fd buyer april 2010

APRIL 2010BREAKFASTS PIZZA APPETIZERS DIPS & SPREADS

I N S I D E

www.fdbuyer.com

BOB ANDERSONCRITIQUES

AHOLD’S PLPAGE 26

JEROME SCHERER

& A VIRTUAL PANEL

DISCUSS THE STATE OF

LOGISTICSPAGE 48

HAMDI

ULUKAYA:FROM SHEPHERD

TO CHOBANI CEO

PAGE 58

BETTY BUYER

BATTLESSAMMY SELLER

PAGE 14

PETE PENGUIN

WITH IRI’SLATEST DATA

PAGE 18

W E H E L P Y O U R B U S I N E S S G R O W

MIXED REVIEWS FOR AHOLDPRESENTING: THE GOOD, THE BAD AND THE MERELY PUZZLING.

SOME SEE ‘AN ABSENCE OF NEGATIVES,’ BUT ALSO ‘AN ABSENCE OF POSITIVES.’ (OUCH!)

Betty BuyerBetty dukes it out with Sammy Seller over the meaning of the return of the SKU at Walmart.

Our pals at RetailWire discuss whether Girl Scouts should be stopped from, um, soliciting, outside the former Ukrop’s stores. (Oh, stop it!)

TABLE OF CONTENTS

Light At The End Of The Tunnel Top executives at leading warehousing/logistics companies see light at the end of the recessionary tunnel. Here’s how they believe the state of the industry has changed, permanently.

A Shepherd’s ReturnWould you believe that the guy who markets Chobani (which means ‘shepherd’) was a shepherd himself, as a boy in Turkey?

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16-20

MIXED REVIEWS FOR AHOLD

C A T E G O R Y S P O T L I G H T S

T H E D A T A B A N K

V E N D O R V I S I T

T H E F R O N T E N D

Breakfasts: Waffles Still Off, But…

Pizza: Plenty of Potential

Appetizers Up in Units

No Dip in Dips (Or Spreads!)

32

36

40

44

L O G I S T I C S

48

4

6

10

14

24

The good, the bad and the merely puzzling.

22C O V E R S T O R Y

3www.fdbuyer.comAPRIL 2010

THE DATABANKIRI data on the largest frozen and dairy sub-categories, and leading brands.

Out Warren’s WayKill the Nerds! Is there hope for those secondary brands after all?

What’s New

Got ‘Shopper-Centric?’At SymphonyIRI Group’s 2010 Summit, experts hold forth on engineering shopper relationships, innovations in analytics, and rewiring retail/marketing.

Warren Thayer, [email protected]

4 www.fdbuyer.com APRIL 2010

OUT WARREN’S WAY

MASTHEAD

Warren ThayerEditor, Managing [email protected] 603-252-0507

Paul ChapaSales Director, Managing [email protected] 913-481-5060

Joan WeinbergerAdvertising [email protected] 212-254-4627

Randy SzarzynskiArt [email protected]

Contributing Editors:Dan Alaimo, Kirsten Gehlbach, Len Lewis, April Miller, Dan Raftery, Morgan Little and Betty Buyer.

EDITORIAL ADVISORY BOARD

Dan Raftery, Raftery Resource Network

Todd Hale, The Nielsen Company

Bob Anderson, former vp of private label, Wal-Mart

Dr. Brian Harris, The Partnering Group

Phil Lempert, NBC Today Show

Nevin Montgomery, National Frozen & Refrigerated Foods Association

Thom Blischok, IRI Published by CT Media Partners,Postmaster: Send address changes to CT Media Partners, 272 Elm St., Norwich, VT 05055

KILL THE NERDS!Is there hope for those secondary brands after all?

Recently I had long chats with a couple frozen food buyers at major chains about how

brands are becoming commod-itized. No rocket science here — the recession has turned many branded manufacturers into cowards, afraid to innovate. More and more, from the shopper’s point of view, the only real differentiation between brands is “what’s on sale.” But cripes, if there were ever a time for innovation, it’s now. Private label already had a strong head of steam before the economy went to hell, and so did the move toward SKU rationalization. Both these factors can get brand-ed items delisted in a heartbeat. Brands know they need differentia-tion to stay viable, but they seem stuck in analysis paralysis. And the worst offenders seem to be the big-gest brands. No sooner had I hung up with my retailer pals than I read a mag-nificent piece online from Advertis-ing Age magazine. It’s titled “Our

Biggest Brands Can No Longer Be Managed by Nerds.” You really ought to read it it — just go to www.adage.com, and enter a few words of the title into their little search box. Do it now. I’ll wait… Wasn’t that terrific? My favorite line in the piece was “Fluency with buzz words and expertise with spreadsheets do not guarantee brand-marketing competence.” A close second: “If Edison had done market research, he would have invented bigger candles.” I don’t see this changing quickly with the big brands. What’s it take, something like 60 miles to turn a cruise ship? Besides, I’ve always mistrusted guys with suspenders unless they’re genuine, bona fide farmers, or younger than six. But I do see increasing opportu-nity for the smaller brands that I so unabashedly root for. Retailers seem in the mood to buy local and seek out real innovation, and that’s where these smaller players fit in so well.

Where’s This Headed?I have to wonder where all this is headed, since Walmart is the cham-pion of the big brands. It’s easy for shoppers to see Walmart is cheaper when comparisons on the same big brand are so readily available. This has more than a few retail-ers I’ve spoken with tentatively rethinking their commitment to the big brands. After all, there’s no favorable differentiation available to them in carrying the same product Walmart does, but at a higher price. Will this result in a weakening of the big brands, and new opportu-nity for the little guys? Or will the nerds rule? Hmm….


NEW PRODUCTS

In-Shelf Frozen Dog FoodMedina, Ohio-based Bil-Jac (www.bil-jac.com) is debuting a patented in-shelf freezer for its premium frozen dog food, allowing it to sit along-side dry dog food and treats. The new freezer, which re-portedly goes from the box to a fully stocked standard shelf in 20 minutes, com-pleted successful tests at two Ohio stores: a Heinen’s in Avon Lake, and an Acme store in Akron.

Wheat-Free WafflewichesIan’s (www.iansnaturalfoods.com), Lawrence, Mass., introduces wheat-free/gluten-free Wafflewich break-fast sandwiches in two varieties. Maple Sausage & Egg Wafflewich comes in a 10-ounce package and is also casein-free. Egg & Maple Cheddar Waf-flewich, in a 9-ounce package, is vegetarian and also nut-free. Waffle-wiches are sandwiched by two delicious wheat-free, gluten-free waffles. As with all of Ian’s products, the items don’t have hydrogenated oils, artificial colors, flavors or preservatives. Suggested retail is $4.99.

Jamba Juice BarsJamba Juice Company (www.jambajuice.com), Emeryville, Calif., and Eugene, Ore.-based Oregon Ice Cream Company (www.oregonicecream.com) are rolling out a line of frozen fruit sorbet and frozen fruit sorbet & yogurt bars. The all-natural non-dairy bars are made with real fruit, provide a good source of vitamin C,

and contain pre-biotic fiber. The 70-calorie fruit sorbet bars come in two flavors: Peach Blackberry Smash and Strawberry Lemon Swirl. The fruit sorbet & yogurt bars, with 80-90 calories each, come in three flavors: Vanilla Strawberry Jubila-

tion; Vanilla Blueberry Pomegranate Perfection; and Coconut Pineapple Passion Smashin’. Each box of four 2.5-ounce bars, distributed by Oregon Ice Cream under license from Jamba Juice, has a suggested retail of around $3.99.

Rockin’ RefuelPhoenix-based Shamrock Farms (www.shamrockfarms.net) introduces Rockin’ Refuel, a protein-fortified sports recovery beverage made with milk and 20 grams of protein. The 12-ounce bottles come in choco-late, strawberry and vanilla, and contain nine essential nutrients, naturally occurring electrolytes, and no artificial sweeteners or high-fructose corn syrup. They have a low glycemic index. Suggested

retail is $1.39. To support the launch, Shamrock partnered with the Hoop It Up 3-on-3 basketball tour for a series of 11 local market weekend tournament events, as well as the nationwide Rockin’ Refuel “Most Rockin’ Shot” contest. For details, go to www.rockinrefuel.com.

Organic VeggiesVillage Grown Organics (www.villagegrownor-

ganic.com), Kelton, Penn., debuts a variety of hand-harvested IQF organic fruits and vegetables ranging from asparagus to edamame to mixed berries. The company grows, packs and ships its products. Within one or two hours of being picked, every vegetable is hand processed in one of three processing plants within walking distance of the company’s fields. No additives or preservatives are used, and crops are grown from non-GMO seed. Hand harvesting and processing allows Village Grown Organic to grow heir-loom varie-ties of veg-etables. The ten-ounce microwave-able pack-aging has a suggested retail price of $2.49 to $2.79.

What’s driving shoppers to frozen food aisles? Two things ... Authentic ethnic food and richly unique flavors. Indian food tops the charts when it comes to category growth,* and Tandoor Chef is the leader when it comes to flavor – not to mention rings. Find out what true Indian cuisine and Tandoor Chef can do for your freezer door. Call your sales representative today at (800) 468-6499.

TandoorChef.com

Authentic Indian cuisine means more authentic rings.

Become a fanon Facebook

Follow uson Twitter

*A September 2009 survey of ethnic food by the market research group Mintel found that the fastest growing segment was Indian food, with sales increasing nearly 35 percent from 2006 to 2008.

Hand-Held Appetizers

Naan Breads

Vegetarian Entrées

Non-vegetarian Entrées

Frozen Chutneys

NaanPizzas

Naan Non-vegetarian Frozen NaanVegetarian Hand-Held

What’s driving shoppers to frozen food aisles? Two things ... Authentic ethnic food and richly unique flavors. Indian food tops the charts when it comes to category growth,* and Tandoor Chef is the leader when it comes to flavor – not to mention rings. Find out what true Indian cuisine and Tandoor Chef can do for your freezer door. Call your sales representative today at (800) 468-6499.

TandoorChef.com

Authentic Indian cuisine means more authentic rings.

Become a fanon Facebook

Follow uson Twitter

*A September 2009 survey of ethnic food by the market research group Mintel found that the fastest growing segment was Indian food, with sales increasing nearly 35 percent from 2006 to 2008.

Hand-Held Appetizers

Naan Breads

Vegetarian Entrées

Non-vegetarian Entrées

Frozen Chutneys

NaanPizzas

Naan Non-vegetarian Frozen NaanVegetarian Hand-Held


NEW PRODUCTS

Sauté Your WayA La Carte Specialty Food (www.alcfood.com), New Orleans, La., introduces a line of frozen entrees called Sauté Your Way (www.sauteyourway.com), featuring wild-caught, domestic Gulf of Mexico shrimp. Packaging prominently notes that

the products are made with sauce created by “Chef Paul Prudhomme’s magic seasoning blends.” Current varieties are: Asian Soywabi Sauce, Thai Red Curry Sauce, New Orleans Roasted Garlic Sauce and Key Largo Lemon and Dill Sauce. Additional sauce flavors will be added, linking particular flavors with cities or regions. The 18-ounce packages contain eight ounces of shrimp (60-70 count per pound) and 10 ounces of sauce. They serve four when pasta or rice is added. Suggested retail is $6.99.

Margaritaville Chicken WingsOakwood, Ga.-based Wayne Farms rolls out Margaritaville chicken wings in four flavors: Island Buffalo with pineapple Buffalo sauce; Caribbean BBQ with Caribbean BBQ sauce; Or-ange Peel with sweet and sour sauce; and Mango Chutney with sweet man-go chutney sauce. The fully cooked frozen breaded chicken wings with accompanying sauce packets come in 28-ounce stand-up resealable bags. They are packed eight to the case. Suggested retail is $8.99.

Spreads with Greek YogurtCedar’s Mediterranean Foods (www.cedarsfoods.com), Bradford, Mass., has added a variety of cheese spreads made with Greek yogurt. The company’s traditional flavored Tzatziki (Greek strained yogurt, cucumber/garlic) has been very successful, and a

spokesperson says “We feel Greek yogurt-based dips will be a great

category.” Cedar’s is putting a healthy, lighter, fresher spin on popular flavors like French On-ion, Blue Cheese, Artichoke/Spinach Cheese and Jalapeno/Artichoke. The items can go in

dairy (11-ounce packages) or deli (8-ounce packaging).

New from Tony Roma’s Rupari Food Services, Deerfield Beach, Fla. (954-480-6320), introduces four 20-ounce frozen barbecue ap-petizers under the Tony Roma’s label. All feature Tony Roma’s hickory barbecue sauce. They are: Boneless Pork Ribs — finely cut pork shoul-der meat, slowly smoked; Pulled Pork— succulent smoked, hand-pulled pork shoul-der; Pork Spareribs — hand selected pork spareribs sea-soned with the company’s signature dry rub; and Pork Rib Bites — sparerib appetizer pieces seasoned with the signature dry rub. For more info, see our story on appetizers in this issue.

Sorbet SqueezupsThe Jolly Llama Company (www.jollyllamasorbets.com), San Fran-cisco, launches four-packs of its Real Fruit Sorbet Squeezups; they had been available previously only in three-ounce single-serve tubes. The products are all-natural, gluten-free, dairy-free, fat-free, and GMO-free and come in Mango, Strawberry, Blueberry, Acai, and a new Raspberry flavor. The new four-pack Squeezups boast a 15%

reduction of sugar content, and a lower calorie count. The products are sweetened with natural pure can sugar, and are fortified with fiber and vitamins A and C. Packaging is sustainable and recycling; the compa-

ny donates a por-tion of income to organizations dedicated to ending world hunger. Sug-gested retail is $4.99 to $5.99.

To see more new products, go to www.fdbuyer.com Got a new product you want featured? Tell Kirsten Gehlbach, at [email protected]

Kahiki.com

We are committed to high quality and innovation here at Kahiki.

We pay close attention to consumers’ ever-changing taste palates

and trends. Our blending of research and testing led us to entrées

containing Lo Mein noodles. In popular flavor profiles such as

Kung Pao Chicken and Pepper Steak, these entrées will wow the

taste buds of your customers. And, round out your line of Asian

products with the rest of the Kahiki line of entrées and appetizers.

Sophisticated Taste Mixed with Lo Mein Noodles

AppetizersSingle-Serve Entrées Multi-Serve Entrées

NEW at Kahiki


SUMMIT: 2010

GOT ‘SHOPPER-CENTRIC?’ At SymphonyIRI Group’s 2010 Summit, experts hold forth on engineering shopper relationships, innovations in analytics, and rewiring retail/marketing.

BY WARREN THAYER

Retailers and vendors need to focus more on acquiring a deeper understanding of their

customers and what motivates them to buy and remain loyal. Many tradi-tional metrics fall short on providing sufficient actionable insights in today’s recessionary environment. Sessions at SymphonyIRI Group’s Summit 2010 March 22-24 in San Antonio often focused on “shopper-centric” category management, and the tools and techniques you need as consumers change their shopping behavior. (Information Re-sources, Inc. — or IRI — has renamed itself SymphonyIRI Group, reflecting its broader role in today’s market.) There’s been too much focus on categories and quar-terly sales versus things like the shopping experience, and share of shopping trips. That’s the gist of what I took away from this year’s conference, which included a good mix of more than 1,000 marketers, including friends from Ruiz Foods and Kahiki Foods, among others. Parts of the conference reminded me of the Efficient Consumer Re-sponse sessions of a generation ago, with many of the same concepts coming up but with different names for them. Yet there’s no doubt that discussing them anew — with their latest nuances — is healthy. New technology and means of communi-cation/media have changed the rules permanently, and consumers are always a changing dynamic.

Here’s coverage of a few of the sessions.

NEW SHOPPER HABITS NEED NEW RESPONSES We’ve gone about as far as we can with price; now we need innovation to dig out of the hole we’re in.

Dr. Romesh Wadhwani, chairman, and John Freeland, president and CEO, SymphonyIRI Group, shared thoughts on innovation at the start of the conference. Here’s a paraphrased synopsis… We’ve gone about as far as we can with price; now we have to rely on inno-vation to drive growth. Retailers need to think less in terms of categories and more in terms of shoppers. They’d also be wise to part-ner with vendors to build programs that drive loyalty. Today, 55% of Americans shop at 10 or more stores annually — loyalty pro-

grams are less strong.

