stepped up and did a tremendous job

of sharing our story and providing valuable insight

into how our businesses operaterdquo

In addition to the face-to-face meetings attendees

heard from Gov Jerry Brown who addressed a

number of topics including the deal struck with labor

leaders over Easter weekend to introduce legislation

that will raise the statersquos minimum wage to $15

The governor said a deal needed to be struck as

an alternative to a minimum wage proposition

on the November ballot that would be even more

burdensome on Californiarsquos business community

The Governorrsquos remarks were met with skepticism

by the Association who later released a statement

chiding the governor for not including the business

community in its meeting with labor

ldquoOur members are dismayed at the events of the

past three daysrdquo Fong said in a written statement to

the media ldquoMajority Democrats and the Governor

(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA

(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors

(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc

CG

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

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12

Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

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NIA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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CA

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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NIA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

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ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 13: California Grocer Issue 2, 2016

CG

A N

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11

rammed a $5 increase in Californiarsquos minimum

wage through the entire legislative process in

just three days They did so without meaningful

conversation or an opportunity for businesses that

will bear the cost burden to weigh in on the issuerdquo

Attendees were also briefed by CGA staff on the key

issues they would discuss during their legislative

visits These topics included employee scheduling

wine coupons food bank donation tax credits and

the statersquos beleaguered beverage container recycling

program

Following an afternoon of legislative meetings

CGA hosted its annual Presidentrsquos Reception that

allowed Grocers Day attendees to meet again with

state legislators and staff but in a more relaxed

environment

CGA also hosted its popular Ice Cream Social

located this year inside the State Capitol and was

sponsored by Clover Stornetta Farms which provided

the ice cream n

The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day

Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc

Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc

Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final

Breakfast Kellogg Company Save Mart Supermarkets

Luncheon Jelly Belly Candy Co

Ice Cream Social Clover Stornetta Farms Inc

Presidentrsquos Reception Command Packaging MillerCoors

Legislative visits highlighted CGArsquos Grocers Day at the Capitol

Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social

Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA

CG

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Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

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The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

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NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

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S|

C

AL

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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

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Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

LIF

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

CA

LIF

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

OR

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

OR

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

LIF

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26

CA

LIF

OR

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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LIF

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

TO

RS

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 14: California Grocer Issue 2, 2016

CG

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Foundation Selects New Trustee ChairBrad Askeland Vice President

Holiday Markets has

been elected Chair of the

California Grocers Association

Educational Foundation

Board of Trustees Askeland

had previously served as

Foundation Vice Chair

Askeland succeeds former CGAEF Chair Jim Van

Gorkom NuCal Foods who served in that position

since 2011 Mark Johnson Unified Grocers Inc was

elected to replace Askeland as the Boardrsquos Vice Chair

Jacquie Slobom Gelsonrsquos Markets and Jerry Landers

Raleyrsquos will continue as the Foundationrsquos Secretary

and Treasurer respectively

ldquoWe look forward to Brad building on the programs

Jim was instrumental in fosteringrdquo said CGAEF

President Ron Fong

Askelandrsquos responsibilities will be to guide and direct

the CGAEF Board of Trustees The Foundation

was created in 1992 to advance Californiarsquos grocery

industry through employee education industry

research and recognition of excellence

Askeland who has served as a Trustee since 2009

began his grocery career in 1988 as a courtesy clerk

for a small independent market before joining

North State Grocery Inc in 1995 He managed

several stores before being named director of human

resources in 2003 n

SEC Store Tour Features Draegerrsquos MarketThe California

Grocers Associationrsquo

Supplier Executive

Council kicked off

its 2016 Store Tour

series in March at

Draegerrsquos Market in

San Mateo The tour

was led by Richard

Draeger chief

operations officer

for the company

The Draeger executive led the SEC members on an

aisle-by-aisle tour sharing his companyrsquos business

philosophy and strategy Draeger told attendees that

for his company itrsquos not about having the lowest

prices but ldquomaking things easier for the consumerrdquo

He added that shopping local is what makes

Draegerrsquos different

Following the tour SEC members were treated to

a luncheon hosted by Draegerrsquos popular in-store

cooking school To learn more about becoming

an SEC member contact Sunny Porter CGA

at (916) 448-3545 n

New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER

Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes

Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom

Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

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CA

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

CA

LIF

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

OR

NIA

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OC

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

LIF

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

LIF

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

NIA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 15: California Grocer Issue 2, 2016

2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916

The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals

CMYKFOCUS ON ALLERGENSTopical educational sessions and resources

June 5 - 7 | Houston

FOR MORE INFORMATION IDDBAORG 6083105000

REGISTER TODAYEXPANDED EXPO HOURS

NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths

SHOW amp SELL CENTERCAKE DECORATING CHALLENGE

MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH

JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain

CG

A N

EW

S|

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

CA

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

OR

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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NIA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 16: California Grocer Issue 2, 2016

CG

A N

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14

CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in

March the second ldquotoolrdquo in its Grocery Compliance

Toolkit ndash this one focused on the Americans with

Disabilities Act

CGA contracted with the Sacramento-based law firm

of Downey Brand LLP to create a comprehensive

user-friendly ADA compliance guideline In addition

CGA hosted two regional seminars in conjunction

with the release of the ADA compliance ldquotoolrdquo In

addition the CGA Educational Foundation hosted a

one-hour webinar conducted by Downey Brand that

outlined the specifics of complying with the ADA

ldquoCalifornia grocers are increasingly seen as great

targets for opportunistic drive-by ADA public

access lawsuitsrdquo said CGA President Ron Fong

ldquoDespite recent changes to law serial plaintiffs

continue to send demand letters and file frivolous

lawsuits against grocers in an attempt to extract

monetary settlements We created this toolkit to

help retailers fend off these lawsuitsrdquo

The Grocery Compliance Toolkit was created as

a CGA member benefit to help grocery retailers

understand and manage the risks associated with

complying with state regulations related to the

grocery industry

The first ldquotoolrdquo was released last year and focused

on hazardous waste disposal

CGA members can download both the ADA and

hazardous waste disposal ldquotoolsrdquo from CGArsquos website

wwwcagrocerscom along with viewing both

seminars

CGA will release additional compliance ldquotoolsrdquo in the

coming months n

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

CA

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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GR

OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

OR

NIA

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OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 17: California Grocer Issue 2, 2016

2014 2015

Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM

Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years

VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA

SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION

For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute

llaacutemenos o visite nuestra pagina de internet

Variety is the spice of lifeEnjoy it with our award winning

premium authentic line of cheeses

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

LIF

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 18: California Grocer Issue 2, 2016

While that may hold true in the Lone Star State our

friends from Texas may be shocked to find that the

middle of the road in California is a relatively safe

place to be But finding safety on those center lines

wasnrsquot always so easy

Open primaries and the rise of the moderates

particularly on the Democratic side of the aisle have

widened that middle of the road from a dangerously

thin series of narrow yellow stripes to a ten-foot

wide median safe from most passing traffic

In a nation that divides its states into a red column

(for Republicans) and a blue column (for Democrats)

California exists solidly in the blue column with

Democrats holding every statewide office as well as

near supermajorities in both legislative houses

However a closer look reveals unexpected patches of

purple dotting the political map

Within these purple areas are a number of legislative

districts that reflect a uniquely Californian political

identity ndash a laissez faire attitude on social issues

mixed with a more conservative middle-of-the-road

view towards taxes and regulation

It was the voters in these areas the backers of

Proposition 14 had in mind back in 2010 when they

successfully pressed for passage of this initiative

to bring open primaries to California effectively

changing the game of legislative elections in our state

The rationale for passage was simple

In an overall political climate that often forced

candidates to the far-left and far-right during

primary elections in order to cater to the base to

win their partyrsquos nomination the general election

would often leave middle-of-the-road voters from

both parties (as well as independents) with no viable

candidates to support

GO

VE

RN

ME

NT

RE

LA

TIO

NS

Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD

BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo

In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses

Continued on p 18

Aaron Moreno Senior Director

Government Relations CGA

iStock

CA

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17

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

LIF

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

LIF

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

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26

CA

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

TO

RS

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

GR

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 19: California Grocer Issue 2, 2016

