March 27, 2013

 IGA Global Rally Perspective

Exploring the Drivers of Change

A Message to the Alliance from...
Keith Anderson
VP Strategic Advisory
RetailNet Group LLC

The IGA Global Rally in Chicago is just around the corner; look to The Independent View in the coming weeks to learn more about the speakers in the Global Rally lineup. Today, Keith Anderson elaborates on his session, which examines how economic and societal drivers of change will fundamentally alter the future retail landscape.

Looking out to 2020, there will be a very different retail landscape, one that will develop and evolve market by market, perhaps in deeply contrasting ways.

And here's the really impactful news: The evolution has already begun.

RetailNet Group LLC (RNG) visits and researches markets across the globe and recently we are seeing retailers make significant changes to their stores, in particular moving away from traditional food merchandising. As retailers prepare for 2020, they are looking to win and stay ahead of trends such as to-go-foods, global palates, healthy living and much more. And with new players coming to an already saturated competitive field, it is even more important to stay ahead of the future.

At the IGA Global Rally RNG will analyze the drivers of change with the STEIP framework, which involves using five different general trend categories: Societal, Technologic, Economic, Industry and Political. By looking at these drivers, we can not only see how consumer behavior will change and how the retail landscape will evolve but just as importantly, what the expected competitive responses will be. From there, it's an easy step to determine the growth platforms that will put you in a position to win in this future retail landscape.

I look forward to bringing the future to the present with you!


Keith Anderson


Retail News

Walmart will start using its stores to get internet orders to customers faster as the company faces growing competition for quick delivery of physical goods from online retailers like Amazon. The company will soon test having lockers to hold goods ordered on the internet in stores until shoppers pick them up. It is also doubling the number of stores that can fill orders placed online, an attempt to match the reach of Amazon's distribution network, reported Reuters. Full Story

Meanwhile, American Express and Walmart's Bluebird debit and checking alternative are now be eligible for FDIC insurance, and will have the ability to receive direct deposit of government payments, such as social security payments, military pay, and tax refunds. Full Story

New Store News: 7-Eleven is growing in the Cleveland area with rebranding of convenience stores in Cuyahoga and Lorain counties as part of a 19-store lease from Lehigh Gas Partners, based in Allentown, Pa. The effective date of the leases will vary, but all leases are expected to be in place by March 31. Lehigh Gas Partners will retain ownership of the 19 sites and will continue to provide wholesale distribution of motor fuels to each site. Full Story

Manufacturer News

Sales of frozen entrees declined 2% in 2012 to $9.2 billion, according to SymphonyIRI Group. In terms of the technology, "there's been very little innovation," states Randy Friedlander, vice president of client services at WD Partners, a Dublin, OH, food and retail consulting firm. A number of companies are trying to reimagine the frozen entree as a simpler, healthier and better-tasting experience. FreshDirect is selling its own Smart & Simple line of frozen meals featuring dishes like Artichoke and Ricotta Ravioli, and Balsamic Vegetable Couscous. The line offers innovation not only in ingredients but also in packaging, states it senior vice president of merchandising. A special bowl enables "pressure steaming" in the microwave, with no need to stir midway through heating, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

Meanwhile, Austin Packaging Co. plans to eliminate its frozen pizza manufacturing business, according to The Associated Press. The company claimed the move comes after a year and a half of decline in the frozen pizza industry as customer demand went down. Frozen pizza accounts for about half of its business, reported Full Story

Hillshire Brands CEO Sean Connolly hopes to spur growth at the packaged-meat producer with sandwiches and snacks aimed at consumers seeking greater convenience and healthier fare. The company has exceeded Wall Street profit expectations twice since Mr. Connolly's arrival, earning $58 million in the most recent quarter, up from $10 million for the Hillshire Brands businesses a year earlier. The CEO credits the strength of the company's brands, and will increase marketing and ad spending to more than $215 million annually by 2015, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

Kameda USA acquired 77.8% of Mary's Gone Crackers, the makers of organic, vegan and gluten free foods offered nationally in grocery and natural food stores including Whole Foods Market, Kroger and Sprouts. Kameda USA is a subsidiary of Kameda Seika, Japan's largest manufacturer of rice crackers. Full Story

Pinnacle Foods could file an IPO this year, according to speculation by CNBC's Jim Cramer. The company's potential IPO filing is supported by the success of past 2013 IPO's, and because Pinnacle has "a big frozen food business" and grocery business, the analyst claimed, and is "getting out of lower-margin businesses and they've cut costs." Comparing metrics to rival B&G, Jim Cramer thinks "$30 is a pretty reasonable target" for the offering, reported CNBC. Full Story