Shopper Trips Up 6%The number of shopper trips is up 6%; and the number of stores a shop-per visits per month has nearly doubled to about eight or ten. Capturing shopper trips from your competitor — or not los-ing them to your competi-

tor — is of huge importance. Leading-edge retailers are mov-ing toward shopper-centric category management, using more granular data and integrating insights about shopper segments into their tradi-tional metrics. A year ago, half of shoppers made lists; today, 83% do so, and the lists are increasingly specific, often down to the brand level. Given that “the moment of truth” is apt to happen in the home before the shopping trip, it would be wise to move some trade spending away from in-store and

toward direct targeting in the home. The next few years will be ones of thrift and affordability — major changes in buying behavior. Clubs and dollar stores have been growing; C-stores are down. A few surprises: In 2009, spending went up among low-income households, and retirees, but down in middle class households. Shoppers are moving away from impulse purchases and toward buying based on information. They expect simplicity in promotion, variety and all facets of the shopping experience. Besides share of wallet, we need to

know share of purchases made for an occasion, event or holiday. We need to apply strategic seg-mentation around shop-per health stages and life stages. Consumer spending on health and wellness prod-ucts will see double-digit growth over the next five

or ten years. Pepsi expects sales from its good-for-you products to triple over the next ten years.

WHAT’S NEW? SymphonyIRI Chicago-based Information Resources Inc. is now the SymphonyIRI Group Inc. The announcement came at its Summit 2010: Reinventing CPG and Retail Conference in San Antonio. The company also unveiled a new set of solutions for predictive, automated analytics, technology platforms and strategic consulting services. “An important founda-tion of these new capabilities is the Advantage Solutions suite, built on the breakthrough IRI Liquid Data platform,” a press release said. “While we now have all of the capabilities to play a much broader role, the IRI brand name in some ways was confining,” said John Freeland, president and CEO. He said the last two years have been about fortifying its capabilities and innovating execu-tional competencies to help clients with their strategic needs. n

DR. ROMESH WADHWANI

JOHN FREELAND

Palermo’s continues to drive the hottest frozen pizza segment in a category that’s still cooking!

Our artisan-quality toppings, variety of authentic Italian crusts and true pizzeria flavor are

helping retailers capture more pizza

occasions and increase their frozen

pizza sales. Want to learn how this

hot brand can

help increase your category sales? Find out by calling

Don Ostergren, our VP of Sales, at 800-800-7912.

Visit us online at stockpalermos.com© Palermo Villa Inc. 2010

*52 week IRI sales report ending 11/29/09

Have you noticed part of yourfreezer case heating up?

2009 Frozen Pizza Sales*

PREMIUMSEGMENT

+8%

+17. 7%growth

CATEGORY

+6.1%

164-3001 Chart Ad FDB1-10:Layout 1 1/8/10 4:55 PM Page 1


SUMMIT: 2010

FOOD LION TESTS OUT NEW TOOLSHere’s how the company is using new tools to learn about its shoppers and collaborate with its vendors.

Those who can’t or won’t take part in collaboration spanning the entire supply

chain will struggle, as traditional category man-agement processes are not enough to succeed anymore. That’s the word from Rick Anicetti, CEO of Salisbury, N.C.-based Delhaize America Shared Services (Food Lion, Bloom, Harvey’s, Reid’s, Bottom Dollar Food). Ani-cetti, speaking at the Summit 2010 of SymphonyIRI Group March 23 in San Antonio, said new tools will be required to push greater discovery, as “pushing old buttons won’t even produce old results.” He said that analysis for actionable understanding today requires greater levels of sophistication in both tools and people. With the economy hurt-ing, Food Lion wanted to capital-ize on changing consumer behaviors. These included more use of coupons, shopping lists and private label, and less use of restaurants and buying of organics, for example.

Trip MissionsSo the company augmented its shopper segmentation by adding trip missions it defined as: Grab ‘n go, for tiny trips and immediate needs; On the Fly, for the “post-it note” trip; On a Mission, for “got a list, get out of my way;” and finally the Pantry Packing trip, for “big

basket, whole store.” But as Anicetti noted, it was still not possible to tell which aisle specific shoppers went down and gain further understanding of how they made pur-chases. So the company set up two lab stores, each equipped with 120 over-lapping cameras with face recognition software (signs at the entrances advise shoppers of the cameras). The cameras track and analyze each consumer transaction through-

out the store, helping Food Lion understand patterns and nuances that obstruct sales. The cameras will be in-stalled in two additional stores later this year. The system will have mapped 600,000 cus-tomer transactions by October, and will be able to integrate this infor-mation with loyalty card

data, segmentation clustering and trip mission analysis and insights. Anicetti showed a “traffic heat map” of a store, showing which aisles and departments got high, medium and low traffic. You can learn more about this by going to VideoMining,

Food Lion’s vendor for the program, at www.vide-omining.com. The company works with a variety of manufactur-

ers, including Tropicana, ConAgra, Coca-Cola, Nestlé, General Mills and Kellogg’s. Food Lion shares insights with its vendor partners via: —Vendor Pulse, store-level item-level movement data, used to drive in-stock conditions, inventory planning and promo planning. —Shopper insights Portal (SiP), an on-line reporting system for sharing Food Lion shopper and trip insights, includ-ing info on store clusters, customer segments, and trip missions. —Vendor Collaboration Team, a

group of dedicated analysts sup-porting SiP subscribers with ad hoc, deep dive analysis involving shopper insights.

Goals OutlinedFood Lion is implementing Customer-Centric Category Management Goals that Anicetti outlined: —Integrate customer insights into the category management planning proc-ess to provide unique shopping oppor-tunities across clusters and banners. —Implement shared service support category management and mer-chandising functions to support all banners in the Food Lion family and Bottom Dollar Food.—Implement customer-centric role-based planning by major category through clearly defined strategic and tactical guidelines. —Standardize and document cat-egory management and merchandis-ing processes. The customer-centric category management program integrates in-formation from various databases into category roles, strategies and tactics. It also affects merchandising, assort-ment, price and promotion execution. Each category is classified as either “cluster” or “standard.” A stand-ard merchandised category doesn’t require different treatment when merchandised across clusters or ban-ners. A single enterprise plan reflect-ing overarching banner strategies is sufficient. But a cluster merchandised category requires different treat-ment to maximize sales and profit across clusters and banners. There-fore, multiple, customized plans are constructed to manage them across clusters and banners. These catego-ries may even have different roles across them. It appears that Food Lion’s plans are working. It surveys shoppers on how many of them rate their store as either “good or great,” and over the last couple years, that percentage has risen from the high 80s to the low 90s. n

—Warren Thayer

To better understand shopper behavior, it set up two lab stores, each equipped with 120 overlapping cameras with face recognition software.

RICK ANICETTI

www.fdbuyer.com14 APRIL 2010

BETTY BUYER

TOLD YOU

SO!Walmart is putting

back some of the items it had cut. There’s

a lesson here!

BY SAMMY

SELLER

Hate to say “I told you so,” Betty, but Walmart is rethink-ing its SKU rationalization

program and putting back some of the items it had cut. It seems consumers actually missed the variety (what have I been saying all this time?) and took some of their shopping elsewhere. Foot traffic in Walmart has been down, and the marketing geniuses there have dis-covered that even some of the items that didn’t meet velocity hurdles were an important part of the mix. Still don’t understand, Boop-sie? Okay, think of what’s on your shelf as a fine piece of music. Now, read these extracts from a famous satirical essay, wherein an efficiency expert reviews a performance of Schubert’s Unfinished Symphony. “For considerable periods, the four oboe players had nothing to do. Their numbers should be reduced and their work spread over the whole orchestra, thus eliminating the peaks and valleys of activity. All twelve violins were playing identical notes with identical motions. This unnec-essary duplication and the staff of

this section should be drastically cut with consequential substantial sav-ings… Much effort was expended in playing 16th notes or semi-quavers. This seems an excessive refinement, since most of the hearers are unable to distinguish such rapid playing. It is recommended that all notes be rounded to the nearest 8th.” Now do you get it? The merchan-dising mix can’t be decided by your efficiency experts, Betty. Sure, there’s science and algorithms (big word — sorry!) involved here, but buy-ing and merchandising are all about the music. Shoppers do like variety, and even some things that — on the surface — may seem like duplica-tion. And they can distinguish more subtleties in product than your bean counters can imagine. So take another look at your SKU rat program, and don’t fall into the same trap Walmart did.

WRONG AGAIN, SAMMY!What are you smoking? This is a Walmart issue that has nothing to do with us.

BY BETTY BUYER

Put a sock in it, Sammy. And if you ever call me Boopsie again, so help me I’ll delist all your

items and shove all that inventory down your pie hole. How’s that for SKU rationalization? Listen, your little story about the efficiency expert was amusing but irrelevant. Actually, though, I wasn’t aware that Mad magazine was still publishing, but I’m glad you keep up on those things. For starters, Walmart supercent-

ers have long had a lot fewer SKUs than traditional supermarkets. As they expand deeper into our channel, they’re still finding their way, and so you’ve seen some swings and some corrections. Sorry to rain on your parade, but this is a course correction for them, and you can’t expect supermarkets to react by suddenly car-rying all of your SKUs. Think about it, Sammy. We in the traditional channel have had more time to test out our thoughts on variety over the years. And we’re still more likely to carry more of your items than Wally does. Don’t forget that shoppers have different expecta-tions for different channels — they simply don’t expect as much variety at Walmart. What you really have to worry about, Sammy, is that all you manu-facturers have been trying to play it safe and doing less innovation. We’re seeing more and more commoditiza-tion of brands, with price the only determining factor. If our shoppers don’t see any real differentiation in offerings in a category, we’re still going to make more cuts. Often, that means we’re going to add innovative private label. Sorry it had to come to this, Boopsie. Suck it up! n

Betty Buyer and Sammy Seller are pseudonyms for retailers and manu-facturers who still believe things could be better. Got a comment or an idea? Write to [email protected].

WLF_FDAd to client.pdf 1 2/19/10 1:32 PM


F A C T O I D S

THE DATABANK

35.5%Dollar gain by lemonade in the 12 weeks, to $51,990,316. It’s the

fastest growing sub-category with sales over $1 million

(again).

30.8%Dollar gain by pastry/Danish/coffee cakes, to $2,379,835 in

the 12 weeks. Private label, with 82% share, is up 18.2%.

105.37The fastest time in seconds

to eat a 12” pizza. The record was set by Josh Anderson (New

Zealand) on March 22, 2008, according to the Guinness Book

of World Records. .

TOP DAIRYBY BESSIE BOVINE

Supermarket sales of dairy foods dipped 3.7% to $11.388 billion in the 12 weeks ended Feb. 21, 2010,

compared with the year-ago period, according to Information Resources, Inc., the fun-loving market research firm based in Chicago. Units climbed 1.7% to reach 5.001 bil-lion. Volume was up 2.8% to 42.152 billion. Volume with merchandising support was off by 2.4% to 42.3%. For the 52 weeks ended Feb. 21, dol-lars fell 5.4% to 46.756 billion. Units were up 2.2% to 20.858 billion and volume was up by 2.7% to 179.688 billion. Volume sold with merchandising support was up by 2.1% to 47.1%. Our chart shows the largest sub-cate-gories in the dairy department in super-markets during the 12 weeks ended Feb. 21, 2010. Data is for the brands as origi-nally trademarked, and may not include line extensions.

SUB-CATEGORY $ SALES $% CHG. UNITS % CHG. VOLUME $ CHG.

SKIM/LOWFAT MILK $1,539,641,472 (7.0) 591,967,744 (1.0) 3,714,486,784 (0.3)Private Label $995,811,904 (6.8) 404,038,272 (0.6) 2,683,459,072 0.6Hood Lactaid 100 $57,454,320 (1.0) 14,097,632 (1.1) 56,509,144 0.4Horizon Organic $43,975,504 (1.0) 10,623,403 3.2 47,383,804 1.8Organic Valley $19,249,112 (1.5) 4,687,481 1.1 20,081,204 (0.9)Prairie Farms $18,254,542 2.6 7,577,661 11.1 48,785,908 10.4Deans $15,519,778 (8.5) 6,493,176 (2.3) 34,691,524 (1.5)Hood $13,318,968 (13.6) 4,976,194 (4.3) 26,162,148 (5.4)Hiland $12,180,051 15.5 4,779,878 21.9 27,722,266 18.6Garelick Farms $12,041,999 (22.4) 4,873,310 (14.5) 23,041,296 (14.5)Kemps Select $11,455,517 (13.2) 4,044,577 (4.6) 25,066,372 (2.6)

YOGURT $841,718,100 4.2 851,233,500 3.8 471,471,600 4.6Private Label $86,985,850 (3.3) 146,807,200 (1.0) 73,601,390 (3.1)Yoplait Original $82,949,500 (4.9) 118,835,000 (0.7) 51,752,860 (0.1)Yoplait Light $81,017,280 (3.1) 127,180,000 2.8 50,887,120 2.6Dannon Light N Fit $61,852,720 23.2 83,017,500 23.2 42,499,880 28.3Dannon Activia $51,491,190 18.6 17,737,770 19.9 22,078,050 22.3Stonyfield Farm $28,869,580 (7.1) 17,763,450 (3.4) 14,139,300 (3.4)Dannon Activia Light $27,967,670 17.6 10,090,390 20.6 12,063,870 21.41Chobani $27,259,300 209.3 21,140,860 210.8 8,587,909 7.6Yoplait Go Gurt $25,754,710 6.1 8,804,230 6.4 10,758,690 211.6Fage Total $21,462,430 36.5 9,220,789 46.8 4,396,985 49.

FRESH EGGS $755,065,152 (4.8) 368,124,672 (2.1) 5,096,174,592 (0.8)Private Label $520,436,160 (5.5) 272,674,432 (1.7) 3,834,669,056 - Eggland’s Best $74,462,808 3.1 25,395,320 5.1 312,548,032 6.0 Rose Acre $12,955,935 14.2 7,184,750 20.4 101,679,616 18.6 Cal Maine Sunup $10,116,532 10.5 3,753,046 2.2 77,956,848 4.3 Land O Lakes $10,071,208 0.9 3,164,708 2.5 37,972,424 2.5 Hillandale Farms $5,584,441 (17.4) 2,960,748 (17.0) 36,401,088 (17.3)Penn Dutch Farms $4,693,342 0.4 2,480,456 (0.3) 33,265,150 (0.9)California Ranch Fresh $4,218,379 (22.3) 2,121,411 (19.1) 28,947,836 (20.7)Crystal Farms $4,148,370 2.9 2,624,478 7.9 33,477,736 7.64 Grain $3,979,542 (9.3) 1,545,662 (7.9) 18,547,938 (7.9)

NATURAL SHREDDED CHEESE $630,957,248 (8.5) 245,550,336 4.9 147,677,184 5.4 Private Label $347,387,808 (1.7) 139,379,776 10.9 91,725,760 12.1 Kraft $115,057,504 (29.1) 45,805,772 (15.3) 23,569,346 (18.1)Sargento $62,359,936 9.0 23,280,928 27.3 11,909,333 25.3 Crystal Farms $24,811,200 (5.3) 9,718,878 13.3 5,712,598 9.7 Sargento Chefstyle $12,556,694 (3.2) 4,266,265 13.2 2,515,451 10.8 Borden $9,634,180 (16.3) 4,311,436 2.5 2,216,076 1.8 Di Giorno $8,600,379 (4.4) 1,989,481 (2.9) 736,610 (3.3)Tillamook $5,230,484 (4.4) 1,582,770 1.6 1,065,304 18.9 Stella $5,054,904 4.3 1,431,946 11.8 455,125 11.8 Sargento Artisan Blends $4,573,672 74.3 1,826,824 99.5 913,412 99.5

ORANGE JUICE $602,826,304 (4.9) 197,837,440 0.5 14,026,321,920 0.7 Tropicana Pure Premium $193,150,880 (3.1) 54,996,712 0.3 3,841,301,504 0.2 Private Label $109,280,416 (1.8) 44,644,140 3.5 3,674,450,432 5.8 Simply Orange $93,722,080 5.7 26,966,646 11.5 1,589,939,712 8.5 Minute Maid Premium $72,575,448 (13.6) 23,828,694 (3.7) 1,728,946,176 (5.4)Florida’s Natural $69,779,472 (5.6) 22,783,118 (3.3) 1,509,747,328 (3.1)Minute Maid Premium For Kids $5,378,744 2.8 2,162,322 13.4 138,388,608 13.4 Citrus World Donald Duck $4,275,398 14.0 1,950,287 28.5 125,932,400 28.7 Tree Ripe $3,975,349 (10.1) 2,349,468 3.1 136,409,536 3.3 Tropicana Pure Premium Hlthy Kds $3,663,053 (24.7) 1,142,373 (21.7) 69,160,064 (21.8)Tropicana Pure Premium Hlthy Hrt $3,344,664 (31.7) 1,118,262 (28.6) 71,568,800 (28.6)

NATURAL CHUNKS $600,873,408 (8.8) 180,921,088 1.8 129,908,488 0.8 Private Label $234,742,784 (11.2) 79,237,040 1.0 62,906,892 1.1 Kraft $41,486,420 (20.2) 17,114,294 (2.2) 9,308,893 (5.3)Tillamook $37,310,748 (16.0) 7,417,170 (6.4) 8,978,237 (4.5)Kraft Cracker Barrel $27,229,170 0.4 8,302,675 11.9 5,201,584 10.5 Cabot Vermont $18,319,810 (5.7) 6,180,355 (2.9) 3,469,899 (2.5)Laughing Cow Mini Babybel $12,347,002 32.3 3,305,385 37.1 929,833 37.1 Crystal Farms $10,970,132 (10.1) 4,865,412 6.4 2,642,300 4.9 President $10,925,443 (1.1) 1,894,163 (1.0) 930,356 0.4 Belgioioso $10,683,028 7.4 2,253,238 12.4 1,352,823 14.1

17www.fdbuyer.comAPRIL 2010

F A C T O I D S

25.1% Dollar gain by vegetable

juice cocktails, to $8,270,298. Bolthouse Farms, up 39.8% to

$4.6 million, is the leader.