If all candidates stood for primary election at the

same time with all voters choosing the top-two vote

getters for the general election regardless of party

open primary backers reasoned that candidates

would have to broaden their appeal to all voters in

a legislative district not to just the ldquotrue believersrdquo

who often decided primary elections The result

would be more moderate legislators be they

Democrat or Republican

This has been the case as

illustrated by the elections

of Republicans Catherine

Baker and David Hadley

in Assembly districts that

had elected Democrats in

previous election cycles Both

won due to their willingness

and ability to speak to voters from

both parties from the primary all the way

to the general election This would not have been

possible without open primaries

The open primary has not only changed the strategy

of candidates looking to enter the Legislature it

has also changed the way interest groups develop

strategies to elect legislators that best represent their

world views

Californiarsquos business interests have been particularly

savvy in adapting to these changes by adopting

strategies for supporting legislative candidates

that were once unheard of There was once a time

when it was automatic that these business interests

only backed Republican candidates This has

changed particularly in districts with a majority of

Democratic voters

In these districts it is not uncommon to see a

general election featuring two Democrats These

types of races provide a perfect synergy between

Democrats running from a more moderate position

and business interests who see a benefit from having

such political perspectives in the Legislature

This new breed of moderate Democrat would

have found it hard to advance out of a traditional

Democratic primary where the winner was decided

by the hard-core base

In the open primary system a moderate Democrat

can not only survive but thrive making it to the

general election by taking positions that appeal not

just to their fellow Democrats but to decline-to-state

and even moderate Republican voters

While remaining socially liberal like more

traditional Democrats moderates stand apart

by taking firm stances against new taxes and

unnecessary government regulation ndash two views

that align them with business interests

around the state

And the business community

has taken note spending

millions of dollars over the

past few years either in direct

donations to candidates

or the establishment of

political action committees

spending on behalf of

a candidate to elect more

moderate Democrats This has had

a big impact on the Legislature particularly in the

Assembly where the informal but highly influential

Moderate Caucus holds sway

Numbering anywhere from 10 to 15 depending on

who you ask and what is up for a vote on a particular

day this bloc of Democrats led by Assemblymembers

Rudy Salas from Bakersfield and Jim Cooper from

Sacramento have had considerable success helping

the business community in recent years by using

their influence to either water down legislation that

would adversely affect business preventing such

bills from being voted on by the full Assembly

or voting with Republicans to kill anti-business

legislation

Some notable business victories facilitated by the

Moderate Democrats during last yearrsquos legislative

DEM

REP

The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views

Continued from p 17

G O V E R N M E N T R E L AT I O N SCONTINUED

|

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18

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

GR

OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 20: California Grocer Issue 2, 2016

CA

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19

G O V E R N M E N T R E L AT I O N S

session were the defeat of legislation that would

have required a 50 percent reduction in petroleum

use in motor vehicles the preventing of legislation

increasing the minimum wage from being heard on

the Assembly Floor and the preventing of legislation

requiring predictive scheduling from also being

heard on the Assembly Floor among others

Business groups such as CGA and others have

benefitted from supporting the candidacies of

these Moderate Democrats While their support

is certainly not 100 percent even their support 50

to 60 percent of the time is enough to stave off the

seemingly never-ending onslaught of legislation that

has the potential to put a damper on the business

climate in California

Those percentages may not seem like much but

when you consider that without open primaries the

Democrats coming from these same Democratic

majority districts would often stand with business

20 percent of the time or less the value of Moderate

Democrats to business is high

So while the middle of the road in Texas may be

nothing more than road kill armadillos and yellow

stripes the medians in California are wide berths

that provide a cushion for business from forces that

donrsquot necessarily have their best interests in mind

We must all do our part to keep that cushion in

place The election of Moderate Democrats whenever

possible is a great way to do so n

Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto

Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats

July 27-28 2016

Register today at

wwwfresnofoodexpocom

For more information contact

Amy Fuentes at 559-227-9999

or infofresnofoodexpocom

Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much

more than just a trade show The Fresno Food Expo is a celebration of Central

Californiarsquos vibrant food community and a showcase of our regionrsquos most

innovative food and beverage producers

Whether you are sourcing for fresh product deli baked goods or beer and wine

the Fresno Food Expo is your opportunity to connect with local trendsetters and

CEOrsquos behind some of the nationrsquos largest food companies right in their backyard

Come sit at our table and join us for an experience

you wonrsquot find anywhere else

Discover the abundance of Central Californiarsquos Food Region

FREE Buyer Registration

raquo Grower amp Manufacturer Site Tours

raquo VIP Event amp Opening Reception

raquo Buyerrsquos Breakfast

raquo Business to Business Trade Show

Your registration includes access to the following events

FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

|

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20

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

CA

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

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26

CA

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

TO

RS

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

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WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 21: California Grocer Issue 2, 2016

C A P I T O L I N S I D E R

Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program

Californiarsquos Beverage Container Recycling

Program was created by legislation 30 years ago

At that time recycling was a new word and the

intent of the program was to change

consumer habit Glass and aluminum

containers were sold with a surcharge

which the consumer would receive

back if they returned the containers

In that day and age people

commonly purchased six-packs

of glass soda bottles from

their grocery store They were

encouraged to bring those

glass containers back to the

store and exchange them

for the next six-pack they

purchased The convenience

of bringing containers back to

the store was the impetus for

the convenience zones created

by the law

At that time curbside recycling

didnrsquot exist nor were there

any real markets for recycled

material

Over the years a lot has

changed in California

Our communities are different

The definition of convenience

has changed Industries reliant

on manufacturing with recycled

materials have been born and are

thriving Most important we have

changed the Californiarsquos throw away culture to

one focused on recycling and reuse

Yet Californiarsquos Bottle Bill has failed to keep up

with the times

Today the perfect storm is brewing

A number of California communities are revolting

against convenience zone recyclers placing fees

and others obstacles before them in an

effort to keep them away

These recyclers while generating the

majority of containers returned through

the program attract patrons that many

community leaders and grocery store

customers prefer not to see in the

parking lot of their local grocery

store

Petroleum prices have driven the

scrap price for plastic to a historic

low making recycled content more

expensive than virgin product

In addition the formula Cal Recycle

uses to determine the overall cost

of recycling has failed to accurately

capture recent increases in minimum

wage and other cost factors These

three elements combined have made

it nearly impossible for convenience

zone recyclers to remain in business

This is evident by the announcement

from RePlanet the Statersquos largest

convenience zone recycler in late

January to decertify 200 locations in

Northern California

The decertification of convenience

zones starts a process for Cal Recycle

First they are required to review the zones

where each site was located They can either

choose to exempt the zone from further service

or change the status of the zone from served to

unserved

LOUIE BROWN

Partner in the

Sacramento office

of Kahn Soares and

Conway LLP

iStock

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C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

OR

NIA

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OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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NIA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 22: California Grocer Issue 2, 2016

C A P I T O L I N S I D E R

The decision to change a zone to unserved triggers an

announcement by Cal Recycle to all dealers in the zone

that they have 30 days to decide to take containers back

in the store or pay the $100 per day ldquoin lieurdquo fee

Cal Recycle is evaluating the zones impacted by the

decertification of RePlanet Since the number of

exempted zones is capped by statute it is expected Cal

Recycle will be forced to change the status on a large

number of zones to unserved and likely impact hundreds

of dealers in northern California This process is expected

to take the next 90 to 120 days to complete

In the meantime CGA and others are developing a

legislative strategy to address these issues before grocers

are required to take action Your legislative team is

focused on a comprehensive solution that takes the

grocer out of the position of the recycler of last resort

along with a number of other changes to bring the

program into 2016 n

iStock

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21

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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NIA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

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ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 23: California Grocer Issue 2, 2016

Dog chow n at u r a l plus vitamins amp minerals

is made with real chicken There ARE no artificial colors

and Yoshiloves itloves itloves it

I makeNO ARTIFICIALCOLORS OR PRESERVATIVES

MADEWITH Real Chicken

ldquo

rdquoBARBARA JDog Chow ProductionDavenport IA

I makeCOLORS OR PRESERVATIVES

New

Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA

reg

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

CA

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

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CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

CA

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 24: California Grocer Issue 2, 2016

