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News & Notes BRIEFS GOURMET NEWS DECEMBER 2018 www.gourmetnews.com NEWS & NOTES 6 Meeting the Challenges of Today's Grocery Retailing BY LORRIE BAUMANN Today's grocers are faced with challenges on multiple fronts, from competition with deep discounters to online retailing, but the way for a brick-and-mortar grocer to suc- ceed is by continuing to focus on the cus- tomer and what that shopper cares most about, according to Fred Morganthall, who was president of Harris Teeter between 1997 and 2017 and who has also been an executive vice president at Kroger. He spoke in Rosemont, Illinois, on Monday, November 12, at the Private Label Manu- facturers Association's annual trade show. Online grocery is a very serious chal- lenge to brick-and-mortar retailers, as are deep discounters represented by Lidl and ALDI, Morganthall said. "They [the deep discounters] have grown slowly and me- thodically, and they've gotten very good at it," he said. On top of that, there's the challenge rep- resented by Americans' growing tendency to cook less often. "Food prepared outside of home now represents 51 percent of stomach," he said. "Brick and mortar is going to adjust but everyone who's in the brick and mortar business today may not be here in 10 years.... What we do is what the customer wants. If we listen to cus- tomers, we can be ahead of this situation." What drives customers to a store today is much as it has always been, ever since grocery shopping happened in two-aisle stores where the shopkeeper took the cus- tomer's list, selected the items and handed them to the customers over the counter, Morganthall said. "What drives customers to shop today is great value or price," he said. "That hasn't changed." Convenience is second on the list of drivers to a particu- lar store, and that can mean either location or ease of shopping, he said. "Third is clean. Last is selection," he said. "Those are the four key areas where customers focus, and they've focused that way for a long time." It's convenience that drives customers into the online marketplace, and grocers need to be sure that they recognize that and work to make it easier for their customers to do business with them online, he said. "Online is the future," he said. "One of the top reasons why customers shop online is that it's darn convenient.... It's a huge part of our business, and it's not going to go away." To meet the challenge presented by deep discounters such as Lidl and ALDI, grocers need to ensure that the quality of their pri- vate label offerings can meet or exceed the quality offered by national brands, which have not done the best job of improving quality to meet the expectations of con- sumers. Lidl and ALDI, however, are put- ting own-brands products on their shelves that do match the quality expectations of their shoppers, he said. "It is amazing the quality that ALDI represents today," he said. "Many national brands have allowed ALDI and Lidl quality to surpass them." Consumer desire for prepared food is another disruptor that gro- cers are going to have to be pre- pared to meet, particularly if they're going to keep their Millen- nial-generation customers, who are working 50 to 60 hours a week, Morganthall said. "They don't have time to cook during the week; they just don't," he said. "During the week, they need their food prepared." Millennials are likely to do their grocery shopping on weekends, and when they do come to the store, they want a broad selection, accord- ing to Morganthall. "We've got to be in stock. Out-of-stocks are rampant in stores today," he said. "If we're not in stock, we force the customer someplace else, and my biggest fear is that we force them to Amazon. We ought to be 98 per- cent in stock – it's doable. If you're a tra- ditional grocery store, the first thing I would get right is in-stock." On the trade show floor, manufacturers were offering a wide variety of products de- signed to help grocers meet the needs out- lined by Morganthall during his keynote address, including customers' desires for food they can put on their tables quickly after a long day at work. Those included the stuffed seafood products offered by En- core Seafoods and meal kits from Chef 's Menu, which offers kits for all-natural, gluten-free meals with no preservatives that home cooks can prepare in 15 minutes in one pan with no prep. Encore Seafoods Stuffed Salmon, Stuffed Sole Monterey and Tilapia with Crab Meat Stuffing come in individual servings packed in vacuum-sealed packages and in dual serving-packages that are ready to be thawed by the grocer and set out in the re- frigerated seafood case. The 6-ounce and 8- ounce portions are designed to cook in a toaster oven for 15 to 20 minutes, and they're reasonably foolproof for anyone who can read the English-language instruc- tions printed on the packages. They're offered by Encore Seafoods, which is run by partners who started as Sonoma Seafoods 28 years ago, sold that business a few years ago and then started Encore about four years ago. The stuffed seafood products have a nine-month shelf life for the vacuum packs and eight days in the grocer's fresh seafood case for the thawed products. Chef's Menu offers a range of 20 different meal kits, all of which can be prepared in one saute pan in 15 minutes. Each kit in- cludes a protein, a sauce and vegetables prepared for the microwave oven, with menus that include Bourbon Peppercorn Steak Tips, Thai Coconut Chicken, Chicken Marsala, Chicken Tikka Masala and Apple-Glazed Pork Chops. The com- pany is based in Modesto, California, and the meal kits are assembled in northern California in packages that are largely recy- clable materials. Shelf life in the grocer's re- frigerated case is 14 days, and the kits retail for $14.99 to $15.99 for a kit that serves two. The retailers who survive the industry consolidation that's on its way will be those who can make their store an enter- taining place to be and who can deliver on value, conven- ience and customer service, with associ- ates who speak to cus- tomers while they're in the store and then keep the lines short at check-out time. "The customer wants that check-out expe- rience to be one minute or less from the time they enter the line to the time that the transaction begins," Morganthall said. "Re- tailers that are doing well aren't being hurt by deep discounters. If you're following the customer and meeting their needs, you'll do fine." GN Shenandoah Growers Awarded for Top Product Promotion Shenandoah Growers, Inc. (SGI), the leading grower and marketer of certified organic fresh herbs for retail in the U.S., received the 2018 Best Overall Product Promotion award from the Produce Manufacturing Association (PMA). SGI was recognized at the annual PMA Fresh Summit Convention & Expo in Orlando, Florida, for its "Behold the Future of Food" product display, a testament to the brand's marketing innovation and eye-catching branding. Healthy Times Pays Tribute to Legacy with New Packaging Healthy Times, a premium, verified non-GMO, organic nutrition brand for babies and toddlers, announced refreshed packaging, including the addition of the Feed the Children logo to solidify the brand's commitment to its non-profit partner, grounding the brand in goodness all around. Healthy Times has donated product to Feed the Children for over six years, and in 2018 alone, Healthy Times donated a quantity of product valued at approximately $150,000 to the organization. In addition to continued product donation and support of Feed the Children's community events, Healthy Times is extending its mission to deliver health and happiness with an added monetary contribution of $25,000. Healthy Times and Feed the Children will also engage in a collaborative marketing campaign to educate the public about childhood hunger challenges and raise awareness for the cause. Greenleaf Foods Launched to Lead Plant-based Sector Greenleaf Foods, SPC has announced its launch as a food company dedicated to cultivating and advancing leadership in the fast-growing plant- based food sector. Supporting its category- leading brands, Field Roast Grain Meat Co. and Lightlife Foods, Greenleaf plans to build a robust portfolio of brands and products to offer consumers more plant-based food choices. Greenleaf will operate as a wholly-owned, independent subsidiary of Maple Leaf Foods, and as such, will be guided by a deep commitment to social purpose, sustainability and the progress of the plant-based foods sector. Consumers to Spend 4.1 Percent More Than Last Year During Winter Holidays Consumers say they will spend an average of $1,007.24 during the holiday season this year, up 4.1 percent from the $967.13 they said they would spend last year, according to the annual survey just released by the National Retail Federation and Prosper Insights & Analytics. Consumers will spend in three main categories during the holidays – gifts, at $637.67; non-gift holiday items such as food, decorations, flowers and greeting cards, at $215.04; and other non-gift purchases that take advantage of the deals and promotions throughout the season, at $154.53.

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