25.0% Dollar gain by juice and drink

smoothies, to $41,617,640. Leader of the pack is

Bolthouse Farms again, up 87.9% to $11.6 million.

36.0The record for eating cock-roaches (presumably at a single sitting), set by Ken

Edwards in London on March 5, 2001, according to Guinness.

-6.9Dollar loss by natural cheese

category, to 1.787 billion in the 12 weeks. “All Other Forms”

is the only sub-category scor-ing a gain — up 6.7% to $1.5

million. But the segment leader in “All Other” — Kraft Snackables — is down by 7.1%.

6.5%Dollar gain by breakfast entrees, to $11.4 million.

Driving the gains are private label, and the Bob Evans

brand.

17.35Number of seconds it took

Nico Surings to run 100 meters (328 feet) barefoot on ice,

setting the world record for such a feat. He did it in the

Netherlands on Dec. 8, 2006.

$7,204Sales of potato pancakes in

the 12 weeks, all of them from “Irene’s,” which apparently has the market to itself. The sub-

category is down 12.0%.

SUB-CATEGORY $ SALES % CHG. UNITS % CHG VOLUME % CHG

WHOLE MILK $582,636,672 (14.2) 220,261,808 (7.3) 1,375,565,312 (7.4)Private Label $387,575,392 (13.8) 151,677,184 (6.9) 1,004,921,152 (6.6)Horizon Organic $17,975,992 (0.4) 4,191,146 3.0 19,452,904 3.3 Hood Lactaid 100 $12,687,394 (7.5) 2,862,021 (7.8) 12,722,366 (6.2)Hiland $6,732,444 21.2 2,595,176 26.3 14,941,507 29.0 Borden Milk Products Lp $6,544,944 (11.8) 2,185,046 (0.1) 12,495,388 (0.4)Prairie Farms $5,873,023 (5.2) 2,322,944 3.6 14,181,898 4.5 Tuscan Farms $5,553,048 9.2 2,260,024 19.9 11,448,946 15.0 Organic Valley $5,145,402 (7.1) 1,253,712 (3.3) 5,402,404 (6.6)Hood $4,614,331 (15.0) 1,776,748 (6.7) 8,708,985 (7.3)Poinsettia $4,435,694 (26.4) 1,797,172 (12.6) 13,009,360 (10.0)

MARGARINE/SPREADS/BUTTER BLENDS $329,465,600 (7.4) 164,701,072 (3.3) 202,784,816 (2.7)I Can’t Believe It’s Not Butter $54,891,856 0.2 20,282,684 5.7 21,077,890 5.7 Shedd’s Country Crock $42,304,640 (16.6) 16,028,932 (11.9) 33,095,790 (7.3)Smart Balance $31,902,144 (11.3) 10,169,045 (10.8) 10,968,849 (9.9)Blue Bonnet $23,815,966 (11.6) 23,893,804 (0.6) 26,957,590 (3.2)Land O Lakes $23,693,292 13.6 11,216,660 14.0 7,902,964 5.9 Private Label $23,011,944 (15.7) 17,020,864 (14.2) 25,884,734 (12.9)Shedd’s Country Crock Plus $16,850,580 43.5 6,353,383 53.8 14,052,837 61.8 I Can’t Believe It’s Nt Buttr Lght $15,654,950 (8.5) 6,123,710 (1.9) 6,134,514 (2.3)Parkay $12,529,452 (15.5) 7,209,372 (12.6) 7,544,266 (12.1)Imperial $12,466,041 (16.5) 13,798,830 (3.6) 14,321,444 (5.0)

BUTTER $311,442,560 (8.6) 124,389,776 (0.5) 117,743,064 - Private Label $156,184,672 (12.5) 70,637,664 (4.5) 68,670,672 (4.3)Land O Lakes $83,479,288 2.4 27,309,178 16.7 25,298,610 19.8 Challenge Butter $12,796,152 (16.2) 4,140,882 (8.8) 3,589,699 (9.5)Breakstone $6,956,480 (24.0) 2,960,910 (18.0) 1,669,270 (26.3)Crystal Farms $5,799,451 6.0 2,546,170 21.5 2,444,405 20.8 Cabot $5,252,865 (14.5) 2,094,505 (3.9) 2,092,778 (3.9)Tillamook $5,188,482 (21.7) 1,779,256 (14.5) 1,779,256 (14.5)Keller’s $5,059,086 - 1,991,274 5.8 1,934,394 8.2 Hotel Bar $3,450,206 9.4 1,505,028 22.8 1,400,891 23.8 Darigold $3,005,885 (11.5) 1,166,331 (4.8) 1,142,559 (4.1)

PROCESSED CHEESE SLICES $268,583,392 (12.2) 100,034,688 (2.0) 81,812,752 (1.7)Kraft Singles $84,387,232 3.1 29,727,152 22.1 25,119,350 18.5 Private Label $80,965,008 (12.0) 35,591,288 (1.0) 29,307,644 (0.2)Kraft $26,622,440 (31.0) 9,727,599 (30.0) 7,599,295 (28.3)Kraft Deli Deluxe $22,797,872 (27.7) 4,734,590 (25.5) 4,388,341 (26.7)Borden $13,082,686 3.2 5,657,475 26.2 4,491,865 26.8 Kraft Velveeta $11,418,543 (6.8) 2,828,094 0.4 2,322,584 (0.7)Crystal Farms $5,426,550 (7.8) 2,234,666 6.7 1,859,141 3.6 Land O Lakes $4,071,605 (27.8) 1,052,801 (28.8) 756,501 (31.8)Galaxy Nutritional Foods Veggie $3,701,530 0.1 1,109,573 0.4 506,298 0.4 Borden Sandwich Mate $1,883,052 (29.7) 1,792,936 (30.1) 944,510 (29.8)

COFFEE CREAMER $249,890,560 7.2 94,853,152 10.5 153,919,456 9.7 Nestlé Coffee Mate $148,769,952 0.4 54,509,772 3.9 89,163,152 4.9 International Delight $50,894,692 4.5 20,100,408 1.2 31,419,796 5.7 Private Label $16,205,446 24.5 6,850,803 21.9 12,434,360 17.9 Nestlé Coffee Mate Carb Select $15,390,574 6.6 4,524,633 11.4 9,049,266 11.4 International Dlght Cff Hou Insp $9,354,665 * 4,836,282 * 4,836,282 * Mocha Mix $3,453,224 (7.6) 1,047,246 (8.3) 2,880,934 (9.3)Silk $3,233,020 1.8 1,539,154 (0.6) 1,793,346 1.7 Hood Country Creamer $923,645 1.0 615,875 (1.8) 1,231,749 (1.8)Bailey’s $813,176 * 362,744 * 413,433 *Knudsen Coffee Creations $199,723 (15.9) 67,702 (15.2) 135,405 (15.2)

FLAVORED MILK/EGGNOG/BUTTERMILK $208,914,512 0.7 97,899,568 5.1 293,842,368 5.8 Private Label $71,368,320 2.0 34,538,380 6.1 129,829,784 7.7 Nestlé Nesquik $13,785,744 (28.9) 9,248,766 (6.4) 10,124,190 (34.4)Hood $7,197,166 4.2 2,409,942 5.0 6,396,584 4.2 Dean’s $6,875,532 3.7 3,563,556 8.1 9,399,112 7.8 Southern Comfort $4,364,834 8.6 1,525,806 9.3 3,051,613 9.3Prairie Farms $4,335,900 5.2 2,237,161 9.0 7,364,200 14.8 Hiland $3,549,888 21.6 1,795,036 25.6 5,437,400 25.8 Horizon Organic $3,279,142 1.8 824,863 2.7 2,805,998 6.1 Darigold $3,118,212 21.0 1,272,112 29.6 3,284,304 27.4

APRIL 201018 www.fdbuyer.com

F A C T O I D S

31.9%Biggest dollar gain in a sub-category with sales of over $1 million — drink/cocktail

drink concentrate, which hit $13,268,363 in the 12

weeks ended Feb. 21. Yoplait Smoothies are the driver here.

66.0Age in years of oldest male stripper, according to the Guinness Book of World

Records. Record was set by Bernie Barker, who still per-

formed in Miami Beach (where else?) in 2000.

24.2%Dollar gain by processed fro-

zen/refrigerated turkey/turkey substitute, to $12,682,931 in the 12-week period. Jennie-O is the

category leader, up by 14.6%. But private label is No. 2, and

it’s up by 104.4%.

THE DATABANK

TOP FROZEN

BY CLARENCE BIRDSEYE

Supermarket sales of frozen foods rose 1.0% to $7.455 billion in

the 12 weeks ended Feb. 21, 2010, compared with the year-ago period, according to Information Resources, Inc., the Chicago-based mar-ket research firm that pro-

vides service with a smile. Units also climbed 2.0% to reach 2.518 billion. Volume was up 0.3% to 3.344 billion. Volume with merchandising support was up by 0.5% to 45.3%. For the 52 weeks ended Feb. 21, dollars climbed 1.8% to $31.785 billion. Units were up 0.6% to 10.769 billion and volume was flat at 15.010 billion. Volume sold with merchandis-ing support was up by 1.5% to 47.1%. Our chart shows the largest sub-categories in the frozen department in supermarkets during the 12 weeks ended Feb. 21, 2010. Data is for the brands as originally trademarked, and may not include line extensions.

SINGLE SERVE DINNERS/ENTREES $789,132,544 (3.9) 376,142,272 (0.2) 238,932,384 (1.5)Stouffer’s $89,431,792 (0.4) 34,926,368 6.5 25,071,240 6.0 Banquet $65,563,864 5.7 64,881,836 10.0 33,975,848 1.4 Weight Watchers Smart Ones $56,947,336 (7.0) 25,921,260 (3.2) 15,254,278 (3.1)Stouffer’s Ln Cuisin Caf Classcs $56,368,172 (15.2) 24,545,958 (11.5) 13,680,692 (12.7)Marie Callender’s Complete Dinnrs $33,097,722 (24.3) 12,663,272 (22.7) 11,332,147 (23.0)Healthy Choice Cafe Steamers $29,313,994 (1.5) 11,156,092 1.0 7,142,467 0.9 Stouffer’s Ln Cuisn One Dsh Favrt $28,942,648 (7.9) 13,699,703 (3.2) 8,401,468 (3.5)Healthy Choice Complete Selectns $27,588,274 (22.7) 10,756,178 (20.8) 7,615,948 (21.3)Swanson Hungryman $26,167,508 1.2 9,069,976 1.1 9,460,001 1.4 Stouffer’s Ln Cuisn Sp Cuisn Clss $24,508,024 (19.3) 10,627,675 (15.8) 6,257,181 (15.5)

PIZZA $782,041,920 6.8 263,473,824 8.9 253,932,448 11.1 For brand listings, see our story on pizza in this issue.

ICE CREAM $756,064,512 (3.5) 231,585,648 0.7 720,230,272 (1.0)Private Label $191,367,488 (4.0) 67,328,496 (0.8) 264,190,304 (4.3)Breyer’s $85,611,312 (1.4) 26,048,532 9.2 77,424,080 9.8 Dreyer’s/Edy’s Slowchurned $55,687,884 (7.2) 15,457,291 (0.6) 46,371,892 (0.6)Blue Bell $51,972,416 6.3 14,199,710 11.4 40,832,616 8.3 Häagen-Dazs $44,332,900 (11.4) 11,741,702 (10.6) 12,877,757 (11.9)Ben & Jerry’s $38,030,920 (12.3) 11,542,107 (13.1) 10,654,204 (11.7)Dreyer’s/Edy’s Grand $26,770,334 (22.2) 7,835,090 (17.1) 23,293,084 (16.9)Wells’ Blue Bunny $25,464,964 5.5 7,053,659 17.5 27,668,772 16.1 Turkey Hill $25,268,624 (10.2) 8,783,118 (5.0) 25,659,856 (9.9)Dreyer’s/Edy’s Fun Flavors $22,360,584 30.2 6,429,475 38.0 19,288,424 38.0

PROCESSED FZ/RFG CHICKEN/CHICKEN SUB $425,486,080 6.4 85,322,912 5.0 109,433,344 9.3 Tyson $106,699,728 8.5 18,969,952 17.0 25,653,760 18.1 Private Label $63,589,488 5.5 11,208,266 1.1 19,795,322 7.9 Banquet $43,236,920 (0.2) 8,408,643 (2.9) 12,702,579 (6.1)Tyson Anytizers $38,206,888 16.5 6,805,054 21.4 8,839,921 25.9 Perdue $29,303,752 18.2 6,187,294 19.8 6,838,761 24.7 Fast Fixin’ $17,362,248 (3.5) 3,616,621 (8.7) 6,609,320 (5.7)Perdue Short Cuts $16,061,869 4.7 3,861,674 9.8 2,081,404 10.6 TGI Friday’s $13,043,122 3.2 2,924,941 (0.2) 2,519,922 1.3Foster Farms $12,932,228 1.2 2,154,378 (1.0) 2,759,838 5.2 Redi Serve $12,388,400 (0.6) 5,494,776 (6.3) 5,457,559 2.0

NOVELTIES $385,672,992 2.4 126,702,560 9.0 165,952,384 2.7 Private Label $55,732,832 (5.6) 21,354,038 (4.2) 39,871,296 (5.7)Weight Watcher’s $31,371,312 (7.7) 7,486,414 (9.4) 8,979,502 (12.7)The Skinny Cow $30,169,344 24.9 6,932,670 31.5 9,074,847 27.3 Nestlé Drumstick $21,468,312 8.9 5,005,140 14.3 7,850,256 18.1 Dreyer’s Edy’s $19,770,392 2.6 5,146,177 6.6 6,041,758 6.1 Klondike $17,846,300 17.5 5,681,436 27.2 9,321,626 27.1 Häagen-Dazs $15,378,988 12.8 8,926,006 27.9 2,902,028 23.1 Popsicle $12,403,118 (12.2) 3,491,556 (12.9) 6,966,120 (11.0)Blue Bell $9,442,848 2.7 2,338,687 0.9 5,035,750 3.1Klondike Slim-A-Bear $9,142,975 (6.0) 2,771,780 3.7 3,484,115 4.3

SHRIMP $333,307,800 6.4 40,004,490.00 7.6 48,681,030 7.9Private Label $205,899,600 13.5 23,736,130.00 12.6 29,584,790 15.1Seapak $13,672,780 17.3 2,273,041.00 12.6 2,011,804 20.5Gorton’s $9,722,463 41.3 1,744,604.00 47.6 1,287,346 55.7Tastee Choice $7,727,450 7.8 753,950.10 28.8 943,685 7.2 Aqua Star $7,544,243 (17.4) 1,160,858.00 (4.8) 1,209,372 (14.7)Seabest $7,520,079 10.6 1,209,093.00 (2.7) 1,334,960 12.5Censea $6,144,026 24.4 558,572.90 26.7 872,975 33.5Cape Gourmet $6,042,595 (16.8) 400,942.00 (19.9) 771,851 (25.7)Sail $3,720,531 21.1 330,615.20 17.5 515,368 17.3Contessa $2,341,401 (56.8) 378,187.00 (55.4) 297,512 (58.6)

FZ/RFG CHICKEN/CHICKEN SUBSTITUTE $308,942,432 (1.3) 54,706,644 - 192,883,264 (2.6)Private Label $136,177,200 1.6 22,773,894 0.6 88,364,072 2.3 Gold N Plump $20,284,528 (12.1) 3,993,131 (6.8) 7,587,481 (8.6)Tyson $22,521,700 (9.6) 3,383,335 (3.5) 8,413,538 (6.1)Perdue $14,589,880 6.3 3,819,042 (1.5) 6,454,442 10.4 Perdue Perfect Portions $12,818,803 0.8 1,615,147 4.0 2,422,721 3.9 Barber Foods $10,386,617 (18.9) 1,990,968 (19.9) 1,875,140 (22.4)Pilgrim’s Pride $8,794,370 8.7 1,210,126 (7.7) 3,738,849 (0.1)

Your Way

Our Way

An American Manufacturing Company Note: Product photography is taken in, or simulates, a retail environment and is not meant to imply endorsement by any brand or manufacturer.