P E R S P E C T I V E

Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business

There are several proposed ballot measures that

may be on the November statewide ballot that

would make significant changes to Californiarsquos

minimum wage and tax laws This article takes

a brief look at the four competing tax increase

measures as well as two competing minimum

wage measures

COMPETING TAX INCREASE INITIATIVES FOR

2016 BALLOT

There are four competing tax increase measures

on this yearrsquos ballot They include

n A proposal by the California Hospital

Association and SEIU-UHW that would expand

and make permanent income tax increases

on Californiarsquos highest earners but also allow

Prop 30rsquos sales tax increase to expire in 2016

as scheduled

n A plan by SEIU-UHW and the California

Teachers Association that would extend the

income tax increases under Prop 30 until

2030 and would let the sales tax increase

expire in 2016 as scheduled

n A third measure would impose a significant

surcharge on property valued over $3 million

n A fourth measure would increase the tax on

tobacco products by $2 per pack

ldquoThe School Funding and Budget Stability Act

of 2016rdquo No 15-0065

This measure would extend until 112031 the

personal income tax rates established by Prop

30 and dedicate the funds entirely to schools

without the ability of the Legislature to suspend

or withhold funds even in a state budget crisis

The measure also exempts these funds from

the Statersquos Rainy Day Fund established by voters

in 2014 by Prop 2 (requiring a portion of state

revenues be allocated to the state budget reserve

and to paying down debt)

In Section 3 of the measure the following

statements of purpose and intent are set forth

ldquo(a) The chief purpose of this measure is to

protect our schools by temporarily extending

current income tax rates on wealthy

Californians instead of awarding a huge tax

break to couples earning more than half a

million dollars a year or individuals earning

more than a quarter million Instead of

sending money back into the pockets of the

wealthy this measure sends the money to a

special account that must be spent exclusively

on schools

ldquo(b) This measure is intended to keep California

on a track toward balanced budgets and

reliable funding for schools and community

colleges preventing a new round of

devastating cuts to public education and a

return to the days of chronic budget deficits

and funding cuts

ldquo(c) This measure guarantees in the Constitution

that the revenues it raises for schools will

be sent directly to school districts and

community colleges for classroom expenses

not administrative costs This school funding

cannot be suspended or withheld no matter

what happens with the state budgetrdquo

ldquoThe Invest in Californiarsquos Children Actrdquo

No 15-0070

This measure would make permanent the Prop

30 personal income tax rates after 2019 plus add

additional higher rates for those earning above

$1 million per year (individuals) or $2 million

(married filing jointly) with the highest bracket

of 143 percent and earmark the funds for

CHRIS MICHEL I

Legislative Advocate

Aprea amp Micheli Inc

Continued on p 24

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23

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

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POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 25: California Grocer Issue 2, 2016

education (including preschool and child care as well

as CSU and UC systems) and healthcare

This measure would extend the Prop 30 personal

income tax rates after 2019 plus add an additional

amount for those earning above $1 million per year

with the highest bracket of 143 percent and earmark

the funds for education (including preschool and child

care) and healthcare

Among the numerous intent statements found in

Section 1 of this measure are the following

ldquo(q) The Invest in Californiarsquos Children Act continues

voter approved taxes on Californians earning more

than $290000 a year while also imposing new and

modest taxes on earnings in excess of $1 million per

year These funds will support education healthcare

childcare and preschool

ldquo(r) The Invest in Californiarsquos Children Act also makes

Californiarsquos tax rates fairer If voter approved taxes

on those earning more than $290000 a year expire

as scheduled in 2018 a millionaire will pay the same

marginal income tax rate as an individual making

$57000 a year

ldquo(s) Under The Invest in Californiarsquos Children Act all tax

revenue from this Act is guaranteed to go directly to

education healthcare child care and preschoolrdquo

ldquoLifting Children and Families out of Poverty Actrdquo

No 15-0043

This measure would impose an additional surcharge

on real property with an assessed value of over $3

million The surcharge would be based upon a sliding

scale ranging from 310 of 1 percent for real property

assessed at $3 million to 810 of 1 percent for real

property assessed at $10 million or more The revenue

raised would be allocated to numerous programs

designed to reduce poverty including prenatal services

expanded childcare early childhood education after-

school and summer programs job training grants tax

credits and monetary aid The surcharge would be in

effect for 20 years The LAO estimates increased state

revenues of $6-7 billion annually

California Healthcare Research and Prevention

Tobacco Tax Act of 2016

This measure would impose an additional tax of 100

mills for each cigarette distributed and would apply an

equivalent amount to other tobacco products as well

as electronic cigarettes As a result the cigarette tax

would be increased by $2 per pack There would also

be a floor stock tax for each cigarette The measure

is estimated to raise in excess of $11 billion annually

These additional funds raised would be dedicated

to healthcare as well as research and prevention of

tobacco use

COMPETING MINIMUM WAGE INITIATIVES PROPOSED

FOR 2016 BALLOT

The first of these two measures proposes raising the

statewide minimum wage to $15 per hour The second

measure proposes raising the statewide minimum wage

to $15 per hour as well as increasing paid sick leave to

6 days per year

Existing law raises the statewide minimum wage to

$10 per hour on Jan 1 2016 The cities of Los Angeles

Oakland and Berkeley have approved increases to $15

per hour (currently there are 14 local jurisdictions with a

higher minimum wage than $9)

Senate Bill 3 (Leno) would raise the statewide minimum

wage to $13 per hour by 2018 that measure was held

on the Assembly Appropriations Committeersquos Suspense

File Based on household surveys the Legislative

Analystrsquos Office estimates that roughly one-quarter of

California workers ndash currently estimated at 4 million

people ndash make less than $13 per hour Occupations

with large numbers of low-wage workers include food

preparation and service building and grounds cleaning

and maintenance and retail sales

According to the LAO workers in inland California

generally receive lower wages than workers in the

statersquos coastal areas (eg median wages in San

Francisco and San Jose are more than 50 percent higher

than median wages in Fresno and Bakersfield

In May 2015 Californiarsquos statewide unemployment rate

was close to 6 percent but a few coastal counties had

unemployment rates below 4 percent In contrast a

dozen counties ndash all in the inland part of the state ndash had

unemployment rates above 9 percent

The two initiatives include

Service Employees International Union State Council

(the statersquos largest union)

n Raises the minimum wage to $15 an hour by 2020

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

P E R S P E C T I V E

Continued from p 23

Continued on p 26

|

CA

LIF

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24

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

TO

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

GR

OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

GR

OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

OR

NIA

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OC

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 26: California Grocer Issue 2, 2016

P E R S P E C T I V E

n Requires at least six paid sick days a year

This initiative will have $20-30 million in campaign

funding from the State Council

SEIU United Healthcare Workers West

n Raises the minimum wage to $15 an hour by 2021

($11 on 1117 $12 on 1118 $13 on 1119 $14 on

1120 and $15 on 1121)

n Thereafter the amount is adjusted annually based

on the rate of inflation of the prior year by using the

California CPI

This initiative has been endorsed by California Lt Gov

Gavin Newsom In addition it has already collected the

366000 signatures needed to qualify

Californiarsquos November statewide ballot could have as

many as two dozen measures What impact that will

have on the electorate remains to be seen Among

those that have already qualified for the November 8

ballot include

n Referendum to overturn Californiarsquos law banning

single-use plastic bags in grocery stores

n Initiative measure targeting hospital fees and

Medi-Cal matching funds from federal government

by requiring 23 vote of the Legislature to amend

hospital quality assurance fees

n Initiative measure on school bonds funding for

K-12 school and community college facilities in the

amount of $9 billion would divide the money as

follows $3 billion for new K-12 school construction

$3 billion for K-12 school modernization $1 billion

for charter schools and vocational education centers

and $2 billion for community colleges

n Initiative measure to require statewide voter approval

before any revenue bones can be issued or sold by

the state for projects exceeding $2 billion

n Initiative measure to require performers in adult films

to use condoms during filming n

Continued from p 24

We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into

CGA Educational Foundation Hall of Achievement

Happiness lies in the joy of achievement

and the thrill of creative effort

Franklin D Roosevelt

|

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26

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

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WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 27: California Grocer Issue 2, 2016

CA

LIF

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27

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

Se

lec

t th

e B

est

reg

Contact us today to learn how we can help make this your best year ever

SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also

caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business

Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom

The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

LIF

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

CA

LIF

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

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LIF

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

LIF

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

OR

NIA

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

OR

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

OR

NIA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 28: California Grocer Issue 2, 2016