PepsiCo's Frito-Lay is about to put Taco Bell's Doritos Locos Tacos in a bag. Doritos announced the product on Twitter, which includes bag shots of Nacho Cheese and Cool Ranch flavors, reported Advertising Age. Full Story (Paid Subscription Required)

Food companies are placing more "protein" labels on foods and adding the macronutrient to drinks, bars and cereals to attract consumers. "It's one of those rare things that has a lot of different meanings to a lot of different people and they are all positive," stated Barry Calpino, VP of breakthrough innovation for Kraft Foods. Companies see increased attention on protein as part of a larger trend of consumers increasingly considering their health when choosing foods, and is not "a faddish type thing," according to Mr. Calpino, reported The Wall Street Journal. Full Story (WSJ Subscription Required

Mojo Organics signed a distribution agreement with Wholesome Choice to distribute Mojo's Chiquita Tropicals line of premium fruit juices. Wholesome Choice is a wholly-owned subsidiary of AKR Corp. In the U.S., AKR has established seven major strategic distribution centers throughout the country. Full Story

New Product News: Hillshire Brands introduced Ball Park Lean Franks, available in Lean Beef and Lean Pork varieties. Full Story... Annie's introduced Annie's Cheddar Squares. Full Story... Reser's is introducing its American Classics Bacon Ranch Pasta Salad in available in 16-oz. and 3-lb. containers. Full Story

Foodservice News

Restaurant Roundup: Denny's signed a lease to open its first New York City outpost in a 23-story luxury condo building Downtown, and will serve wine and beer, reported Full Story... Burger 21 signed two new multiunit franchise agreements in Florida. Seven new restaurants will be developed over the next several years in the Fort Myers - Naples corridor, Fort Lauderdale, Coral Springs, Davie and Pembroke Pines. Full Story

Health News

Eating a breakfast rich in protein significantly improves appetite control and reduces unhealthy snacking in the evening, according to a study published in The American Journal of Clinical Nutrition. It is the first time the impact of breakfast consumption on daily appetite and evening snacking has been studied. The consumption of the high-protein breakfast led to increased fullness or "satiety" along with reductions in brain activity that is responsible for controlling food cravings, reported Science Daily. Full Story

Eating tofu and other soy foods may help women who develop lung cancer increase their odds of living longer, according to a study of women in Shanghai published in the Journal of Clinical Oncology, reported Health Day. Full Story

Washington News

The proposed ban on polystyrene foam packaging could cost nearly $100 million a year and might not reduce as much waste as originally thought, according to a study conducted by MB Public Affairs on behalf of the American Chemistry Council. The study found replacing polystyrene food and drink containers with the lowest-priced alternative containers would cost approximately $91.3 million per year. Restaurants and other small businesses could experience increased costs of about $57 million if the ban is enacted, reported the National Restaurant Assocation. Full Story

Beef jerky maker Jack Link's has gone to federal court in Minnesota in an attempt to stop the distribution and sale of counterfeit coupons that claim to offer the jerky for free. In a lawsuit filed earlier this month, attorneys for Jack Link's are seeking permanent injunctions against up to 100 individuals or parties who are allegedly selling bogus coupons to consumers to redeem at retail outlets where the jerky is sold, reported Minneapolis Star Tribune. Full Story

A proposal to sell wine in refillable "growlers" was approved in an Oregon Senate panel, sending it to the Senate for a final vote. Passage is likely. Within weeks, it's possible that Oregon wine enthusiasts will be able to bring refillable containers to stores and restaurants and bring home up to two gallons of their favorite vintage, reported Full Story

Food trucks could be allowed to park and serve food at some Boulder, CO parks during a 12-week period this summer as part of a new city pilot program. Under the Mobile Food Vehicle Pilot Program for Parks, food trucks would be allowed to periodically operate at six Boulder parks from June 2 through Aug. 25, reported The Denver Post. Full Story

Baristas Coffee Company filed its UFOC Disclosure Documents, Operations Manual, Franchise Agreements, Financials, and all required support documentation to become registered to sell franchises in the state of California. This filing is subsequent to the filing to become registered in Baristas' home state of Washington and once approved will not only allow the company to sell franchises in California but will open up the ability to become approved in other states that require registration, too. Full Story

USDA cited Delta Fresh Fruit for failure to pay for produce in violation of the Perishable Agricultural Commodities Act. The company failed to pay $338,659 to seven sellers for 49 lots of produce. Full Story