Merchandising AlternativesMerchandising Alternatives

The industry’s most extensive compendium of freezer and cooler merchandising fi xtures; label and sign holders; shelf dividers; auto feed sales systems; shelf management systems; wire and plastic trays; and bar, hook and bin merchandisers. Literally everything you need for profi table refrigerated retail except the cooler itself. Catalog free by phone, fax, email or download.

The industry’s most extensive compendium of freezer andcooler merchandising fi xtures; label and sign holders; shelfdividers; auto feed sales systems; shelf management systems; and plastic trays; and bar, hook and bin merchandisers. Literally everything you need for profi table refrigerated

Catalog free by phone, fax, email or download.

Your Way

Our Way

An American Manufacturing Company Note: Product photography is taken in, or simulates, a retail environment and is not meant to imply endorsement by any brand or manufacturer.

Merchandising AlternativesMerchandising Alternatives

The industry’s most extensive compendium of freezer and cooler merchandising fi xtures; label and sign holders; shelf dividers; auto feed sales systems; shelf management systems; wire and plastic trays; and bar, hook and bin merchandisers. Literally everything you need for profi table refrigerated retail except the cooler itself. Catalog free by phone, fax, email or download.

The industry’s most extensive compendium of freezer andcooler merchandising fi xtures; label and sign holders; shelfdividers; auto feed sales systems; shelf management systems; and plastic trays; and bar, hook and bin merchandisers. Literally everything you need for profi table refrigerated

Catalog free by phone, fax, email or download.

15.0%Dollar gain by pizza crusts/

dough, to $2,238,426. House of Pasta tops out the category, but it’s a real horse race with

private label and Kinnickinnick Foods; all are within $30,000 of

each other.

100.2Age in years of the world’s old-est tandem parachute jumper

(female). The jump was made by Estrid Geertsen on September

30, 2004 over Roskilde, Demark, when she was 100 years and 60

days old, according to Guinness.

13.9%Dollar gain by handheld break-

fast entrees in the 12 weeks, to $84,195,008. Products from

Jimmy Dean, the segment leader, are up by 23.6% and

71.7% respectively.

11.8%Dollar gain by cheesecakes,

to $17,416,148, in the 12 week period. Sara Lee tops the seg-ment, up 6.9% to $8,748,568.

But private label is up 94.5% to $4,424,240.

71.6Age in years of the oldest

performing ballerina, accord-ing to Guinness. Charin

Yuthasastrkosol was 71 years, 203 days when she performed for Thailand’s ambassador to the U.S. in Albuquerque, New

Mexico, on July 21, 2002.

6.7%Dollar gain by meat substitutes,

to $54,757,440, in the 12 week period. Top brand is Morningstar

Farms, up in double digits for several lines. It has about a 60%

share of this sub-category.

THE DATABANK


F A C T O I D S

TOP FROZEN

Country Store $5,760,242 (11.0) 1,409,731 (3.5) 12,267,045 (2.4)Gold Leaf $5,132,422 (25.3) 983,633 (21.6) 9,836,331 (21.6)Tender Bird $4,991,968 (32.2) 821,833 (31.0) 4,366,348 (36.2)

MULTI SERVE DINNERS/ENTREES $304,104,064 0.8 54,628,940 2.8 110,294,512 0.6 Stouffer’s $104,973,128 (8.4) 15,247,930 (8.3) 44,510,604 (6.0)Bertolli $30,190,562 9.6 4,277,690 17.6 6,424,064 17.6 Birds Eye Voila $24,067,580 36.9 6,056,624 43.9 8,377,396 44.3 Private Label $18,037,522 13.4 2,522,356 6.7 6,231,215 12.5 Birds Eye Steamfresh $11,591,210 (2.7) 1,855,096 0.5 2,782,644 0.5 Stouffer’s Easy Express $10,038,218 58.4 1,763,393 96.0 3,047,214 71.7 Bertolli Oven Bake Meals $9,333,153 4.9 1,323,157 12.6 1,920,679 9.0 Contessa $8,488,005 (32.4) 1,438,537 (22.5) 2,136,532 (22.2)On Cor Traditionals $7,563,472 (4.5) 3,096,336 (3.4) 5,520,534 (4.1)TGI Friday’s $7,192,638 11.7 985,287 20.4 1,477,931 20.4

HANDHELD ENTREES (NON-BREAKFAST) $300,971,872 (2.0) 132,547,264 (3.1) 90,674,832 (0.3)Hot Pockets $83,482,624 1.8 33,896,484 3.9 22,135,032 3.5 Lean Pockets $37,294,616 (10.5) 17,128,814 (9.9) 9,720,428 (11.9)El Monterey $23,959,238 16.3 8,337,463 27.8 13,448,572 14.6 State Fair $15,823,054 2.4 3,253,081 1.0 4,964,786 3.9 White Castle $13,715,096 (1.3) 2,797,381 (0.8) 2,255,781 (0.8)Stouffer’s Ln Cuisin Casl Etng Cl $11,963,604 (37.9) 5,174,903 (35.1) 1,940,588 (35.1)Foster Farms $11,041,755 19.6 2,023,977 18.2 4,873,894 17.7 Stouffer’s Corner Bistro $10,217,181 2.6 3,806,622 7.8 1,432,704 8.2 Smucker’s Uncrustables $8,319,411 (4.3) 2,513,392 (5.0) 1,526,780 (2.1)Private Label $7,488,397 (2.3) 3,030,074 (5.3) 2,583,956 (10.0)

FISH/SEAFOOD $274,429,700 18.9 53,173,770.00 20.1 59,407,940 21.7 Private Label $72,036,580 31.6 12,195,460.00 21.2 14,070,840 30.7Gorton’s $49,687,420 9.6 10,729,890.00 15.6 10,321,040 11.4Van De Kamps $19,856,930 33.8 4,238,508.00 41.2 5,475,715 42.2Great American $13,689,580 (7.3) 1,863,534.00 13.9 3,475,651 (7.0)Mrs Pauls $11,593,490 25.0 2,653,651.00 25.9 3,253,474 30.8Sea Best $7,191,780 7.9 1,221,930.00 5.5 1,885,713 30.0Great Fish $3,850,044 (17.7) 745,741.90 (13.1) 1,328,633 (13.1)Gorton’s Grilled Fillets $3,948,664 (4.8) 1,214,136.00 (4.4) 576,714 (4.4)Aqua Star $3,402,981 (15.3) 888,484.60 (21.4) 618,549 (13.8)Fishin $2,946,213 24.4 453,609.10 11.2 830,529 43.3

APPETIZERS/SNACK ROLLS $268,031,840 (0.4) 71,865,624 0.3 68,061,024 0.6For brand listings, see our story in this issue.

PLAIN POTATOES/FRIES/HASHBROWNS $249,940,336 1.6 93,232,440 2.5 175,445,616 2.0 Private Label $80,309,248 3.9 33,556,424 4.2 71,798,112 3.4 Ore-Ida $56,610,740 1.2 21,478,950 2.7 32,665,088 2.1 Ore-Ida Golden Crinkles $19,301,214 8.3 5,531,592 9.6 13,091,990 9.4 Ore-Ida Tater Tots $11,549,509 (0.8) 3,610,306 0.9 7,623,788 0.2 Alexia $7,830,075 8.0 2,295,992 (0.3) 2,603,250 0.8 Ore-Ida Fast Food Fries $7,728,213 3.0 2,273,030 4.9 4,266,555 4.9 McCain $5,850,646 2.9 2,133,824 2.9 3,167,936 1.1 Ore-Ida Golden Fries $5,837,260 (4.5) 1,834,147 (2.5) 3,854,530 (2.7)Ore-Ida Crispers $4,708,916 3.1 1,516,700 5.0 1,895,874 5.0 Ore-Ida Zesties $4,623,832 2.7 1,500,007 4.6 3,000,014 4.6

MEAT (NO POULTRY) $190,433,968 4.0 34,056,352 6.9 68,008,496 3.8 Private Label $37,702,584 8.2 6,305,366 16.1 13,302,882 15.4 Moran $11,511,040 7.1 2,368,164 3.7 4,391,492 11.6 Armour Homestyle $10,018,684 3.4 2,692,224 (6.5) 3,639,696 0.8 Steak-Umm $9,907,796 18.5 1,941,640 30.2 2,011,880 4.8 Bubba Burger $8,389,596 (11.6) 907,971 (10.7) 1,901,132 (11.1)Rosina $8,282,482 2.1 1,182,099 6.9 2,309,705 7.7 Mama Lucia $6,829,035 0.7 1,857,896 22.0 2,519,806 14.0

FRESH BAKED BREAD/ROLL/BISCUIT $139,354,368 (3.3) 52,607,600 (3.2) 45,884,532 (3.5)Private Label $26,159,004 8.7 12,157,468 10.2 10,199,960 10.5 New York $25,301,092 2.2 9,160,393 2.5 6,813,174 2.3 Pepperidge Farm $22,248,350 (3.9) 8,425,410 (4.7) 5,558,150 (5.2)Sister Schubert’s $15,110,071 26.8 4,870,680 32.7 4,060,416 37.5 Cole’s $14,090,700 (5.6) 6,112,536 (4.2) 5,266,109 (4.4)Pillsbury $9,513,054 (30.6) 2,915,179 (36.4) 4,884,304 (26.6)


COVER STORY

BY WARREN THAYER

Just so you’ll know, I always dread doing a cover story on a retailer based in the Northeast.

Invariably, vendors and brokers com-plain about how expensive it is to do business there, how high slotting is, and how, by gum, half these guys belong in jail. Heck, I don’t know. Maybe some of them do. During my brief corpo-rate experience as an ad director in Manhattan many moons ago, I broke Robinson-Patman every 20 minutes or so, excepting for lunch breaks. Like it or not, it was the way things were done. So I probably belonged in jail, too. One day, when angst got

the worst of me and I actually tried to tell the feds how rotten the busi-ness was, they told me they knew all about it and that “It’s just not a prior-ity right now.” True story. So, yeah, when I asked about Ahold, I got it all in spades. With the possible exception of Wegman’s (for the most part), a goodly chunk of vendors quietly (and not so quietly) despise retailers in the Northeast. You know that. But I have to say that the vitriol I heard directed against Ahold for making money on the buy, rather than on the sell, was more widespread than I had expected. So, guys, if you have your hands out too often for every little thing — and only you know if it’s true or not — try knocking it off. Or at least toning it down a bit. Being from the Northeast, you’ve already got two strikes against you. Okay, enough of all this. Most people I spoke with spent more time discussing Stop & Shop than Giant, so even though I’m told the units operate similarly, you should keep that in mind. For example, one vendor has had very different experiences with different Ahold banners, noting that Giant-Carlisle has been “a wonderful trad-ing partner” while Stop & Shop and Giant-Landover “have been more challenging.” He says “Improvement is coming with the new leadership of Carl Schlicker and Jeff Martin

coming over from Carlisle to lead the entire Ahold retail division.” Because they’re not crazy, all the vendors and brokers interviewed insisted on anonymity.

A MIXED BAGI got a real mixed bag of responses to my questions about Ahold. Probably the one that summed everything up best was from Don Stuart, president and CEO of Cannondale Associates, the Wilton, Conn.-based sales and marketing consultancy. Not being one to mince words, Don said “I don’t see them standing out relative to major national chains, but they don’t have Kroger or Safe-way in their markets. There may be an absence of negatives, but there’s also an absence of positives.” Ouch. But this rang pretty true for most of the folk I interviewed about Ahold. What I took away from those interviews was that Ahold is perceived as a decent player that is allowed to coast be-cause it has no stiff competition. In the markets Ahold serves, Walmart supercenters are — compared with other parts of the country — rela-tively rare. Ahold has excellent store locations that serve it well. And a key — but high-price — competitor, Shaw’s (Albertson’s), is exiting some markets in disarray. As one vendor put it, “Ahold’s New England comps are up, thanks to Shaw’s.”

MIXED REVIEWS FOR AHOLD THE GOOD,

THE BAD AND THE MERELY PUZZLING.

APRIL 2010 23www.fdbuyer.com

And as yet another friend told me, “Where it (Stop & Shop) has a stiff competitor like (Demoulas) Market Basket, it has one foot on a banana peel.” But in fairness, most observers agree that Ahold stores offer very good selection and fresh, shopper-friendly appearances. They also say that Ahold’s relentless discipline keeps in-stock levels enviably high. Stuart sees freshness in the stores he didn’t see only a few years ago, “But I don’t think they’ve gone be-yond the realm of the core grocery store,” he says, noting that Ahold would do well to bring in more theater and excitement to the shop-ping experience.

DATA, DATAWhile Ahold has a high-profile loyalty card, Stuart feels it is not on the forefront in terms of using it to target messages and offers to help mold shopper behavior. “I see a lot of opportunity to more aggressively leverage card data in the U.S. for competitive advantage,” he says. Using data is tricky, of course. Ahold buyers sometimes have a tendency to ask trading partners for more and more category data, “which they seem to use to give them an excuse not to act,” complains one vendor. He concedes that this is a problem with many retailers, but somewhat more with Ahold. Several vendors say that between high slots and slow decision-making, the best new product opportunities could go to competitors.

BACK TO HI-LORecently, Ahold went through an EDLP cycle, but then the recession came and shopper interest in that pricing format waned. It is now back to hi-lo, although perhaps not with the depth and frequency of three years ago, Stuart says.

Some frozen/dairy vendors com-plain that the most aggressive price cutting is being done in non-foods, and that to make up for the lower profits there, perishables suppliers are being asked to give concessions or meet onerous margin requirements.

PRIVATE LABELMost observers give Ahold high grades for its private label program. Stuart says “They’ve done a solid job there. They have distinctive offer-ings across most of the store, espe-cially in terms of premium, natural and organic.” He thinks the U.S. operations would do well to better lever-age Ahold’s strong heritage with private label in Europe, drawing from its extensive experience and learnings there. Predictably, most private label ven-dors are pleased with Ahold. They say it is willing to take a chance on innovative new items before they have proven themselves with a major national brand. But some complain about what they call the company’s aggressive use of reverse auctions, saying that loyalty just doesn’t exist. Not the first time I’ve heard that complaint in the industry. Just as predictably, branded ven-dors are not pleased. “Ahold needs to continue its focus on locally sup-plied food, but ease up on its stress on private label so that brands can grow as well,” says one. Says anoth-er, “The program seems to lack clear identification. What would they like to do on private label? Nature’s Promise? Simply Enjoy? What’s the

focus guys?” Several branded vendors say their items — at or near the top of the category — were dropped with-out warning in favor of private label. In some cases, they say these items were returned to the shelf when the new private label item did not meet hurdles.

UKROP’S TO MARTIN’S? Stuart says Ahold has a unique

opportunity to learn from Ukrop’s, the Richmond, Va.-based chain it recently acquired. Ukrop’s was widely regarded as an industry jewel — despite its small size it was often mentioned in the same breath with icons such as Wegman’s, Publix and HEB. Considering its incredibly loyal shopper base and all the great branding that Ukrop’s did, he is puzzled that Ahold is rebanner-ing the stores under its Martin’s name. (This issue is discussed, albeit loosely, in the RetailWire discus-sion on the following pages.) Ahold is sinking some serious cash into refurbishing the stores — including adding more refrigeration. n

AHOLD USA UPDATE—Ahold USA (www.ahold.com), part of Dutch-based Royal Ahold, is reorganizing into one operating com-pany (Ahold USA Retail) with four retail divisions: Stop & Shop New England; Stop & Shop Metro New York; Giant-Landover; and Giant-Carlisle. Support functions are being combined in one unit. —Giant-Carlisle has acquired Richmond, Va.-based Ukrop’s for about $140 million, and is rebannering them with its Martin’s name. —Growth in the U.S. could come via new store for-mats such as the pilot with C-stores Ahold now has in Pennsylvania. —Fourth-quarter profits were hurt by increased promotion and tougher competition.