Jennifer Hatcher Senior Vice President

Government and Public Affairs Food Marketing Institute

INS

IDE

TH

E B

ELT

WA

Y

POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS

COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING

PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT

OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED

We reached out to law enforcement reached out

to congressional committees reached out to the

card associations and reached out to asset

protection experts

We put the best ideas of the group together and

offered the following advice and a webpage where

we can add additional ideas suggestions tips and

encouragement to get this problem under control

The first step is understanding the scope of problems

you are experiencing as there seem to be a couple

of different problems Some of our folks are seeing

what we are calling ldquoorganized crimerdquo

When a card is used 100 times in your store(s) in a

couple of days that is organized crime and clearly

there are multiple people involved in this fraud

On the other hand when one individual uses a card

in your store and then tells their credit card company

that they were not in the store and did not buy the

products that is still a crime you are still out the

money but at least for now it seems to be the work

of one person attempting to take advantage of a bad

system or bad issuers happy to charge back and ask

questions later because of their ldquozero liabilityrdquo

This term ldquoorganized crimerdquo ndash is clearly not based

on a legal definition just a recognition that there

is clearly more than one type of problem we are

seeing simultaneously

Getting a handle on the problem

n Track your chargeback rates and work to identify

where your greatest vulnerabilities are in the store

n Coordinate with local law enforcement and ask

for any trends they may see that could be the work

of an organized criminal element Share your

experience with them

n Fraudulent transactions are a crime so ask law

enforcement how and when they may suggest you

file a police report for chargebacks resulting from

fraudulent transactions and any terminology you

should use if you believe a particular chargeback

may be linked to others

Putting in-store controls in place

Gift cards are a prime target for criminals for

a number of reasons A person can buy a high

denomination gift card they are lightweight and easy

to transport and they are easily sold on the Internet

Several FMI members have taken steps to mitigate

this risk using one or more of these approaches

n Moving the card-branded gift cards that can be

used in any store behind customer service

n Restricting selling high value gift cards to certain

hours of the day (example 6amndash10pm)

n Only allowing cash or PIN-enabled debit cards for

the purchase of gift cards

n Requiring a photo ID for gift card transactions

n Removing gift cards from self-checkout lanes

n Setting up a point of sale system prompt for

managersrsquo approval for gift card transactions above

a certain dollar amount

n Not allowing purchase of gift cards with a prepaid

or reloadable Visa American Express MasterCard

or Discover card

n Limiting the value andor the number of gift cards

that can be purchased in a single transaction or on

a single card in a certain period of time

|

CA

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28

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

LUM

INA

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 29: California Grocer Issue 2, 2016

I N S I D E T H E B E LT WAY

Looking Beyond Gift Card Fraud to All Credit Transactions

We are seeing fraud now well beyond gift card fraud

You may want to put additional precautions in place

for any credit card transaction

n If you are testing EMV in-store and have a register

running EMV direct all gift card high value

or questionable transactions through that lane

This could significantly lower your chargeback

exposure

n Require a 100 ID check on all credit card

transactions or ID over a certain dollar value or

ID on any customer not using a loyalty card If

you can say that you check ID 100 of the time or

can link a transaction that was charged back by a

customer who presented a loyalty card or is shown

via camera to be in the store purchasing products

at the time of the transaction your ability to fight a

chargeback is greatly enhanced

n Post signage at the POS explaining this fraud and

your response to combatting fraud and protecting

your customers and your intent to involve law

enforcement The sign alone may be enough to

move the criminal to another location Plus it cuts

down on time your cashier has to explain why they

are asked for ID and the customer in front of them

using a PIN debit card was not asked for ID

n Some companies have added address verification

system (AVS) to their credit card processing As

frequently seen at gas pumps it prompts the

customer to enter their 5-digit zip code at the point

of sale If they get a mismatch they have trained

all cashiers to ask for ID

n Prohibit manual entry if the magnetic stripe does

not work or send that transaction to a customer

service desk for more scrutiny

n Implement CVV verification on manually entered

credit transactions or all credit transactions

n A managerrsquos override on any large order (over

$1000) An order at a grocery store for more than

$1000 (unless you know the customer and the

reason for the transaction ndash hosting a large party

catererrestaurant owner) should cause immediate

concernscrutiny

n ID check and transaction amount limits per

customer and per day to help mitigate risk

Members are reporting cards that have been used

more than 100 times in stores in 2 days You

need to have a mechanism in

place to make sure this type

of ldquoorganized crimerdquo does not

happen to you

Remain vigilant against any kind of suspicious activity such as

n Guestcustomer attempting

multiple credit cards with

declines

n Guest has a stack of credit cards

visible and outside of wallet

n Pay close attention to cards

issued by international banks in

Asia and the Middle East etc

n Buying large quantities of open

value gift cards

n Buying large quantities of beer

or wine

n When asking for ID the customer becomes

agitated nervous or in a hurry

In response to our requests both Visa and

MasterCard have offered more specific information

available on our web page

FMI EMV Chargeback Page

httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance

Bottom line you are certainly not the only

supermarket being defrauded but be aware be

vigilant be prepared and share what you learn

In considering any actions you need to consult

your contracts and the operating rules of the card

associations n

We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction

Why am I asked for ID on credit transactions

The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur

CA

LIF

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29

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

CA

LIF

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

E IL

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

OR

NIA

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

OR

NIA

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

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WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

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CE

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 30: California Grocer Issue 2, 2016

WA

SH

ING

TO

N R

EP

OR

T

Peter J LarkinPresident and CEO National Grocers

Association

Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA

KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND

CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US

MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION

Not a day goes by that I donrsquot hear from NGA

members who are beyond frustrated with the slow

pace of EMV implementation

To be clear the vast majority

of NGArsquos members ndash from

single-store operators to

regional chains ndash invested

tens of thousands of dollars

in new hardware and

software well before the

October 1 shift only to be

left waiting on a massive

backlog in the certification

process which is controlled

by the card networks

As an example NGA has one retail member who

installed EMV capable hardware in its 70-plus stores

well over a year before the October 1 deadline and

yet continue to wait on certifications so it can begin

accepting EMV cards Meanwhile these retailers are

being hit with thousands of dollars in chargebacks

from the banks and card networks simply because

they are not ldquoEMV compliantrdquo

We understand that the certification process which

is mandated by the card networks has experienced a

number of delays that range from the card networksrsquo

late delivery of technical code to other complications

slowing the certification process

None of these delays are the fault of merchants yet

itrsquos the merchant who is facing an onslaught in new

chargebacks as well as confusion among consumers

who donrsquot understand why they canrsquot use their chip

cards at their local supermarket

While some people may feel that EMV technology

is more secure for consumers the reality is the chip

has one main purpose and that is to validate the

authenticity of the card at the point of purchase

making it more difficult to counterfeit the card

Unfortunately the vast majority of EMV credit cards

being issued by banks in the United States are being

issued without PINs which raises the question why

go to all the expense to

issue EMV cards without

adding a simple PIN

authentication as well

Many independent

supermarkets are

investing in advanced

technology such as

tokenization and end

to end encryption to

further protect the

consumerrsquos data from

the swipe on through the transaction processing

Some are even making further investments to protect

consumer data with products such as First Datarsquos

TransArmorreg Solution ndash the same technology that

secures Apple Pay ndash to offer an added layer of security

Merchants who have made the investment to

comply with the October 1 deadline should be given

a ldquosafe harborrdquo and shielded from EMV specific

chargebacks NGA has reached out to Visa and

MasterCard leadership to open a dialogue in regard

to the significant backlog in the EMV certification

process and the increased number of chargebacks

to merchants

NGA is also working to educate federal policymakers

on the challenges merchants have faced during this

transition period

Itrsquos time for the card networks and banks to stop

passing the buck onto the backs of merchants but

rather they should work together with merchants to

further eliminate fraud by issuing credit cards with

PINs work to speed up the EMV certification process

and put a hold on chargebacks n

iStock

|

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30

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

TH

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

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NIA

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OC

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

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Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 31: California Grocer Issue 2, 2016

copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company

Untitled-1 1 33016 1003 AM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

ER |

51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

GR

OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

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Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 32: California Grocer Issue 2, 2016

Untitled-1 1 33016 1003 AM

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

ER |

51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

GR

OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 33: California Grocer Issue 2, 2016