USDA cited Freshco Foodservice for failure to pay for produce in violation of the Perishable Agricultural Commodities Act. The company failed to pay $288,371 to eight sellers for 58 lots of produce. Full Story

USDA submitted an information collection requirement to OMB for the Dairy Export Incentive Program (DEIP), which intends to expand U.S. agricultural exports by paying cash to exporters as bonuses to allow them to sell U.S. agricultural products in targeted countries at competitive prices. The Foreign Agricultural Service collects information from participating U.S. exporters in order to determine the exporters' eligibility for the DEIP program benefits, and for the Commodity Credit Corporation to manage and account for government resources. Full Notice

EPA is announcing the availability of a document, "Enhancing Stakeholder Input in the Pesticide Registration Review and ESA Consultation Processes and Development of Economically and Technologically Feasible Reasonable and Prudent Alternatives." The document describes changes to EPA's pesticide registration review program and how it conducts consultation with the Marine/Fish and Wildlife Services under section 7 of the Endangered Species Act (ESA). The document also describes the process by which public comments received on RPAs will be summarized and organized by EPA and provided to the Services. Full Notice

FDA submitted an extension for a proposed collection of information concerning the registration of food facilities under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. Information FDA requires on the registration form includes the name and full address of the facility; emergency contact information; all trade names the facility uses; applicable food product categories; and a certification statement that includes the name of the individual authorized to submit the registration form. Comments on the collection will be considered if accepted by April 26. Full Notice

Publix Super Markets is issuing a voluntary recall for Publix Deli Tri Fruit and Grain Salad in 12-oz. packages because of possible contamination with Listeria monocytogenes. Publix received notification of the potential contamination from its supplier, Allison's Gourmet Kitchens. Publix Deli Tri Fruit and Grain Salad was distributed in Alabama, Florida, Georgia, South Carolina and Tennessee. Full Story

Global News

Danish authorities discovered traces of pork in some meat sold as beef for kebabs during an inspection triggered by the recent horsemeat scandal, prompting demands by the country's Muslim community for stricter inspection, reported Reuters. Full Story

A planned free trade agreement between the EU and U.S. should not completely liberalize agricultural trade, the president of the association of German farmers' association DBV told Reuters. Brussels and Washington hope to start negotiations in June on a transatlantic free-trade agreement, which would encompass almost half the world's economy, and are seeking as broad a deal as possible to deliver strong economic growth. Full Story

Market News

USDA announced no marketing quota will be in effect for the 2014 wheat crop, a declaration required by current circumstances. The Food, Conservation, and Energy Act of 2008 authorized commodity crop programs for the 2008 through 2012 crop years with the American Taxpayer Relief Act of 2012 providing a one-year temporary extension for the 2013 crop year. Unless superseded by new farm legislation, any actions taken by USDA pertaining to the 2014 wheat crop must be done in accordance with the Agricultural Adjustment Act of 1938, as amended (the 1938 Act), and the Agricultural Act of 1949, as amended. Full Story

Red Gold recently invested in upgrades to the high-speed salsa and pasta sauce bottling line at its Geneva, IN facility, according to a company blog post. However, large sums have also been spent on facilities in Elwood and Orestes, IN, stated new media manager Colt Reichart. The company has a large market share in the relatively flat canned tomatoes and ketchup categories, but is growing in the salsa and pasta sauce segments, where there has been a lot more activity lately. Full Story

The Southern regions of Chile are beginning to wind down with only two weeks or so remaining the blueberry harvest. It is being predicted that remaining volumes will be low, as the exported volume of fruit fell below 1,000 tons last week for the first time this season and that the entire season will be over within the first week of April, reported Fresh Plaza. Full Story

Fresh potato exports from Colorado were approved in Taiwan. The Taiwan Ministry of Agriculture approved the measure to accept Colorado potatoes, despite tight inventories for the 2012 crop. The market for U.S. fresh potatoes is valued at $5.1 million for 10,600 metric tons in the country, reported The Packer Online. Full Story

Australian farmers in Victoria's Goulburn Valley experienced such a bumper crop of clingstone peaches, that it is going to waste due to lack of market demand. A food box delivery company, Aussie Farmers Direct plans to 'rescue' tons of peaches by creating a new consumer market for the surplus fruit, reported Australian Food News. Full Story

The future of U.S. agriculture is in an increasingly strong economic position, according to speakers at the California Young Farmers and Ranchers conference. The next generation of agriculturalists were provided upbeat assessments on professional and business opportunities, but also outlined challenges facing agriculture in the state, reported Ag Alert. Full Story


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