COVER STORY

STORE BRAND CRITIQUE‘Some of these packages are well done and I like them very much. Others I just don’t get…’

Editor’s note: During a recent trip through Stop & Shop stores, I bought a variety of private label products, and sent photos of them to Bob An-derson so he could share his thoughts about the packaging. Bob is the president of Store Brand Consult-ing, Rogers, Ark., and the former VP/GMM of private label at Walmart. He’s also on our editorial advisory board. If you e-mail him at [email protected], please tell him I said hi. —Warren Thayer

BY BOB ANDERSON

Before I get started with my impressions of these prod-ucts, let me explain a bit of my

private label philosophy First, as a general rule, I don’t think U.S. food retailers need to have a three-tier private label program, because the third tier so often ends up giving up not only margin but — in most cases — quality as well. That said, it’s important to take tremendous care with your pre-mium line. A premium line should be just that — pre-mium. Just having unique flavoring or an additive is not enough. The packaging should clearly shout out to the customer precisely why it’s superior to any brand. And while packaging should be “the window to the product,” it should never be better or worse than the

product quality itself. Being different or unique doesn’t make it premium. The product should be better than a brand both in its ingredients and flavor, exceed-ing national brand standards before you put your name on it. Over the years, I’ve seen many re-tailers go overboard with premium, offering too many SKUs and diluting the message. This confuses shoppers and makes your “premium” products essentially meaningless. Another mistake I’ve seen: having too dramatic a difference between the premium label and the na-tional brand equivalent. If shoppers see a huge differ-ence in qual-ity (as well as price), it may cheapen their perceptions of your na-tional brand equivalent, and you don’t want that. If it were up to me, I’d always make sure that my national brand equivalent had a category-friendly branded look to it that is equal to the best brand on the shelf. In 95% of the cases, I would not recommend copying the same color as the brand. You want to be a brand in your own right, and not a private

label “me-too.” At the same time, you don’t want to look so far apart from the national brand that you look like just another SKU. I’m not familiar enough with Ahold’s private label program to know its tier strategies, so none of the above is meant to be directed at them. But here are my thoughts on the private label photos Warren sent to me. I like how they use product call-outs (as we did at Walmart). This is key to helping sell the product. You only have a very short period of time to “tell the product/brand story”

when the customer is in each four-foot section. I like no more than three callouts, and they can be different based on the product. But if the item doesn’t have three callouts, then don’t do any. Some of the packaging here has only one.

The gelato is one I like a lot. It has that European look that

complements the product nicely. I like the 50/50 picture/curve verbiage approach. It’s clean, fresh and makes a good win-dow to the product.

I just don’t get the light cream. I don’t care for the

cow or the light blue color, and the packaging here looks to be a

BOB ANDERSON

‘As a general rule, I don’t think

U.S. food retailers need to

have a three-tier private label

program, because the third

tier so often ends up giving up

not only margin but — in most

cases — quality as well.’


COVER STORY

bit more generic. I would have suggested going with more of a usage theme of what light cream is used for, than with a cow.

I like the three callouts on the organic soy milk, but I don’t care for the font description of the product. It doesn’t go with the other fonts. But I do like the three product

callouts here. I’m not sure if the light green is a theme for organic items or just this item. If it is for all, then I would not have done it. I get the green/natural thought process, but green doesn’t do well on dairy and other fresh items all that well. Also going with a “theme color” has

not always been success-ful — just ask Nabisco (SnackWells) or Heinz (PINK Weight Watcher’s packaging.)

The waffles look very traditional, and as good as Eggo’s. The colors are clean and fresh, and make you think of rising in the morning. Again, I don’t care for the font, and would like to see three icons here. Store brands and national brands need to quit putting the same old tag lines on products such as “excellent source of 10 vitamins” etc. Also the line “has calcium” — what doesn’t? P&G did a study many years ago, and found Moms really didn’t care about calcium. It was okay to have it in the product, but they didn’t want to pay for it, OR taste it. Just about everything nowadays has calcium, so it’s not a big deal. The industry needs to use icons/tag lines that are relevant to today

issues, such as low salt,

low sugar, sugar-free,

low-fat, fat-free, gluten-

free, transfat-free etc. These are benefits people recognize as being healthy, and not just “another line.”

I like the whipping cream a lot, although I’m not sure about the red ribbon at the bottom. While the ribbon look is okay, I’m not sure how they’re choosing colors.

I would have gone with a dark blue to help offset the red in the berry

and give it pop. The icon callouts need to be more to the center

of the product on this one.

The king crab and ched-dar spread is well done — it’s simple and makes

good use of small space, and I like

the color choice. I understand why they

couldn’t do more here and am glad they didn’t try to.

The pie crust has a clean look, sort of Eu-ropean. But the white plate gets lost and white-on-white is not a good thing. n

OH, AND BY THE WAY… We’ve known for a long time that Bob believes frozen foods aren’t meeting their potential. One day, holed up at an airport, he sent us a diatribe. Here’s an excerpt:

BY BOB ANDERSON

Okay, here is one thing I never got: Unlike the rest of the food departments, frozen has the ability to be a total store within itself. By this I mean you can choose an

appetizer, side dish, bread, vegetable, potato, entrée, and dessert all inside the same department. But few if any retailers lay out the department this way. Frozen food is a key piece of real estate that’s not paying its way.

Instead of “ice cream,” “dinners,” “vegetables” and so on, you might as well name the frozen categories what they really are: “quick/easy,” “belly-filler,” “don’t want to cook,” “can’t afford to eat out,” and “don’t have taste buds.” No wonder many people don’t even go down the aisle anymore. Isn’t it time that frozen food came out of the Ice Age? I get that improving the quality will raise the retails. But then again, I’ve found that you can only can sell poor quality once — unless you’re selling to people who accept items from the “categories” I just listed. Quality drives sales. Just look at the red box guy who is the best that frozen has. Last I looked, his sales were better than the rest. There are tons of ways to improve frozen food and bring new customers, sales and profit into this category. For me the question is when and by whom? I’m betting on Al Gore, since if he is right with global warming, then change can’t be too far off.

For more information on chicken, call Scott Miles (Wayne Farms LLC) at 800.392.0844, ext. 3060.For more information on shrimp, call Michael Rhoads (Tampa Maid Foods) at 800.462.5896, ext. 1111.

To learn more about Margaritaville Foods, visit www.margaritavillefoods.comMargaritaville is a registered trademark of Margaritaville Enterprises LLC, and is used under license.

If you’re looking to enjoy the delicious taste of the islands at your next party, tailgate or family meal, make sure Margaritaville Shrimp and Chicken are on the menu!

For more information on chicken, call Scott Miles (Wayne Farms LLC) at 800.392.0844, ext. 3060.For more information on shrimp, call Michael Rhoads (Tampa Maid Foods) at 800.462.5896, ext. 1111.

To learn more about Margaritaville Foods, visit www.margaritavillefoods.comMargaritaville is a registered trademark of Margaritaville Enterprises LLC, and is used under license.

If you’re looking to enjoy the delicious taste of the islands at your next party, tailgate or family meal, make sure Margaritaville Shrimp and Chicken are on the menu!


COVER STORY

Ahold bought Ukrop’s, then banned Girl Scouts and charities from soliciting outside stores, as they’d always been allowed to do. Was this a blunder? Or a good move for the customer?

Our pals at RetailWire.com had an online discussion about Ahold’s re-cent purchase of the iconic Ukrop’s chain of 25 stores. Ahold is folding the Richmond, Va.-based chain into its Martin’s banner, but the re-ban-nering of the stores wasn’t the real focus of the discussion. Rather, it was about how Ahold immediately began enforcing its corporate policy forbidding the Salvation Army, the Girl Scouts and such to seek support in front of the stores. Ukrop’s had always allowed it.

“Ahold has purchased a very well run, family operation in Ukrop’s. The right step for Martin’s Foods is to have a solid conversation with Bob Ukrop, gather his perspective on how the chain has handled local fundraising outside of stores over the years, and then formulate a strategy that fits those mid-Atlantic markets. A crafty Speaker of the House, Tip O’Neill once wisely

opined, “All politics is local.” Ahold would do well to LISTEN first for understanding.” Roger Saunders, Managing Director, PROSPER BUSINESS DEVELOPMENT/ BIGResearch

“I think treating each customer to a small dose of guilt as they enter your store isn’t good for the company or generally wanted by the customer. Ukrop’s — right now — is different, however. They were an integral part of the commu-nity. In fact, I can think of no other Richmond brand that stands more for the community. Richmonders are curious how well Ahold will retain the aspects of Ukrop’s that made them special and are watch-ing with a critical eye. Ahold should not tamper with community-related policies until they can transition customers. A year or two from now, ban the Girl Scouts, but right now they are giving people a reason to not like them during a time when people are forming opinions. Ter-rible move, Ahold.” ‘atdrake’

“Martin’s Food Markets are now on the defensive and facing a potential PR nightmare — for what purpose? To merely extend Ahold’s policies to each acquired banner without consideration of the impact on the target market makes little marketing let any PR sense. Acquisi-tions like this work best when the acquiring firm combines its opera-tional efficiencies with the mar-keting effectiveness of the acquired organization.” Richard George, Professor of Food Marketing, Saint Joseph’s University

“There’s nothing like buying a com-pany and then attacking its intan-gible assets. Happens all the time, never works. Let the kids sell their cookies — or start looking for new customers to replace the ones you’ll lose. This isn’t a one rule fits all situ-ation. Ukrop’s customers are used

to a certain standard of community relations and it ought to be pre-served.” Ryan Mathews, Founder, CEO, Black Monk Consulting

“Nobody likes to see the efforts of worthy charities hampered by restrictive policies. But no re-tailer wants its shoppers to have an experience just prior to a shopping trip that results in a smaller basket. In extending this policy to its re-bannered Martin’s locations, Ahold may have made the right business decision — but it’s a cold decision. James Tenser, Principal, VSN Strategies

They are not Ukrops anymore. Whether the decision is good or bad is up to the consumers to decide. They can decide with their wallets. Will they? Likely not. Few consum-ers really do make choices with their wallet that equal their words and thoughts. Will this be remembered? Maybe. But it’s likely nothing that a great sale on Coke and Pepsi won’t fix.” ‘Scanner’

“How weak kneed is the person who can’t walk by a kettle or card table? They don’t grab you and shake you for loose change. Grow up!” ‘FreezerFreak’

WILL IT HURT? Retailwire.com asked online visitors whether Martin’s ban on charitable solicitations outside its stores will help or hurt it in holding onto long-time Ukrop’s customers.

Help a lot 3% Help somewhat 13%Neither help nor hurt 25%Hurt somewhat 43%Hurt a lot 18%

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WAFFLES STILL OFF, BUT… Yeah, you know all about the Eggo shortage. But there’s light at the end of the tunnel, and handhelds are up 13.9%.

BY LEN LEWIS

Frozen breakfasts, still hamstrung by the Eggo waffle shortage, limped along with

a 4.5% dollar drop in the 12 weeks ended Feb. 21, according to data from Information Resources, Inc., the Chicago-based market research firm.

But there were several bright spots in the category (see chart). Since waffles drive the category, let’s start there. Eggo has long been at the top of this very substantial pile, and the shortage has had a big effect. Flooding at an Atlanta factory and equipment problems at a plant in Rossville, Tenn., are the root of the problem, but the good news is that the end is in sight. “There is still a shortage,” says Kris Charles, vp of global communi-cations for Kellogg Company, Battle Creek, Mich. (www.kelloggcompany.com). “We’re allocating available product to retail customers based on historical percentage of busi-ness. So it will vary by store how

much Eggo products are on freezer shelves. All Eggo bakeries are now operational. We anticipate that inventories will be restored toward the end of the year.” Of course Kellogg’s breakfast product line is diverse, so we asked Amitabh Krishan, associate director of frozen foods, for his thoughts on general trends. “The major factors driving the segment are consumer demand for more convenient food that also offers great taste and nutri-tion,” he says. “They want full-flavor options that are low in fat and cho-lesterol, but also provide positives such as protein and fiber. “Morningstar Farms veggie food net sales grew over 3% in 2009, driven in part by the successful introduction of the MorningStar Farms Hot and Spicy Sausage Pat-ties. This reflects the increasing

demand for healthy, full-flavor breakfast options as more and more consumers look to re-duce their meat consumption,” Krishan notes.

Breakfast Is UnderratedVendors agree that while breakfast may be the most important meal of the day, it

is also one of the most underrated at retail. “The category is well positioned for growth because more people are concerned about living a healthy lifestyle. But it’s not being lever-aged well enough,” says Theresa Marquez, chief marketing executive, Organic Val-ley Family Of Farms, La Farge, Wis.(www.organ-icvalley.coop). Kenni Floyd, business development manager for CCF Brands, Rogers, Ark., (www.ccfbrands.com) adds: “Our view is that the category is off from last year and the shortage of a national brand (Eggo) has hurt the entire category,” he says “I think it’s been underes-

timated and therefore harder to get breakfast items into limited freezer space unless it’s a proven seller,” notes Alicia DePatsy, marketing director, Pineland Farms Natural Meats, New Gloucester, Me. (www.wolfesneck.com). “But we’re watch-ing things closely and meeting with a lot of frozen category managers. I believe it’s going to grow in the next year or two,” she says. It’s no secret that shoppers are shifting to healthier options, DePatsy adds. “Even chains like Sub-way will have breakfast sandwiches and healthier options and the whole kid-friendly healthy breakfast is the category to watch.” Marquez agrees, noting strong performance by her company’s new pourable yogurt. Since it is made with agave instead of sugar, it ad-dresses diabetes and obesity issues. The yogurt comes in a 32-ounce container with a suggested retail of $3.99, but the company will prob-ably add a smaller size. “We’re trying to expand the idea of putting it on cereal — which a lot of consumers already do,” says Mar-quez. Organic Valley is also working on an Omega-enriched milk to be launched in May.

Proteins BoomingThe protein segment of breakfast is also booming, according to Tim Smith, director of Sara Lee’s Jimmy Dean line (www.jimmydean.com),

Downers Grove, Ill. “We’ve seen substantial

SPOTLIGHT: BREAKFAST

growth in the better-for-you cate-gory since introducing Jimmy Dean D-lights in 2007,” he says. “This line of breakfast sandwiches and bowls at under 300 calories is the brand’s

fastest-growing segment. We’ve recently expanded D-lights with a Turkey Bacon Bowl and a Whole Grain Bagel Sandwich.” However, price and convenience offered by fast-food restaurants is a tough combination to beat. For example, Burger King recently an-nounced that its menu strategy for 2010 includes a $1 breakfast meal.

Such offerings can make getting people back to supermarkets for breakfasts somewhat problematic — even in a recession, notes Can-dice Haines, business development

manager for CCF Brands. “Sonic (a fast-food restaurant) has reacted by of-fering a $1 breakfast burrito. It’s going to be tough getting budget conscious consumers to give

up the convenience of a drive-through,” she says. “There’s always going to be that push for fast food,” she says. “No matter how convenient something is at home, there’s still preparation time and the use of cooking uten-sils. Even items like breakfast bowls are not as convenient as something already wrapped up at McDonald’s.

And it’s almost impossible to com-pete at the same price.” Curtis Earls, vp of sales for CCF, agrees that competing with McDon-ald’s is tough. “It’s hard getting the sausage, egg and cheese to come out just right. But CCF has focused on succeeding in niche markets such as its soft bread stuffed with savory sausage. All the doughnut shops here have sausage rolls and we’ve been very successful bringing them into grocery stores,” Earls says.

Where to Stock?Another question is where to put breakfast items in the store. “Are customers looking in the refrigerat-ed case, the meat counter, between the yogurt and pudding or in the freezer case? One strategy may be to get consumers into an assembly line mode for breakfast by heating the bread, meats and eggs separately

‘Shoppers want full-flavor options that are low in fat and cholesterol, but also provide pos-itives such as protein and fiber.’

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as opposed to an all in one convenience item. “Maybe that would raise the quality and con-sumer expectations,” says Floyd. CCF is working on several things in this area, such as frozen egg patties for building break-fast sandwiches. At the same time, the company is capturing the indulgent segment with a chocolate cherry bagel under the Olde Hearth label. It is made with

whole grain flour and contains no high fructose corn syrup. The 14.25-ounce package has five bagels and carries a suggested retail of $1.50 to $1.88. “Breakfast will be a struggle this year. But we’re making sure we

fill the consum-ers’ needs in the frozen, refrigerated

and deli departments so retailers can pick up an extra customer, Floyd says.”