TH

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33

Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE

CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS

TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE

Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins

When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way

to make an honest living and take care of his future family

He took that advice to heart and started knocking on doors

ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way

through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo

It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids

ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says

Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California

The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since

As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important

ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo

An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships

ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo

The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers

Dave gives it his all during The Illuminators Special Event

Dave with his wife Andrea

Untitled-1 1 33016 1003 AM

Continued on p 34

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 34: California Grocer Issue 2, 2016

Continued from p 33

|

CA

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34

Part of that is getting to see the organization as fun and not just hard work

ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo

Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry

ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo

That said Dimond believes younger people have a lot to contribute to the organization

ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes

Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill

ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo

The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo

This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo

The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC

ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo

Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year

ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo

At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co

ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies

On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years

Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice

ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n

T H E I L L U M I N AT O R S

Dave with teammate Kevin Konkel Raleyrsquos

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

OR

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

OR

NIA

GR

OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

OR

NIA

GR

OC

ER |

51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

OR

NIA

GR

OC

ER

52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 35: California Grocer Issue 2, 2016

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CA

LIF

OR

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

OR

NIA

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

GR

OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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OC

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

NIA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 36: California Grocer Issue 2, 2016

CA

LIF

OR

NIA

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OC

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37

copy2014 Bimbo Bakeries USA Inc All rights reserved

BIMBO BAKERIES USA

THANKS JIM FRENCH FOR HIS DEDICATION IN 2015

AS OUR ILLUMINATOR HEADLITE

ampWELCOMES DAVE DIMOND

OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo

IN 2016

BimboBakeriesUSAcom

bb2016_r6indd 1 33016 1131 AM

CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite

THIS ADVERTISEMENT

PREPARED BY

enCore Marketing LLC

Client Domino Foods Job DM2016-2413 Ad 2494

Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

CA

LIF

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

GR

OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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NIA

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OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 37: California Grocer Issue 2, 2016

Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

LIF

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NIA

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OC

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

LIF

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

CA

LIF

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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NIA

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OC

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 38: California Grocer Issue 2, 2016

M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS

T

simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed

ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash

ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo

Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo

His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year

The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA

activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents

While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook

About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year

The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt

ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo

Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base

ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo

No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo

However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry

ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on

2015 was a record

year for all merger

and acquisition

activity and 2016

might hit the same

heady heights

he reasons are

BY LEN LEWIS

CA

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39Continued on p 40

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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NIA

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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ER

48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

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ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 39: California Grocer Issue 2, 2016

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 39

|

CA

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40

operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo

Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents

These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others

ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo

Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides

ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo

This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd

ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo

Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on

consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies

ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says

ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo

But scrutiny by lenders could be eclipsed by that of government agencies

ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong

Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago

ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo

Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers

ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo

So you want to sell the business or maybe buy another one but canrsquot find the right partners

A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries

Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets

The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million

The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company

ldquoThere are plenty of examples of successful retailers being owned by

non-merchantsrdquo he says ldquoIn many cases they try to free the business

by shifting investment and assets from things that donrsquot do anything

to things that do and improve the customer propositionrdquo

Continued on p 42

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

OR

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 40: California Grocer Issue 2, 2016

The ONLY Federal Credit Union in the United States chartered to serve

grocery industry employees and their familieswwwtrugrocercom

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

CA

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

CA

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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NIA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 41: California Grocer Issue 2, 2016

M E R G E R S A N D A C Q U I S I T I O N SCONTINUED

Continued from p 40

|

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42

Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt

ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo

However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible

ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility

When considering acquisitions a strong cultural fit continues to be essential

ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says

ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo

Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo

But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have

ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo

Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo

This is especially true for private equity firms who are likely to continue acquiring retail operations

ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo

But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms

ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n

37Entry into new businesses

37Expand customer base

36Expand geographic reach

34Enhance Intellectual

Properties or acquire new

technologies

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

25Opportunistic-target

becomes available

16Acquiring additional

supply chain elements

WHATrsquoS DRIVING ACQUISITIONS IN 2016

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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NIA

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OC

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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OC

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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NIA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 42: California Grocer Issue 2, 2016

CA

LIF

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43

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 43: California Grocer Issue 2, 2016

It wasnrsquot so long ago that sustainability for a grocer

meant breaking down cardboard for scrap collectors

and giving the local Boy Scout troop a spot near the

store entrance to collect bottles and cans Locating

a market for recycled wood and metal was almost

considered progressive

Today sustainability has become an essential

part of every business across the nation

California consumers lead the nation in the

demand for preservation of our planet and its

resources sustainability is no longer an option

itrsquos an expectation for customers And where our

customers go as they say we follow

Take Kroger for example In the middle of their

49-acre campus in Compton Calif sits the first-

in-the-state anaerobic digester Billions of bugs

cleaning up the environment under the Ralphs and

Food4Less banner

ldquoOur perishable food program donated $4 million

of food to our community partners last yearrdquo states

Kendra Doyel Vice President of Public Relations and

Government Affairs for RalphsFood4Less ldquoFood

which canrsquot be sold or donated is run through our

anaerobic digester which converts food to fuel This

fuel powers about 20 percent of our home offices

our warehouse the creamery and the transportation

center ndash all located at our Compton facilityrdquo

ldquoThe digester has reduced diesel truck trips by

5000000 miles each year ndash miles we used to drive to

take food to our composting center It also cleans up

about 29000 gallons of wastewater every day from

our creameryrdquo

By Cassandra Pye

For years now therersquos been a quiet movement under way on the part of the food industry to save the planet

These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable

iStock

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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LIF

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

LIF

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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NIA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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NIA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 44: California Grocer Issue 2, 2016