As Jimmy Dean’s Smith notes: “Across the category brands are be-ing asked to justify their shelf space. There has been a general shift in consolidation to the power brands and key players. You have to look at the space-to-sales ratio and ensure that a brand that’s getting 20% of your real estate is generating at least 20% of your revenue.” n

Len Lewis, veteran retail industry journalist and columnist, is editorial director of Lewis Communications, Inc. and author of The Trader Joe’s Adventure. He can be reached at [email protected]. Or at www.lenlewiscommunications.com

Jimmy Dean D-Lights recently added a turkey bacon bowl to its highly success-ful better-for-you line-up.

SPOTLIGHT: BREAKFAST

SALES % CHG UNITS % CHG VOLUME % CHG

TOTAL CATEGORY $335,102,784 (4.50) 124,287,712 (6.50) 99,626,544 (8.50)

WAFFLES $102,728,832 (20.00) 43,455,140 (19.00) 35,848,784 (23.70)Kellogg’s Eggo $47,835,728 (27.70) 17,476,184 (30.70) 15,287,237 (35.30)Private Label $27,809,776 10.00 14,741,464 2.50 12,493,850 2.80 Kellogg’s Nutri Grain Eggo $6,708,926 (53.50) 2,211,382 (56.60) 1,700,111 (56.60)Aunt Jemima $10,522,331 95.50 5,749,293 115.30 4,492,353 34.60 Van’s $3,847,928 19.90 1,184,138 18.40 631,885 16.90

BREAKFAST ENTREES $88,280,504 (0.10) 33,847,776 - 25,933,268 1.00 Aunt Jemima $24,376,472 13.50 11,964,944 8.20 7,520,348 16.80 Jimmy Dean Breakfast Bowls $11,604,670 12.50 4,261,920 15.30 2,138,475 15.00 Jimmy Dean $11,553,885 (10.90) 2,533,346 (19.80) 2,676,826 (6.70)Private Label $8,004,984 34.60 3,985,088 34.90 3,654,341 32.80 Krusteaz $4,493,760 8.70 1,663,698 11.80 1,661,660 10.80

BREAKFAST HANDHELD $84,195,008 13.90 21,699,962 9.90 19,183,716 12.90 Jimmy Dean $36,856,348 23.60 6,510,626 28.80 8,090,346 20.10 Jimmy Dean D Lights $8,625,784 71.70 1,414,302 77.10 1,723,830 77.50 Tennessee Pride $7,033,915 21.20 1,703,661 34.10 1,760,108 27.70 Weight Wtchrs Smrt Ones Mrnn Exp $5,540,290 (4.10) 1,987,452 (1.40) 993,726 (1.40)Hot Pockets $5,036,188 (17.70) 2,407,068 (15.50) 1,315,793 (16.30)

OTHER BREAKFAST FOOD $38,972,352 3.10 16,419,838 6.20 11,644,840 4.90 Pillsbury Toaster Strudel $34,587,904 8.60 14,816,205 11.10 10,727,780 11.30 Weight Wtchrs Smrt Ones Mrnn Exp $2,216,198 (0.40) 792,876 2.60 396,438 2.60

BAGELS $13,952,304 (13.20) 7,231,290 (14.20) 5,954,880 (11.70)Kraft Bagel Fuls $4,742,718 (20.50) 1,886,893 (22.30) 1,179,310 (22.50)Lender’s $3,933,465 (13.40) 2,398,714 (15.70) 1,811,497 (15.60)

MUFFINS $6,350,237 17.00 1,445,640 (7.60) 823,246 (25.40)Vitamuffin $3,162,293 84.70 656,787 85.00 328,394 85.00Vitamuffin Vitatops $2,158,057 200.40 462,727 200.90 231,364 200.90

EGG SUBSTITUTES $623,570 (27.80) 188,075 (24.50) 237,807 (25.30)

FROZEN BREAKFASTSSupermarket sales for the 12 weeks ended Jan. 24, 2010, according to Information Resources, Inc., the Chicago-based market research firm and caped crusaders. Percent change is versus the like period

a year ago. Data is for the brand as originally trademarked and may not include line extensions.

Today’s consumers are tuned into the advantages

of colorful frozen fruits like Wild Blueberries.

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Convenient, easy to use and just as nutritious

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FrozenWild Blueberries. Nature’s Antioxidant Superfruit!

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WBA16764_FrozBuyer_Apr.indd 1 3/24/10 4:35:08 PM

Today’s consumers are tuned into the advantages

of colorful frozen fruits like Wild Blueberries.

And thanks to recent news stories and articles in

magazines like Health, these tasty, little antioxidant-

rich berries are now more popular than ever.

Convenient, easy to use and just as nutritious

as fresh, Frozen Wild Blueberries are the “blue”

superfruit your customers will love year-round.

So get ready and make sure to have plenty of

the Wild Ones in your frozen fruit case.

FrozenWild Blueberries. Nature’s Antioxidant Superfruit!

yy

ANTIOXIDANT RICH

WILD BLUEBERRIESWILD BLUEBERRIES

wildblueberries.com

BlueThe Power of

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©201

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ocia

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SPOTLIGHT: PIZZA

PIZZA: PLENTY OF POTENTIAL Pizza sales continue to be strong, and new innovative items are hot. But some shoppers don’t even con-sider frozen product. Hmm….

BY MONA DOYLE

Frozen pizza sales may be strong, but many of today’s consumers won’t even try it —

dismissing it as “junk,” that “doesn’t taste good” and “can’t compete with the real thing.” Still others, who do use frozen pizza (but as a last resort) believe “all brands of frozen pizza taste the same.” The good news here is that the category will grow if these negative perceptions can be changed. Mary Brown, senior director of brand marketing for Schwan’s (www.the-schwanfoodcompany.com) told me that Freschetta has done research confirming that “many people had been avoiding frozen pizza because they didn’t realize that good stuff actually goes into it.” Freschetta is now trying to confront that perception di-rectly with new TV and packaging.

FIXING THE IMAGEBut it isn’t go-ing to be easy to overcome frozen pizza’s “not-the-real-thing” image. The reputation of processed food is being undermined by food critics and by product recalls, and non-users are especially hard to reach because they rarely even look at the offerings. But many compa-nies are paying attention to quality

benchmarks, and consumers are attuned to hearsay about quality ups as well as downs. I think that efforts to upgrade frozen pizza qual-ity are having some success, and that the category’s growth has been driven by im-provements in perceived quality as well as the weak economy and shoppers’ need for cheap meals. Private label growth has been espe-cially strong because it’s cheap AND because many shoppers believe that private label’s quality is improving and that they will enjoy whatever national or private label brand they bring home. And private label piz-zas are keeping up with brands in offering new flavors and even new benefits. Ric Alvarez, president and CEO of Frozen Specialties (www.frozenspecialties.com), says that “on average, Frozen Specialties’ private label offerings have less calories, sodium, and fat content versus the leading name brand competitor.” Frozen pizza retail prices can be dramatically different, both day-to-

day and brand-to-brand. I asked a shopper who was putting three packages of Ellio’s into her cart if she felt there was a big difference between frozen pizza brands. “There certainly is, but I’m buying what’s cheap right

now. My kids like Red Baron, but I don’t have a ride to Wal-Mart today and Red Baron costs twice as much here. Ellio’s is buy one, get two free today, so they are just going to have to eat Ellio’s.” Millions of consumers have

invested $6 to $85 in pizza stones, which they use in gas grills and We-bers as well as ovens, to make crusts baked at home crispier and closer to the crunchy mouth feel that comes from pizzerias. Stone adherents believe that the stones work on all kinds of frozen and “home-brewed” pizza, the kinds that that promise to rise, or the kind that promise to stay as skinny and crispy as possible.

‘HOME BREWED?’Seeing the phrase “home brewed” used to describe a home-assembled pizza suggests something seen as amusing, fun, and a little bit sneaky. (No one would describe sandwiches assembled at home as home brewed.) I wondered why pizza crusts are such a small part of the frozen pizza category, and Peter Cokinos, senior vp of sales and mar-keting at Little Lady Foods (www.littleladyfoods.com), came up with a terrific and provocative answer: “Although consumers are preparing meals at home more often than they used to, many consider “pizza night” a break away from the kitchen. Buy-ing a pizza crust in addition to the cheese and toppings can easily cost more than a fully topped pizza and requires more work for the consum-er in the kitchen.” The provocative part of his answer is that the truth he cited — that assembling your own pizza can easily cost more — is what proves to some consumers that frozen pizza is junk. “I make my own, so I know what’s in it.” Mouthwatering pictures on the

©2010 Schwan’s Consumer Brands North America, Inc.

*Source: CLT Consumer Testing, September 2009

©2010 Schwan’s Consumer Brands North America, Inc.

*Source: CLT Consumer Testing, September 2009


SPOTLIGHT: PIZZA

large-sizes packages help to dif-ferentiate brands, ingredients, and flavors and make frozen pizza fun and challenging to shop. Even the organic and gluten-free varieties look like they are going to taste deli-cious. Flavor innovations run the gamut from gourmet pesto to bar-becue, nacho, and buffalo chicken. Front-panel buzzwords hype the taste while targeting those looking for thick chewy crust as opposed to those who swear by crusts that, like women, “can’t be too thin.” The difference between thick and thin crust users is as stark for some as the difference between users of smooth versus crunchy peanut butter, but hype describes the pizzas as “fire-baked, flat-bread, crispy thin, or naturally rising.” Since I haven’t a clue what “fire-baked” means, I asked the experts whether they thought that shop-pers did understand the buzzwords or whether the marketers might be talking to each other, the way retail-ers talk to each other when the ad-vertise fruits and vegetables by their trade sizes like #10 or #4, which are meaningless to most shoppers. Peter Cokinos had what I thought

was a great answer to my buzzwords question: “Anytime a product can be better described (and make the consumer at the grocery store hungry just by reading that descrip-tion), it is exciting for the consumer and the manufacturer alike.” I still don’t know what fire-baked means, but I think Peter is right, and that retail buyers probably enjoy the buz-zwords, too.”

MORE EYE-APPEALThe large-size pizzas have much more eye-appeal than the small ones, but many of the large sizes are too large for small households,

narrow freez-ers, and toaster ovens. Toaster oven loyalists are an impor-tant and fre-quently over-looked market segment who like the fact that toaster ovens deliver the crispness of oven baking without the

cost or time of getting a big oven up to pizza temperature. Someone should experiment with more in-novative packaging for single slices of pizza, perhaps something on the order of Coke’s Fridge Packs, from which single slices could be re-

moved easily, even by kids in search of a snack. Responding to a question about where new frozen pizza competi-tion is coming from, Steve Warnert, director of sales and marketing at Amy’s Kitchen (www.amyskitchen.com), said: “There is nothing that competes head-to-head with pizza. There’s no way to lose with pizza, anytime, anywhere.” In the opposite corner, Peter Cokinos (Little Lady) said that “New frozen pizza compe-tition is coming from all different directions (but) pizza has been and will continue to be around for a long time, and new competition contin-ues to try to get even just a small slice of the pizza category share. (No pun intended!)” Although they are saying opposite things, I think they are both right. I also think the cat-egory would benefit in the long term if more front panels highlighted ingredients like the kinds of cheese, sauce, or meat. Co-branding with a respected cheese, veggie, or meat brand, e.g., “made with XYZ moz-zarella,” would move the percep-tions of those who “dis” frozen pizza because it’s not the real thing. n

Mona Doyle ([email protected]) founded and chairs The Consumer Network, Inc., a Philadel-phia research and consulting firm, and publishes The Shopper Report, a monthly monitor of consumer thinking and perceptions.

TOTAL CATEGORY $782,041,920 6.8 263,473,824 8.9 253,932,448 11.1 Di Giorno $157,129,936 24.9 29,569,628 28.3 44,387,140 24.3 Private Label $76,177,520 3.1 31,945,602 (0.2) 30,622,774 4.3 Tombstone $69,577,528 7.6 19,724,008 9.3 27,000,604 9.9 Red Baron $64,661,000 9.5 16,979,376 12.2 21,611,002 12.3 Tony’s $41,862,368 46.6 23,546,858 126.3 19,083,456 77.8 Freschetta $40,715,984 4.6 7,767,912 8.0 11,606,900 7.9 Totino’s Party Pizza $40,133,016 10.2 30,838,662 14.3 20,136,224 14.2 California Pizza Kitchen $35,600,908 (5.6) 6,784,253 (3.0) 5,344,276 7.8 Jack’s Original $31,098,464 0.6 11,728,204 6.5 12,522,035 6.9 Stouffer’s $19,615,342 (13.7) 7,017,578 (15.1) 5,300,407 (14.5)

Category sales for the 12 weeks ended Feb. 21, 2010, according to Information Resources, Inc., the Chicago-based market research firm.

Percent change is versus the like period a year ago. Data is for the brand as originally trademarked, and may not include line extensions.

FROZEN PIZZA

CATEGORY $SALES %CHG UNITSALES %CHG VOLUME %CHG


SPOTLIGHT: APPETIZERS

APPETIZERS UP IN UNITS

Value is the name of the game here. Dollars are off slightly, and results throughout the segment are uneven.

BY WARREN THAYER

We surveyed a cross-section of branded and private label manufactur-

ers of appetizers, and pretty much everyone agrees that shoppers just aren’t buying the expensive stuff anymore.

Great American When planning new private label items, retailers are becoming more adventurous and looking toward foodservice trends instead of lean-ing so heavily on syndicated data and replicating products, says Frank Benso, vp of retail and club sales, Great American Appetizers (www.appetizer.com), Nampa, Idaho. “Mac/cheese bites, and green bean fries with a wasabi/cucumber sauce are being received very well, as these are strong foodservice trends that create a point of dif-ference for progressive-thinking retailers,” he says. “Other items that are being considered include steak fingers with a BBQ sauce; and onion petals with an Aussie sauce.” “Italian, Mexican and Asian cuisines remain popular, but ‘fusion’ flavors are also appearing with the mingling of our mosaic society,” Benso points out. Packaging is becoming more user-friendly with resealable, gusset bags for larger pack sizes, he adds. He urges retailers to take advan-

tage of seasonal, holiday, or theme promotions with a strong advertis-ing campaign geared toward volume and a strong merchandising set geared toward profit. “Advertise for volume and merchandise for profit,” as he puts it.

Tony Roma’s Deerfield Beach, Fla.-based Rupari Food Services (954-480-6320), the leader in fresh ribs, is rolling out four new frozen BBQ appetizers (see our new products pages). The company, which markets the Tony Roma’s line, has aggressive plans in frozen, and expects to gain market share quickly, according to Robert Mintz, the CEO. Mintz says consumers are after attractive price points, but “Price-conscious shoppers are willing to pay a little more for quality. If you put good product in the package, it will sell.” Rupari is avoiding the temptation to reduce package sizes to achieve a lower price point, be-cause “That will hurt you eventually. The consumer is a lot smarter than people think,” he adds. Mintz is seeing a significant shift at retail toward more branded of-ferings, which he believes will help retailers more than private label knockoffs. “Private label is doing okay, but the branded side of the business is doing extremely well. Con-sumers are looking for branded products, and cases are being set up with clusters of brands.” While ethnic flavor profiles are more prevalent than before, Rupari is sticking to its core BBQ business. “We’re looking at different flavors,

but not necessarily ethnic. We’re launching sweeter flavors, and some fruit flavors that are going to play well this year,” Mintz says.

Yankee TraderAds and packaging that offer consumers serving suggestions or different ways to use the product can help generate sales, but BO-GOs are the most effective ways to move cases according to Stephanie Hernan, owner and CFO of Yankee Trader Seafood (www.yankeetrader-seafood.com), Pembroke, Mass. If you’re going to offer multiples, she says, it’s wise to make them some-thing like two for $6, or 10 for $10, so people can do the math quickly and easily and understand the value immediately. Demos can be effective, since once shoppers try and like an item they are more likely to buy, Hernan notes. But she cautions that these are really effective only when the product is new or unique. If the appetizers are seafood based — like Yankee Trader’s — it’s important to demo them near the seafood depart-ment, since not all seafood shoppers visit all parts of the store. Yankee Trader recently launched a line called Davios Spring Rolls,

which includes a Philly Cheese Steak Spring Roll, Chicken Parm Spring Roll and a Shrimp and Cojito Spring Roll.

Ruiz FoodsRuiz Foods (www.el-

monterey.com), Dinuba, Calif., long known for

its successful El Monterey line of Mexican foods, continues to have strong sales from its Tornados brand. Launched in supermarkets after sales exploded in C-stores, the


SPOTLIGHT: APPETIZERS

line includes flavors such as Chicken Club, Cheesy Pep-per Jack, Ranchero Beef and Cheese and Cheesy Pepperoni and Southwest Chicken. To support the Tornados brand, Ruiz has used national TV, Facebook, FSIs, and, of course, NASCAR. “Our sponsorship of NASCAR’s No. 39 Ryan Newman came about as we decided to pursue a national professional sports sponsorship,” says Bryce Ruiz, president and CEO. “We quickly narrowed our search to NASCAR and a Sprint Cup team. The fan base is huge, 40% women and sponsorship opportunities that allow for a variety of consumer-based promotions.” Ryan Newman’s No. 39 Torna-dos Chevy Impala premiered at the NASCAR Sprint Cup Series Las Ve-gas Motor Speedway early this year, and the campaign and exposure to date has been excellent, Ruiz says. . “The retail on-pack consumer promotion features in-pack collec-tor cards and hundreds prizes. To detail a bit, each box contains one of ten collector cards. Each card con-tains a code that can be entered at www.mytornados.com for hundreds of other prizes. The promotion is titled ‘Ticket to Ride’ because the grand prize is an exclusive racing trip of a lifetime to include hot laps with none other than Tornados Rac-ing drive Ryan Newman,” Ruiz says.

Bylada FoodsBylada Foods (www.byladafoods.com), Moonachie, N.J., recently added mini breakfast bagels for frozen snacks or breakfasts. Michael Silverman, vp of sales and market-ing, says the products meet the growing demand for savory hand-held and mini items. They come in three flavors: bacon, egg and cheese; sausage, egg and cheese; and egg and cheese. Also new from Bylada, targeting shoppers who want to eat healthy, natural foods: whole wheat, whole grain all-natural mini pizza bagels, in three flavors: 3-cheese; cheese and pepperoni; and combination. any consumers becoming more con-scious of eating all natural we feel

there is a demand for these items especially in retailers that target the natural consumer With the recession, cash-starved consumers are seeking out value-priced belly-fillers — often in larger pack sizes to get a better deal, says Bylada’s Silverman. He adds that some retailers who had been giving more space to higher-end value-added items are seeing this trend and stocking more mainstream pri-vate label items. The shift is produc-ing more volume and ROI for them, he notes. To meet increasing “green” requests from retailers, Bylada is increasing case packs to reduce cor-rugated costs, and considering use of printed films to eliminate the need for the retail box where possible. Best-in-class retailers are dedicat-ing more ad space and incremental merchandising space to private label snacks and appetizers, and promot-ing more frequently year-round, Silverman says. He’s seeing a lot

more of price protect-ing versus national

brands. Silverman believes category manage-

ment is increasingly focused on driving

private label penetration, creating differentiation and

shopper loyalty.

Kettle CuisineChelsea, Mass.-based Kettle Cuisine (www.kettlecuisine.com) recently added Three Bean Chili to its frozen lineup, according to Levon Kurkjian, vp of marketing. The 10-ounce ready-to-heat bowl is line priced with other offerings at $3.49 to $3.99. Vegan, hearty, tasty, and loaded with all-natural fiber and protein (but without high levels of fat or sodium), the soup fills a mar-ket void, he says. Kettle Cuisine’s ten soups are all-natural and certified gluten free — two attributes of growing impor-tance to many shoppers, according to Kurkjian. To grow the category, he urges retailers to dedicate more space and to use endcaps or pro-motional coffin cases to drive trial. Moderately discounted promos also drive strong increases, he says. Also productive: dedicated gluten-free frozen food or natural food sections, with branded shelf strips and door clings. n

$ SALES % CHG UNITS % CHG VOLUME % CHG

TOTAL CATEGORY $268,031,840 (0.4) 71,865,624 0.3 68,061,024 0.6 Totino’s Pizza Rolls $59,163,352 1.1 18,637,918 1.3 20,977,156 2.8TGI Friday’s $27,926,768 (6.3) 6,779,102 (11.1) 5,137,284 (8.2)Bagel Bites $20,653,540 (4.7) 5,959,384 (11.0) 4,182,541 (9.1)Private Label $19,730,764 1.4 6,070,425 (4.5) 5,375,497 (5.5)Jose Ole $17,110,716 14.5 3,679,526 21.4 4,879,053 21.9El Monterey $13,925,194 16.9 2,783,548 47.1 3,898,437 16.0Farm Rich $10,426,967 28.2 2,287,494 40.0 3,082,016 27.1Delimex $7,857,858 (8.2) 1,233,912 (12.9) 2,395,478 (11.1)Tyson Anytizers $8,920,034 7.7 1,239,783 4.0 1,845,890 14.6Poppers $7,587,336 (3.6) 1,942,563 (6.0) 1,309,454 (4.3)

APPETIZERS/SNACK ROLLSSupermarket sales of appetizers and snack rolls for the 12 weeks ended Feb. 21, 2010, according to Information Resources, Inc., the Chicago-based market research firm

and bowling club. Percent change is versus the like period a year ago. Data is for the brand as originally trademarked, and may not include line extensions.

Stir-Up aDelicious Way

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FrozDryBuyrAd 2/22/10 2:00 PM Page 1


to IncreaseSales.


to IncreaseSales.

Meal preparation has never been

easier or more delicious with our

restaurant quality entreés. Our

home-style cuts of meat flavored

with savory sauces create healthy

meals for today’s discriminating

consumer.

For more information visitwww.crazycuizine.com or call (562)802-6800.©2010 Day-Lee Foods, Inc. Santa Fe Springs, CA 90670

FrozDryBuyrAd 2/22/10 2:00 PM Page 1


SPOTLIGHT: DIPS

NO DIP IN DIPS(OR SPREADS!)‘Healthy’ trend is clear in both, with many new products rolling out.

BY WARREN THAYER & DAN RAFTERY

Dips and spreads both turned in healthy gains in the 12 weeks ended Feb. 21, accord-

ing to data from Information Resources, Inc., the Chicago-based market research firm (see chart). The gain was strongest in “Flavored Spreads” — primarily hummus — which continues its meteoric climb. And with household penetration at only 14% for hummus, there is still tremendous upside potential, says John McGuckin, exec vp of sales, Sabra, Queens, N.Y. (www.sabra.com)., He believes sales could reach $500 million in three years with 20% annual growth. After the Super Bowl, Fourth of July is the next best event for hum-mus, says McGuckin, “and Labor Day is good too.” He recommends includ-ing hummus in promotions that tar-get gatherings of people, regardless of the holiday or event.

NEW PRODUCTS DRIVE SALESNew products will continue to drive growth by attracting first-timers and offering regulars new variety. Sabra’s recent rollout of Spinach and Arti-choke Hummus will be followed soon by another still-secret flavor with proven appeal. Usage occasions are expanding, which McGuckin credits for part of the sales increase. The four-pack of two-ounce hummus is going in lunch boxes, along with carrots, celery and other fresh produce for snacks that are healthy, he says. McGuckin

believes these multi-packs add purely incremental sales. “Healthy” is the operative word here, as vendors roll out new items to meet growing consumer demand even in traditionally “less-than-healthy” categories such as dips, says Emily Alfano, senior marketing man-ager, Future Foods, Carrollton, Tex. (www.saladsofthesea.com). That’s one reason why the company’s five-item line of all-natural Greek Yogurt Dips, launched last June, is performing so well, she says. Nobody needs to tell you how well Greek yogurt is doing in the dairy case. The items offer real zip compared to basic dips, and less fat. “Basically, we have substituted traditional sour cream with Greek yogurt,” she says. It’s a delicious and healthier product, she notes, with the benefits of probi-otics additional protein and calcium. Alfano explains that while all-natural is popular, it also costs more to make and has a shorter shelf life than its traditional counterparts. For this reason, some retailers prefer to stay with traditional products with preservatives, she says. Shelf life of the Greek yogurt dips is 40-45 days, depending on the item. Salsa snack packs were rolled out in December by Fresherized Foods, Fort Worth, Tex. (www.eatwholly.com), best known for marketing Wholly Guacamole but now extend-ing its reach into other categories. The Fresherized team had seen the success of 100-calorie snack packs in other categories, and was also mindful of the obesity epidemic. It had launched guacamole snack packs — helping consumers

cut fat and calories when they used a single serving on a burger or chicken — and the salsa extension seemed like a no-brainer. Results in the market have been very positive, according to Jay Al-ley, vp of retail sales. Individual 3.65-ounce snack packs of salsa have

fewer than 50 calories, and a four-pack carries a

suggested retail of $2.99 to $3.49. Brand new from the company — set to hit the shelves in April or May — is Wholly Queso. The 14-ounce pack-ages are line-priced

with the company’s guacamole at $3.99 to $4.99. People love to

snack, and even though this item may not be

as healthy as guacamole or salsa, there’s something about creamy cheeses, veggies and spices that is hard to resist. It’s being made with more cheese than is found in competing products, and will be targeted primarily to the produce department, says Jay Alley, vp of sales at Fresherized.

YANKEES & COWBOYS On a side note, the company’s products are now the official queso, guacamole and salsa of the New York Yankees. It’s had huge success with a similar deal with the Dallas Cowboys, says Tracey Altman, vp of marketing. “Any time you can identify with a local team and a party setting where people eat together, it can be a

real sales driver,” she says. In referring to the Yankees

deal, Altman

IRI Latest 52 weeks Nov 1, 2009

SABRA HAS DRIVEN OVER 75% OFCATEGORY SALES IN THE LAST YEAR!

1 HUMMUSIN AMERICA#

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IRI Latest 52 weeks Nov 1, 2009

SABRA HAS DRIVEN OVER 75% OFCATEGORY SALES IN THE LAST YEAR!

1 HUMMUSIN AMERICA#

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SPOTLIGHT: DIPS

(who has been known to root for another team) says “It’s Jay’s way of punishing me!” Fresherized is focusing consider-able attention on health and well-ness. Added nutrients, simplicity in labeling, food safety and childhood obesity are very much on its radar.

‘WHAT’S GUACAMOLE?’“Jay and I were doing store testing in Orlando recently, and three little kids came up. We asked them if they liked guacamole, and they didn’t know what it was,” says Altman. “They use ranch dressing and ketchup, and even the parents didn’t know that salsa and guacamole are good for you, with ad-ditional vitamins and minerals.” This suggests that a little consum-er education might go a long way. To this end, Fresherized has shelf talkers that say “Less Waist, More Taste.” It is also working with marketing partners — such as Hefty, the Beef Council and local dairies — to get out its message. Altman urges retailers to pro-mote the category and give it more facings, since it is directly on trend with health and wellness. She reports working with an Arizona retailer who set up a destination category with queso, salsa and guacamole. Typically, this retailer had been going through a few hundred cases a week, but this promotion — supported with dis-plays and signage — pushed through 50,000 cases in just two weeks.

“I was scared to death he’d have a ton of shrink, but he’s the happi-est guy because he sold through all the product,” she says of the retailer. “This is an impulse product. Retailers who give it space and promote it will sell it.” This year, look for a consumer trend to “back to the basics” and “comfort,” says Mary A. Vaccaro, senior marketing manager, Sandridge Food Corp., Medina, Ohio (www.sandridge.com). “I would expect the flavor profiles in the dip and spread category to fol-low suit,” she explains. The recession has forced more people to eat out less often, and dips have long been staples at party or family gatherings, she says.

NEW TWISTSWhile French onion dip is probably the oldest and best known, many people also appreciate new twists on old favorites without breaking the bank, Vacarro points out. Examples of this new trend include dips such as Buffalo Chicken, Jalapeno-Cheese and Queso.” She adds that while dips and spreads are growing in popularity, they are impulse-driven and rarely on shopping lists. Appropriate merchan-dising can boost sales dramatically. “To get consumers to buy, you need to give them a good reason. Position-ing a dip as ‘restaurant quality’ might encourage consumers to indulge in ‘dining out’ in the comfort of their

own home, for only a few dollars,” Vacarro says. In the flavored spreads category, hummus drove gains of 16.4% in the 12-week period. “New flavors of hum-mus continue to be developed but the biggest sellers are still Original, Red Pepper, Garlic and Artichoke/Spinach,” according to Dominick Fro-cione, vp of sales, Cedar’s Mediter-ranean Foods, Bradford, Mass.(www.cedarsfoods.com). He thinks the next big push will be yogurt-based dips, of-fering an alternative to cream cheese or sour cream based products. “Salads are really becoming their own category,” he adds. “We have worked closely with some major accounts to build a Mediterranean Salad Section. Consumers are picking these salads up because they are visu-ally appealing and healthy.” Frocione says retailers would be wise to build a Mediterranean desti-nation section. “Customers hear all the media attention paid to healthy eating and lifestyles that are all part of Mediterranean, so don’t split up your category. A good Mediterranean section needs to offer: hummus, sal-ads, tzatziki, (Greek yogurt dips), and pita chips,” he says. n

Dan Raftery ([email protected]) is president of Raftery Resource Net-work and a trumpet hobbyist. Warren Thayer ([email protected]) is the notorious editor of this magazine and a part-time toreador.

FLAVORED SPREADS $72,436,980 16.4 21,425,380 19.8 13,619,720 23.6 Sabra $30,942,640 35.6 8,081,810 41.5 5,102,386 41.3 Kraft Foods $9,360,653 (17.2) 2,963,282 (21.8) 1,472,649 (19.9)Tribe Mediterranean $9,146,554 9.1 2,923,065 13.1 1,757,022 12.9 Cedar’s Mediterranean $6,295,466 (1.2) 1,795,039 (1.0) 1,324,054 (0.3)Private Label $5,285,081 59.7 2,407,152 123.9 1,911,136 121.1

DIPS $123,255,056 2.4 50,679,636 5.1 42,355,448 3.7 Private Label $29,788,724 (1.8) 12,410,075 1.8 11,033,564 (0.1)T. Marzetti $19,148,240 (2.9) 5,744,276 (1.9) 5,168,128 (1.5)Dean’s $12,091,144 5.5 6,930,980 6.0 6,075,016 5.7 Heluva Good $10,630,120 8.6 5,740,595 10.0 4,647,382 9.6 Wholly Guacamole $7,577,549 22.9 2,581,977 51.1 1,665,327 43.6

Supermarket sales for the 12 weeks ended Feb. 21, 2010, according to Information Resources, Inc., the Chicago-based market research firm.

Percent change is versus the like period a year ago. Data is for the brand as originally trademarked and may not include line extensions.

FLAVORED SPREADS & DIPS

SUB-CATEGORY $SALES %CHG UNITSALES %CHG VOLUME %CHG

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LOGISTICS

A return to normal is on the horizon, according to senior executives of some of the

industry’s leading cold warehousing and logistics companies. Cutbacks and inventory adjust-ments have been part of the reces-sionary picture, but that didn’t stop investments in technology that will help these companies be more com-petitive. Increasing efficiency and service levels have become a key part of the approach at these firms. Meanwhile, many of these executives are keeping an eye on the potential impact of new regula-tory developments in Washington. While they concede that business isn’t great, they expect improve-ment soon. They also believe that the lessons learned during lean times have been valuable. We asked a variety of questions of a virtual roundtable which included: –Jerome Scherer, vp national sales and marketing, government affairs, U.S. Cold Storage, Voorhees, N.J.; –Chuck Tippmann, president, Tippmann Group/Interstate Ware-housing, Fort Wayne, Ind.; –Don Schoenl, CEO, Nordic Cold Storage, Atlanta;

–Don McGraw, president, Colum-bia Colstor, Moses Lake, Wash.; –Peter Westermann, president and CEO, Total Logistic Control, Holland, Mich.; –Mike Henningsen, chairman and president, Henningsen Cold Storage, Hillsboro, Ore.; –Andy Janson, president, Hanson Logistics, St. Joseph, Mich.; –Drew Blum, president & CEO, Allied Frozen Storage, Buffalo, N.Y.

HOW HAS THE RECESSION IMPACTED YOUR COMPANY?

Scherer: It has been a challenging time for most food companies. High unemployment and low consumer confidence has resulted in reduced consumer spending in many areas of the economy, including frozen food sales. With the economic downturn, frozen food manufactur-ers have been rationalizing invento-ries to match lower demand. Many are holding off on new product development and production facil-ity expansion, waiting to see the direction the economy is going. As a result, there is more competition in the PRW industry as space has opened up in most markets.

Tippmann: Not unlike many com-panies, the recession has forced us to size our employee base consist-ent with our business profile and revenue. There has been tremen-dous focus on reducing waste, increasing efficiencies and asking our employees to “stretch” just a bit more on behalf of our customers. We are fortunate to have a tremen-dous workforce that has risen to the occasion on many fronts.