S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE

Wastewater from the creamery is mixed in with food

waste ndash including packaging ndash creating a ldquomilkshakerdquo

which is heated and fed to the bugs Upwards of 150

tons of food waste is processed each day The result

the equivalent of power for 8000 homes annually is

produced to support the facility

And clean water ndash a byproduct of the process ndash is

reused Doyel says the company is now looking at

ways to eventually use particulate matter as compost

The processor sits in a compact space and according

to Doyel is both odorless and emits very little noise

ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere

are anaerobic digesters all over the world but this one

sits in the middle of an urban area surrounded by

businesses homes and people Wersquove been operating

the project successfully for three yearsrdquo

RalphsFood4Less also engages in traditional

sustainable practices recycling about 7 million

pounds of cardboard plastic and metal annually

ldquoAnd wersquore also helping our customers live a more

green lifestyle by offering recycling inside our

stores offering green products ndash like light bulbs for

example ndash which help them to save energyrdquo she says

For Ralphs she adds sustainability means striving

to reduce the companyrsquos impact on the environment

by using natural resources responsibly while

minimizing waste in their operations

Brian Dowling Vice President for Public Affairs for

Albertsons-Safeway says the term sustainability over

the last decade has evolved

ldquoI would say sustainability wasnrsquot a term that was

tossed around too muchrdquo Dowling said ldquoBut if I look

at what companies did 10 years back it was about the

environmental footprint ndash so recycling collecting

cans cardboard etc

ldquoIf you look at where it is today itrsquos an opportunity

for companies to create value for their organization

and do good for the broader community at the

same timerdquo

Albertsons-Safeway whose 14 operating divisions

include Acme Shawrsquos and Jewel in the east and

midwest and Vons on the west coast has taken

environmental stewardship to a whole new level

ldquoSustainability has been at the root of what we do ndash

for a long timerdquo says Dowling ldquoRecycling cardboard

and plastic didnrsquot get headlines but our efforts in

recent years ndash on the seafood side and more recently

on the human trafficking side of the business ndash are

taking things to a whole different levelrdquo

Whole different level indeed The nationrsquos second-

largest grocery chain is close to hitting

an unprecedented target for seafood

ldquoIn the seafood space our goal was to

have all of our fresh and frozen label

sustainably-sourced by end of 2015rdquo

states Dowling ldquoAlthough we did not hit

our target for fresh we were pretty darn

close with our frozen ndash at 99 percentrdquo

Dowling says that in fresh [seafood] the

challenge is there arenrsquot good alternatives

available yet

ldquoSo wersquore really working hard with that

industry and that objective continues

ndash especially now that wersquore a larger

companyrdquo he says ldquoWe donrsquot have a goal

yet but wersquore working with FishWise and

expect to wrap up by Junerdquo

FishWise is a sustainable seafood

consultancy that promotes the health and

recovery of ocean ecosystems through

environmentally responsible practices

Dowling says Albertsons-Safeway will

establish a goal for all of its banners

Sustainability efforts are in play on land

as well as sea

ldquoLegacy Safeway stores did recycling

starting in the 1960srdquo recalls Dowling

ldquoIn California we have the opportunity

to also backhaul and aggregate materials like

cardboard soft and hard plastic metal wood But

wersquore also focusing more on food wasterdquo

Dowling says Albertsons is taking a tiered approach ndash

expanding its partnerships with food banks to be able

to get food thatrsquos at the point where it canrsquot sell it but

can get it to food pantries by sell-by dates

ldquoWersquore always looking for new alternatives if we canrsquot

send product to a food bank but donrsquot want to send to

a landfill then we can compost it or send to farmers

for animal feedrdquo he says ldquoOur objective is to move

towards zero-wasterdquo

JUST THE NUMBERS ALBERTSONS -SAFEWAY

n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled

n Well over 104000 tons sent to compost or animal feed

n 29 million pounds of seafood transferred to responsible sources since 2009

n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna

n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items

n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply

CA

LIF

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45Continued on p 46

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

CA

LIF

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NIA

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OC

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

LIF

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 45: California Grocer Issue 2, 2016

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

The Albertsons-Safeway distribution facility in Tracy

Calif is one of several which has achieved zero-waste

status

Dowling says his company is now constantly

examining every part of their organization ndash

products community employees ndash against what

can be done for the planet

ldquoTherersquos also been a shift in consumer attitudes and

what they expect companies to do in this areardquo he

asserts ldquoThere are real issues in seafood supply so we

want to provide product for our customers but do so

in a responsible wayrdquo

The Albertsons-Safeway partnership with FishWise

was established in 2009 and the organization

Dowling states continues to counsel and advise

the company on seafood issues He adds that the

organization is showing retailers ways to continue to

sell a lot of product

but do so in

a responsible

way ndash for many

years to come

ldquoWersquore a penny-

on-the-sale

businessrdquo says

Dowling ldquoThat

makes us look

carefully at

opportunities to

save on water

energy shipping

costs All these

efforts make

good sense for the business therersquos a duality which

drives what we dordquo

For Richard Draeger Chief Operating Officer

Draegerrsquos Market San Mateo Calif sustainability is

a collection of practices

ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he

suggests ldquoIt includes energy-efficiency initiatives

recycling programs ndash including containers but

also hazardous waste It has a lot to do with energy

renewables that you employ as part of your overall

energy consumption

ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor

and labor-related costs itrsquos the next highest line item

for our company Wersquore trying to mitigate costrdquo

And he says his company is looking at everything

because as a small company ldquowersquore looking at decent

paybacks ndash often five years for many of these itemsrdquo

he states

ldquoWersquove got R-30 [insulation] on our rooftops and

R-19 on our wallsrdquo Draeger says ldquoWersquore looking at

photovoltaic energy production for our facilities and

at the moment we are looking at ldquoBloom Boxesrdquo ndash

cogeneration of energy derived from natural gas ndash for

our operationrdquo

Draeger says LED lighting ndash lighting in general for

that matter ndash is incredibly important to lower costs

and sustainability

ldquoWersquove changed lighting literally throughout our

storesrdquo he says ldquoThere will not be a traditional light

anywhere For our Los Altos store (where theyrsquore

rebuilding the store from the ground up adding

25 percent more square footage) wersquore going to

include photovoltaic energy production wersquore also

considering Bloom Boxes and anything else thatrsquos

sustainablerdquo

Including food

ldquoThe food we select for sale is sustainablerdquo says

Draeger ldquoThe more we accept from local vendors

ndash especially produce thatrsquos considered much more

sustainable as those from distance sources ndash the

better Wersquore also using better refrigeration gases

so much has changed ndash including those more

dangerous gases from years agordquo

What do Draegerrsquosrsquo customers think

ldquoConsumer response is always positiverdquo Draeger

insists ldquoThey like to see that you employ sustainable

practices For example wersquove just started on closing

our open merchandised refrigerated fixtures

with doors ndash really nice glass doors on all of our

refrigeration fixtures ndash thatrsquos sustainablerdquo

Draeger also thinks that when a customer looks at

sustainability theyrsquore really looking at the types of

foods a retailer is presenting to them in the produce

department ndash buying locally and folks who are within

Continued from p 45

Ralphs Grocery Companyrsquos anaerobic digester

|

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46

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

LIF

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 46: California Grocer Issue 2, 2016

S AV I N G T H E P L A N E T hellip Q U I E T LY

60-100 miles of your store He says consumers notice

that and theyrsquore willing to pay for it

ldquoWe donrsquot waste a whole lot of food either to be

honest with yourdquo says Draeger ldquoMost of it is

backhauled We get rid of a lot of organic waste that

way Not all communities wersquore in provide backhaul

to the farms Itrsquos expensive to do that for a small

retailer But if yoursquove got a community providing the

service itrsquos more cost effective to do it that wayrdquo

Draegers recycles materials often

ldquoThose things arenrsquot even on the radarrdquo says Draeger

ldquoTheyrsquore happening on the natural and have been for

a long timerdquo

The updated Los Altos store will have more natural

lights by way of skylights and windows And there

will be charging stations for electric vehicles (EVs)

ldquoAgain these communities are maturing and these

technologies are now available ndash so we provide the

support services to our customersrdquo

Draeger also poses a challenge to the industry

ldquoThe better we become at messaging [about] what it is

that we do the greater customer appreciation would

berdquo he insists ldquoThatrsquos the trick You do these things

as a business and donrsquot necessarily tout what you do

Itrsquos important to do thatrdquo

Draeger says they tell their customers about his

companyrsquos reusable bag program and some of the

energy efficiency programs they carry out with

the support of Pacific Gas and Electric Company ndash

including electronic control monitors and variable

speed compression motors all aimed at lowering

energy usage ndash but they can always tell customers

more of that story

Albertsonsrsquo Brian Dowling also sees a future where

retailers begin to collaborate more on these efforts

ldquoEarly onrdquo he says ldquothe work we did made us

independent of other retailers Itrsquos not going to

happen that way anymore

Continued on p 48

CA

LIF

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47

An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom

Good for grocers Good for the environment

To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

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WIT

Hhellip

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 47: California Grocer Issue 2, 2016

S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED

ldquoThe supply chain is where there is greater

opportunity now for companies and others to have

an impactrdquo says Dowling ldquoWe were looking at our

own four walls and spent the last few years reducing

our footprint through our own initiatives Now wersquore

looking at the supply web ndash that complex mix of all

involved ndash and deciding where opportunities for

sustainable efforts existrdquo

Human trafficking in the seafood supply chain for

example is complex and difficult to monitor says

Dowling Specifically where itrsquos happening and to

whom

ldquoThatrsquos where the opportunity exists nowrdquo he says

ldquoTherersquos so much more collaboration possible that

includes the industry governments NGOs and

others We need everyone at the table to discuss these

issues because they are larger than our companiesrdquo

Doyel Dowling and Draeger mimicked each otherrsquos

remarks on the question of why sustainability

Doyel ldquoThese efforts are in line with our core values

for our customer and our communityrdquo

Dowling ldquoThey are good for the planet and good for

our business toordquo

Draeger ldquoWersquore doing good and doing good for the

businessrdquo

In all cases customers win n

Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA

The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used

Continued from p 47

|

CA

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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209

Rob McDougallGelsonrsquos Markets

Donna TyndallGelsonrsquos Markets

Bruce Wyatt Flowers Baking Co

Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co

Tyson Foodscongratulates

on their inductions into the CGA Educational Foundation Hall of Achievement

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 48: California Grocer Issue 2, 2016

Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink

Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines

880 Auto Wrapper

wwwmtcomretail-backroomLearn more

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

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CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 49: California Grocer Issue 2, 2016

ldquoThe Food Futures Lab is one of our longest

running programsrdquo said Rebecca Chesney

research manager for the Lab who also oversees

the grouprsquos 10-year forecast program

ldquoWe look at cities food water issues and every

year we take a different anglerdquo she said ldquoThis

year one of our goals is to focus on kids and how

these digital natives will impact the business

model we use and how to communicate with

themrdquo

Other studies have also led IFTF into areas that

might be closer to impacting todayrsquos food retailers

when it comes to consumers and employees

ldquoOur workable futures initiative is looking at the

lsquogigrsquo or on-demand economy and how itrsquos going to

affect things like health insurance and social safety

netsrdquo Chesney said

ldquoBasically the work landscape is changing and

more people are becoming freelancers and moving

away from the traditional jobs and locations

A lot of people are trying to figure out what benefit

structure theyrsquoll need in the future and how to do

things differentlyrdquo

The goal according to Chesney is to get people to

think beyond next week or the next quarter when

shaping their (business) strategies

Furthermore the loss of traditional benefits or

reduction of the traditional 9ndash5 workday will start

to impact what people eat at lunch how they

socialize and redefine work and school days

ldquoFor examplerdquo she said ldquoUber drivers might

make most of their money at night In this kind of

fragmented workplace we have to look at the types

of foods they need where theyrsquore eating them and

what theyrsquore shopping forrdquo

That means mapping food experiences ndash not only

eating food but also packaging branding accessing

food ndash the entire food experience

The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo

Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come

CA

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51Continued on p 52

By Len Lewis

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

|

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 50: California Grocer Issue 2, 2016

Continued from p 51

E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED

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CA

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52

ldquoAnd access to food impacts where we get our foodrdquo

she added ldquoRetailers need to think about that todayldquo

The Institute is not only tracking the further

fragmentation of retail but the next iteration of

retailing which is likely to be a mixture of on-demand

and fully-automated food delivery the latter of which

could be about 10 years away according to Chesney

As an example she cited Amazonrsquos Subscribe and

Save program which offers consumers up to 15

percent savings on recurring delivery of everyday

items like toilet paper paper towels flour and

baby wipes

On another level Amazon Dash is partnering with

companies like Britta to develop a filter that can track

how much water a consumer is filtering using the

companyrsquos system

ldquoItrsquos tied to your Amazon account and knows how

much water yoursquore using when you will need filters

and automatically orders them for yourdquo she said

ldquoItrsquos a different type of online retail that changes

the extent to which consumers are involved in

shopping decisionsrdquo

Cheney said ittrsquos a new purchasing pathway thatrsquos not

been fully researched and brings up the question of

how much consumers will care about brands in the

future and whether they will simply tell Amazon to

send them the cheapest item in any given category

However customer involvement could increase in a

different way

Consider a San Francisco-based company called

Betabrand a clothing designer with a platform

similar to Kickstarter

ldquoYou post an idea of what you would like then

other people can build on it with their ideas to help

designers refine the itemrdquo Chesney noted ldquoOnce an

item gets enough votes it moves to a crowdfunding

stage for prototype designsrdquo

If it reaches a certain threshold and the company

can guarantee a minimum market Cheseny says

Betabrand will manufacture the item and apply the

amount you donated towards the purchase of the

finished item

ldquoThis way the company can reduce space inventory

costs and risk Itrsquos almost the opposite of automated

retail yet another online environment to watchrdquo she

said noting that many people are already funding

food products on Kickstarter

ldquoEven if people are not purchasing they are involved

in a communityrdquo Chesney said ldquoWe call it engaged

shopping They are not just consumers they are

actually participating in the development of a

product Betabrands is a signal of the future We look

for those signals and thatrsquos how we do our forecastsrdquo

People want to be able to access whatever kind of food

they want at any given time This isnrsquot just a 24-hour

grocery store The idea of convenience has changed

and retailers need to rethink what it really means

Another field of study for the Institute is automation

and automated shopping via ldquoBody Area Networksrdquo

as Chesney called it

ldquoThink about whatrsquos becoming networked and all the

different technologies that are connectedrdquo she said

ldquoToday itrsquos a smartphone or Fitbit But people are

working on clothing with sensors to detect hydration

levels when yoursquore working out There are skin or

injectable sensors that could track biometrics and

detect illnesses All these technologies on or in our

bodies will be connected to the other technology

around usrdquo

Chesney said people are focused on understanding

e-commerce and online retailing but ldquothe thing to

understand now is what information is being tracked

about health and nutrition from the different fitness

apps that are on the smartphone The question is how

retailers can be involved with thatrdquo

All of these things add up to the next step in data

analytics

ldquoIt will be much more nuanced and will offer views

into preferences and tastes for different types of

consumersrdquo she said n

Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

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California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

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Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 51: California Grocer Issue 2, 2016

MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA

CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA

EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT

This yearrsquos inductees included Rob McDougall

President amp CEO and Donna Tyndall Senior Vice

President of Operations Gelsonrsquos Markets and

Bruce Wyatt Vice President of Sales Flowers

Foods Bakeries Group

The Hall of Achievement was created in 1992

to recognize those individuals that have made

significant contributions not only to the grocery

industry but the communities they serve

The three inductees brought the total number of

Hall of Achievement recipients to 45 and was the

second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods

F O U N D A T I O N D I N N E R C E L E B R A T E S

I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S

|

CA

LIF

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54

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

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55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

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56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

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60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

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65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

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IFO

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 52: California Grocer Issue 2, 2016

recognized for their dedication to Californiarsquos grocery

industry In 2007 Gelsonrsquos executives Bernie Briskin

Bill Roulette Allan Scharn and Bob Stiles were

inducted into the Hall of Achievement

ldquoRob Donna and Bruce are true icons of our

industryrdquo said CGAEF President Ron Fong ldquoEach

inductee has a tremendous story to tell Each has

traveled different paths to reach this point in their

distinguished careers They are all deserving of this

prestigious awardrdquo

F O U N D AT I O N H O N O R S

CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program

ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong

Continued on p56

Abby Gillmore CGAEF Scholarship Recipient

BRUCE WYATT Vice President Sales

Flowers Baking Company

Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia

Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company

That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry

Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation

Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C

AL

IFO

RN

IA G

RO

CE

R |

55

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

OR

NIA

GR

OC

ER

56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

OR

NIA

GR

OC

ER |

59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

GR

OC

ER

60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

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64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

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66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

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68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 53: California Grocer Issue 2, 2016

Led by event chairs Hee-Sook Nelson Gelsonrsquos

Markets and Jerry Whitmore retired Nestle DSD

the event raised more than $500000 ndash funds that

support the Foundationrsquos college scholarship and

tuition reimbursement programs

ldquoThe Foundation is extremely grateful to the many

companies and individuals that have donated to this

very worthy causerdquo Fong said ldquoThe funds raised

from this event will help support the Foundationrsquos

many worthwhile industry programsrdquo

The annual gala event included a live auction and

Fund-A-Need program that raised nearly $100000

ldquoThe generous support of the industry was

overwhelmingrdquo said Foundation Executive Director

Shiloh London ldquoThe grocery industry has a genuine

passion for helping others and that was certainly

demonstrated at the dinnerrdquo

In addition to the Hall of Achievement award Fong

presented each inductee with a special Legislative

Proclamation from their local elected legislator that

commended them on their achievement

In presenting the proclamations Fong praised all

three recipients for their commitment and dedication

to the industry Following his remarks brief

videos highlighting each inducteersquos personal and

professional accomplishments were aired

In what has become a tradition at the dinner a

Foundation college scholarship recipient shared with

attendees how receiving financial assistance played a

major role in their educational plans

This year Abigail Gillmore whose father is a senior

category manager at Gelsonrsquos Markets shared

insights into how her Foundation scholarships have

helped her realize her dream of becoming a teacher

Gillmore a junior at California Lutheran University

originally planned to major in psychology but

ldquodiscovered that my familyrsquos passion for teaching

had rubbed off on me I knew the best way for me to

help people was to change my major to educational

studies and become a teacher like my granddadrdquo

Continued from p 55

F O U N D AT I O N H O N O R SCONTINUED

|

CA

LIF

OR

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GR

OC

ER

56

Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers

Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos

HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co

This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher

Continued on p59

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

OR

NIA

GR

OC

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59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

GR

OC

ER

60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 54: California Grocer Issue 2, 2016

youThankfor your fresh ideas

and commitment to education

from your friends at

Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

OR

NIA

GR

OC

ER |

59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

GR

OC

ER

60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 55: California Grocer Issue 2, 2016