Schoenl: We are a regional con-solidation point for manufacturers servicing the retail and foodserv-ice providers. The total volume handled by our Atlanta Logistics Centers actually increased since 2008, but the mix is much differ-ent. As consumers moved from eating out to eating more meals in the home, our foodservice volume decreased while our retail volume surged. Customers in both markets cut inventory levels. Average order sizes shrank and the number of SKU’s increased to gain incremen-tal revenue. About a third of Nordic’s volume relates to the export of protein. The recent recession has seen manu-

Jerome Scherer, vp national sales and marketing, government affairs, U.S. Cold Storage: ‘We do have specific concerns about food safety… we are focused on helping our customers deal with product recall in the most timely and accurate way possible.’

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LOGISTICS

facturers go out of business while others idle plants or work at reduced volumes. We have seen inventory levels dramatically below 2008 levels. However, inventory levels have risen steadily since the beginning of the year as companies begin to produce more and some for-eign markets have put restrictions on imports from the United States.

McGraw: During 2009, inventory turnover declined, which caused a minor reduction in the size of our workforce. Employee turnover also dropped to about half of the rate in 2008 as jobs became increasingly scarce.

Westermann: We see a stronger emphasis from our clients for the 3PL to be a technology thought leader. There is a growing inter-est among many of our clients to outsource their WMS needs and not to re-invest capital in a WMS/TMS system. More and more clients are looking for a variable solution to sys-tem needs and are looking for 3PLs to offer a Tier 1 technology solution in a “pay-by-the-drink” format.

Henningsen: Fortunately, the food industry is less impacted, in gen-eral, than many other industries, but the foodservice segment slows when people can’t afford to eat out. Turns and inventories are generally lower, and employee awareness over career stability is heightened. There is greater access to high quality tal-ent today.

Janson: Hanson Logistics has been fortunate enough to be “riding out the storm” during the cur-

rent economic downturn. The fact that the food industry is fairly resilient to economic highs and lows, coupled with the fact that Hanson has a diverse customer base with a presence in commodities, food service, re-tail, etc., within our network of facilities. In some instances, the weak dollar has actually had a positive impact

on our business, driving exports.

Blum: Many people feel that the food industry is somewhat reces-sion-proof due to the underlying supply/demand economics. While this might be true, the desire for cost cutting can result in an in-crease in mergers and consolida-tions; hence, the risk of losing a customer increases. Additionally, customers will reduce inventory levels to barely meet their needs and scale back on forward produc-tion. Fortunately, we haven’t lost any major customers; however, we have seen a reduction in inventory from certain customers. Our focus is to deliver quality customer service at a reasonable price. If we can success-fully reduce variable costs without jeopardizing this focus, we try it.

WHAT IMPACT HAS THE RECESSION HAD ON YOUR TOP CUSTOMERS? WHAT DO YOU DO DIFFERENTLY AS A RESULT?

Scherer: Many of our customers have been impacted by tighter credit and their inability to finance their inventories. They are also experi-encing financial pressure related

to lower sales volume. They need help controlling their costs and a good way to deal with both issues is to speed up their inventory turns. This is where we have been work-ing closely with our customers to accommodate faster inventory and order flows. Cross docking, short-term storage and access to inventory and order information is the key to these programs.

Tippmann: On the warehousing side, our key customers have been very focused on inventory levels and reducing their carrying cost of inventory. In some cases, this has resulted in reduced volumes and/or alternative pricing models. In a tight credit market with reduced sales, this is a natural response. Our focus has been, and continues to be, on meeting our customers where they are. Service cannot waiver as cus-tomer service both up and down-stream in the supply chain is more critical than ever as firms compete aggressively for business.

Schoenl: There is no doubt that the supply chain became more compli-cated. With the reduced inventory

Chuck Tippmann, president, Tippmann Group/Interstate Warehousing: ‘There has been tremendous focus on reducing waste, increasing efficiencies and asking our employees to “stretch” just a bit more on behalf of our customers.’

Don Schoenl, CEO, Nordic Cold Storage: ‘As consumers moved from eating out to eating more meals in the home, our foodservice volume decreased while our retail volume surged. Customers in both markets cut inventory levels.’

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LOGISTICS

levels, most safety stocks have been eliminated. Customers are demand-ing more cross-docking and spe-cial handling, later order changes, smaller order sizes, etc. To respond, we have focused on retaining our associates and continuing to train them to be easy to do business with; to offer solutions, not explanations; and to provide customers with timely information to assist them in their planning process.

McGraw: Some of our customers have revised inventory deployment strategies to delay forward distribu-tion until demand requires move-ment. We do see higher inventories, and this will lead to a reduction in production for 2010. As a result, we continue our efforts to ensure proper product rotation and reliable out-bound loading services to prevent any downstream stock outages. As always, watching labor costs and other expenses becomes more impor-tant during these economic times. We are fortunate that our major customers have strong reputations for quality and value, which will position them well as the economy recovers. We know that those customers will continue to demand quality and value from us. Cost

containment will be even more es-sential as the government addresses healthcare and the deficit. Our location also works well for export business and we still see opportuni-ties in this market.

Henningsen: Reduced access to working capital causes heightened need for our customers to more closely manage their inventory and overall logistics costs tighter than ever. We respond by working with them to improve efficiencies and carve out costs. Part of our job/service is to try to reduce stressors inherent with their employees.

Janson: The recession has certainly not hurt our business and, in a lot of cases, it helped. More people are watching their pocketbooks and eat-ing at home. Many of our customers work with Walmart and Aldi, and it seems many shoppers have turned to Walmart for value during this current economic downturn. We work in the frozen seafood segment in a couple of our facilities and we have experienced a downturn in this segment.

WHEN DO YOU SEE THE ECONOMY RETURNING MORE TO “NORMAL?” HOW DO YOU FEEL ABOUT THE FUTURE, AND ANY NEW GROWTH OPPORTUNITIES?

Scherer: We are optimistic about the future of the frozen food indus-try. We expect to see a rebound dur-ing the last half of 2010 and a return to more normal growth for 2011 and beyond.

Tippmann: They joke that “flat” is the new normal. We are not sure if this is the case or not, but clearly it’s going to take some time to start seeing significant growth across industries. That said, on our construction side, we are already seeing more companies undertake engineering work and evaluating

projects than in 2009. Although this in itself does not translate into business, clearly the sentiment seems more encouraging.

Schoenl: This recession will pass and the economy will slowly re-cover. However, the lessons that we have learned will remain and, as a result, Nordic and the rest of the refrigerated supply chain will continue to become more efficient and effective in dealing with future challenges. I am very proud of the way our customers and associates responded since the current reces-sion began.

McGraw: It is difficult to predict what will be normal or when the economy will get there. Recent economic developments were very unsettling to consumers and dis-ruptive to product demand. Looking forward, consumers seem to be still somewhat cautious and now busi-nesses appear to be taking a similar perspective on expectations for growth.

Henningsen: Hopefully soon — early signs are already showing. It’s going to take some time for economic recovery and stability to occur. It could be a number of years

Don McGraw, president, Colum-bia Colstor: ‘We continue our efforts to ensure proper product rotation and reliable outbound loading services to prevent any downstream stock outages.’

Mike Henningsen, chairman and president, Henningsen Cold Storage: ‘Reduced access to work-ing capital causes heightened need for our customers to more closely manage their inventory and overall logistics costs tighter than ever.’

before employ-ment numbers improve. In fact, this recovery may include little or no real job growth, which is scary as peo-ple decide how to spend what money they have. That being said, the U.S. popula-tion is continuing to grow, pri-marily through immigration, and the major con-

sumption markets will continue to grow.

Janson: In my opinion, we are still 12 to 18 months away from a moderate recovery. Han-son Logistics is taking advantage of the current downturn by expanding at our Chicago loca-tion and considering expansion at two of our Michigan locations. Additionally, we are tak-ing steps to improve our energy efficiency in our existing facilities. The environment is quite competitive amongst sub-contractors and sup-pliers in this area. We are fortunate that we are in a position to capitalize on this situation.

Blum: Without government intervention, I would feel comfortable in saying the economy will start to recover soon. However, we have a government which wants to increase its role in everything we do, so how can anyone predict what the economy will look like in the future? Regionally speaking, the frozen ware-housing business is presently at equilibrium, so we don’t see any real growth opportunities. However, we are always looking to expand our relationships with existing customers and forge relationships with new customers. If this can result in a growth opportunity for us we are eager to explore it.

WHAT ARE YOUR TOP CONCERNS, INDUSTRY-WIDE? TAXES, GOVERN-MENT REGULATION, FOOD SAFETY, OTHER?

Scherer: All of the items mentioned will con-tinue to challenge the industry. We do have specific concerns about food safety and secu-

Peter Westermann, president and CEO, Total Logistic Control: ‘More and more clients are looking for a variable solution to system needs and are looking for 3PLs to offer a Tier 1 technology solution in a “pay-by-the-drink” format.’


LOGISTICS

rity. In particular, we are focused on helping our customers to properly deal with product recall in the most timely and accurate way possible.

Tippmann: There is always a concern that taxation or regulation decisions could adversely impact our industry. Right now, we all need to be extremely thoughtful about any new taxes or regulations that take the wind out of any potential turnaround. Bigger picture, we need an overall improvement in consumer and business confidence. It’s a real chicken and egg discussion. We all need consumers to start spending so businesses can start focusing on growth, improvement and expan-sion vs. mere survival. If we could string one or two quarters of mod-est growth together, the business atmosphere would thaw consider-ably and fundamentals would follow shortly thereafter.

McGraw: Our goals are to oper-ate our facilities safely, efficiently, sustainably and profitably. We are concerned about any costs and obli-gations that distract from those goals.

Henningsen: Taxes, governmental burdens and other penalties for do-ing/growing business and creating jobs in U.S. The state of Pennsylva-nia is a good example, as they are trying (again) to impose a tax on warehousing services.

Janson: All of the above (points raised in the question) plus health insurance costs for our teammates. Things are changing quickly in Washington, and it has become a full-time job just trying to keep up with those changes. I agree with some, but do not with most, but we have to be in a position to be able to adapt quickly. We are taking proac-tive steps on some of the issues, especially in the area of food safety and security.

Blum: You’ve nailed the top three (in the question), especially govern-ment regulation, which includes labor, health insurance and workers compensation. You could probably throw in utility costs as a fourth.

WHAT NEW TECHNOLO-GIES ARE YOU NOW USING, OR SEE COMING ONLINE SHORTLY THAT BRING REAL PROMISE?

Scherer: Over the past years, we have made big investments in ad-vanced warehouse technology and the integration with our logistic and information systems. We feel very good about our use of information technology and have become ex-tremely efficient in the warehouse, maximizing labor while assuring a high degree of accuracy in inventory control and order assembly. Meanwhile, our ongoing focus is on the implementation of energy ef-ficiency technology and equipment. Whether it be retrofitting to more efficient lighting, using variable speed drives on compressors, evapo-rators and condensers or resurfac-ing a roof to highly reflective white,

we know that our ability to control energy costs is critical. Solar energy technology is of great interest to us. In August of 2008 we began operating a major roof-mounted solar system at our Tulare, Calif., warehouse distribu-tion center. This is an ideal appli-cation for energy generation and sustainability. We look forward to many more such installations in the future.

Tippmann: Advancements in computer control systems have helped us more efficiently control both the freezer temperature and the engine room. We’re letting the freezer temperature control the suction pressure of the engine room, which results in significant energy savings on our utility bills. We have also spent the last couple of years designing a more efficient and cost-effective alternative to traditional blast freezing. The QFR (Quick Freeze Racking) Zone has allowed us to dramatically cut costs on labor and utilities associated with blast freezing.

Schoenl: The recession has helped us focus on becoming a better

Andy Janson, president, Hanson Logistics: ‘I still hold out hope for RFID (radio frequency identifica-tion). Once this technology gets to a cost-effective level it will have a huge benefit and impact on our business.’

Drew Blum, president and CEO, Allied Frozen Storage: ‘Without government intervention, I would feel comfortable in saying the economy will start to recover soon. However, we have a govern-ment which wants to increase its role in everything we do.’

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LOGISTICS

company. We have invested sig-nificantly in technology to help us operate more efficiently. We imple-mented the Red Prairie WMS and LMS systems to make sure that we are more efficient and effective in how we handle product within the warehouse. We now run a Lean Logistics-hosted Transportation Management System to help us manage our multi-vendor, LTL con-solidation program. In addition, we have purchased systems and equip-ment to reduce energy consumption throughout our network.

McGraw: We are working on a variety of initiatives that contribute to our ability to create value for our customers. We have implemented management programs focused to improve safety and productiv-ity. We are implementing real time monitoring of energy consumption to improve refrigeration efficiency.

We are upgrading our warehouse management software to provide more accurate and timely inventory information to our customers.

Henningsen: We are migrating to Red Prairie’s warehouse man-agement system. In addition to its full RF capabilities, it is improv-ing product trackability, trace and recall abilities, as well as labor efficiencies. From a building/facility standpoint, we continue to invest in measures that will improve our energy efficiencies both short and long term. And, we are embarking on our first installation of roof-mounted solar panels at our newest Portland, Ore., facility.

Janson: I still hold out hope for RFID (radio frequency identifica-tion). Once this technology gets to a cost-effective level it will have a huge benefit and impact on our

business, especially in the area of inventory tracking and monitoring the integrity of the cold chain.

Blum: We have a state of the art warehouse management system (WMS) which we are continually en-hancing to improve performance and deliver exactly what the customer needs. The ultimate goal is to have our WMS and our customers’ production and accounting systems interact seamlessly so everything we do on the warehouse floor updates our WMS and our customers’ sys-tems in real time with each scan. Ad-ditionally the installation of energy-saving devices, like LED lights and co-generation driven refrigeration systems, bring real promise to our industry, and we have already begun investing in these technologies. n

–Warren Thayer contributed to this article’s interviews.

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A SHEPHERD’S RETURNWould you believe that the guy who markets Chobani (which means ‘shepherd’) was a shepherd himself, as a boy in Turkey?

BY WARREN THAYER

As a boy, Hamdi Ulukaya joined his family in taking their sheep and cows up into

the mountains of Eastern Turkey every summer where the grazing was good and the weather was cooler. Hamdi didn’t mind the quasi-nomadic lifestyle of sleeping in tents for the two or three months they were away. A third generation pur-veyor of cheese and yogurt, Hamdi enjoyed the beauty around him. He dreamed of traveling to other parts of the world — perhaps the United States — but never left Turkey until after graduating from Ankara University in 1994.He’d majored in political science, and now he de-cided to pursue English as a second language — at Baruch College in New York City. “It was a sudden deci-sion I made in college,” he recalls. “I said ‘I’m going to explore.’ I didn’t know any English, and I had never been to a big city before. It was a huge culture shock, and the first days were among the worst of my life.” One cold day, Hamdi was sitting on the steps of the New York Public Library on Fifth Ave., rummaging through his pockets for another quarter so he could buy a subway

token back to his apartment. Dis-couraged, he wondered why he had been so crazy to leave Turkey and come to New York in the first place. But then, to his delight, he found a quarter. He bought his token and, once home, resolved to stay in the United States. Time passed quickly. Hamdi’s fa-ther came for a visit and told his son that the cheese made in America was terrible. He said there was a real opportunity for him to get into the dairy business. “I said ‘No. I didn’t come here to make cheese,’” Hamdi remembers saying.

After about two years in the city, he moved upstate to attend the State University of New York, near Albany. It was in many ways a world away, and one that made him feel at home once again.

While going to school, he lived on a farm, earning his rent by doing chores. By 2002, he had formed his own wholesale feta cheese company called Euphrates, after the river he’d grown up near in Turkey. The busi-ness, in Johnstown, N.Y., thrived almost immediately. Three years later, going through junk mail in his office, he came across an ad for a fully equipped cheese plant for sale. He threw it in the trash, but pulled it out 20 min-utes later. It was a former Kraft plant that would be perfect for Hamdi’s next venture: making yogurt. He’d

planned to do it at his feta cheese factory, but every-thing clicked and by 2007, Hamdi was marketing Chobani yogurt. He was joined by Mus-tafa Dogan, a yogurt master and long-time family friend he’d known back in Turkey, “to do his magic. Mustafa speaks with the cultures. In Turkey, you don’t have food scientists, you have yogurt masters,” Hamdi says. Why “Chobani?” “It means shepherd in many languages,” Hamdi explains. “It brings memo-ries of home to a lot of people, including me. When you visit shepherds up in the mountains, they can’t give you much, but what they give you comes from the heart. I see Chobani as a gift when you open the cup.” Hamdi makes his own gifts to others, as well. Chobani’s charity program donates 10% of profits to

charities worldwide. Looking back, he says “I’d never have thought that all these years later, thousands of miles away, I’d be doing the same thing my family always did.” n

Hamdi Ulukaya, the CEO and founder of the company that markets Chobani Yogurt, on the set of Fox Business News, where he was interviewed about entrepreneurship in February.

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