DONNA TYNDALL Senior Vice President of Store Operations

Gelsonrsquos Markets

Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations

After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004

Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon

Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ

Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul

Turcotte CGAEF Trustee Pepsi Beverages Company

She has been awarded Foundation scholarships

the past three years and now her younger sister is

also a scholarship recipient

ldquoNone of this would have been possible without

the Educational Foundationrsquos supportrdquo she said

In addition to the Hall of Achievement Award

presentation retiring CGAEF Board of Trustee

George Frahm Stater Bros Markets was

recognized for his more than 10 years of service

to the Foundation

ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said

Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker

F O U N D AT I O N H O N O R S

Continued from p 56

Continued on p60

CA

LIF

OR

NIA

GR

OC

ER |

59

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

GR

OC

ER

60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 56: California Grocer Issue 2, 2016

ROB MCDOUGALL President amp CEO

Gelsonrsquos Markets

Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service

A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots

Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections

Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association

Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family

ldquoFor over 10 years George was an integral part of

the Foundationrsquos Board of Trusteesrdquo said outgoing

CGAEF Chair Jim Van Gorkom NuCal Foods

ldquoGeorge brought a wealth of knowledge experience

innovative ideas and strategic thinking to the

Foundation and perhaps most valuable his tireless

efforts to increase the visibility and credibility of the

Foundation within the grocery industryrdquo

The Foundation was created under the direction

of the California Grocers Association Board of

Directors in 1992 Its mission is to provide financial

assistance to advance the educational goals of CGA

member company employees and their dependents

and offer educational programs to advance the

grocery industry n

Marco Robles Cardenas Markets and wife Rosa

Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods

F O U N D AT I O N H O N O R SCONTINUED

Continued from p 59

|

CA

LIF

OR

NIA

GR

OC

ER

60

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 57: California Grocer Issue 2, 2016

Wersquore making adierence

Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while

addressing hunger in America

Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in

bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)

How we do it

Diverted from landfill

31 tonsALUMINIUM

134494 tonsMISC RECYCLING

of waste kept out of landlls as of 2014 from Safeway stores alone

228540 tonsCARDBOARD

8198 tonsPLASTIC BAGS

84655 tonsCOMPOST

475491+ tons

19573 tonsANIMAL FEED

Reducing food waste is the right thing to do for our communities our customers

the environment and for California

Food donated

718 million lbsIN CALIFORNIA ALONE

SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016

SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 58: California Grocer Issue 2, 2016

15

MIN

UT

ES

WIT

Hhellip

|

CA

LIF

OR

NIA

GR

OC

ER

64

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 59: California Grocer Issue 2, 2016

California Grocer The industry seems to have a

love affair with anything tagged local What do

consumers really think

Kummer ldquoItrsquos more important than ever even

though consumers donrsquot really know what it

means Everyone has their own definition of how

many miles around the store or restaurant it should

come from Tut they like the idea of helping local

economies Itrsquos the main reason I care about itrdquo

Is there a mileage number

ldquoSome people say 40 miles some say 100 It depends

on where the settlements are around you Yoursquore

helping keep a place thatrsquos not very far from your

home thrivingrdquo

What about environmental issues

ldquoIrsquom not entirely convinced buying local is better for

the environment It can use more resources than

big farms that offer more economies of scale And

shipping in huge trucks consumes much less energy

per unit to get to a store or restaurantrdquo

The whole Chipotle Ecoli contamination has put

a spotlight on safety of local products

ldquoThatrsquos complicated Organic and local doesnrsquot mean

safer Unfortunately thatrsquos part of the lesson learned

from Chipotle It generally means itrsquos better for the

people who raise your food Thatrsquos what I think

consumers should be focused onrdquo

Is local overrated considering availability of fresh

products from around the world these days

ldquoUndefined but not overrated But I think that people

are asking how companies treat their employees

and put a premium on hiring people from the

community Thatrsquos what it means to me Itrsquos about

making sure people are able to live comfortably

in a community thatrsquos supported by community

services Itrsquos about farms small businesses or artisan

producers creating jobs locally rather than seeing

everything move to cities or big packing centersrdquo

I get the impression that lsquolocalrsquo has just become

a marketing and advertising buzzword

ldquoI think thatrsquos absolutely true People have to make

up their own minds by going to their stores and

asking questions Itrsquos up to consumers to enforce

the definitionrdquo

Are they asking questions

ldquoNo they just take their word for itrdquo

Whorsquos driving local food trends

ldquoI think itrsquos Millennials It starts with concerns about

their own health and that of their families Then itrsquos

about how much money theyrsquore spending on food

and then itrsquos about incorporating social idealsrdquo

Whatrsquos considered healthy food Will the

argument over GMOs continue

ldquoI think the GMO argument will go away regardless

of the demographic group Lower income people

are equally concerned with health and fresh

products They may not have access to it and lack

time to make it but they are aware and concernedrdquo

What do you see coming in new food trends

ldquoA lot of it was what I saw at the recent Fancy Food

Show ndash Paleo diets higher fat meats Therersquos much

less fear of fat today so people are returning to meat

1 5 M I N U T E S W I T H hellip

Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic

Boston magazine and the New Republic have become must-reads for foodies amateur and

professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and

how spoke with California Grocer about a few of his favorite issues

Corby Kummer

Continued on p 66

BY LEN LEWIS

CA

LIF

OR

NIA

GR

OC

ER |

65

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 60: California Grocer Issue 2, 2016

Continued from p 65

Gluten-free is still roaring along and I donrsquot see a

reduction But I saw organic leveling out and not as

much product with whole grains as two years agordquo

Natural and organic is price of entry in retailing

these days

Yes But organic what

As a food writer do you think consumers are

interested in getting back in the kitchen and

doing more prep

ldquoNo I donrsquot think they are Itrsquos just wishful thinking

on our part Itrsquos not that this generation doesnrsquot

want to return to home cooking therersquos just a

certain fear of it Therersquos always the excuse therersquos

no time and buzzwords like local are often proxies

or excuses for not making food for your familyrdquo

Anything retailers can do to get people back

in kitchen

ldquoI think there should be more chopped fresh

vegetables Also cooking classes at supermarkets

and community centers would help as well as

demos in stores if retailers are willing to make the

investment These ideas have been around a long

time Generally what gets people to cook again is

when they realize they can save money by doing it

themselvesrdquo

What do you think about home delivered

meal kits

ldquoI did a recent column on that in the New Republic I

asked why anyone would lsquopay a premium for a large

box filled with ice packs and little baggies and tiny

shampoo-sized bottles whose contents will produce

a few meals and a lot to recyclersquo Clearly they are

competing with supermarkets Irsquove tried a variety of

meals from four different companies and what they

had in common was a lot of packaging It has its

advantages but I wouldnrsquot buy another meal kitrdquo n

1 5 M I N U T E S W I T H hellip|

C

AL

IFO

RN

IA G

RO

CE

R

66

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 61: California Grocer Issue 2, 2016

Congratulations

2016 Hall of Achievement InducteesFrom your friends at

Celebrating 145 years of grocery SMARTS

copy Copyright 2016 Smart amp Final Stores Inc

BerryImpressive

ranchosanmiguelmarketscommyfood4lesscom

Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)

AD

VER

TISE

R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 62: California Grocer Issue 2, 2016

AD

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R IN

DEX

PAGE COMPANY PHONE FAX EMAIL WEBSITE

63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom

36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom

37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom

27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom

IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg

31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom

47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom

67Food 4 Less (Stockton) Rancho San Miguel Markets

209-957-4917 209-956-8550 wwwmyfood4lesscom

19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom

62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom

21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom

66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom

26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom

32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg

13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg

37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom

49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail

BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom

35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom

5 Moss Adams LLP916-503-8206 818-577-1845

stephenredmondmossadamscomjeffclairmossadamscom

wwwmossadamscom

22 Nestle Purina PetCare800-421-1721 x9 314-982-4876

314-982-2860 paulcookenestlepurinacom wwwpurinacom

53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom

5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom

25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom

57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom

7 Retail Marketing Services Inc800-252-4613 818-563-3031

818-563-3041 wwwcartretrievalnet

67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom

58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom

41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom

48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom

15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom

16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom

61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|

CA

LIF

OR

NIA

GR

OC

ER

68

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL

Page 63: California Grocer Issue 2, 2016

Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom

copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL