business news in context, analysis with attitude

Got the following email from MNB reader Steve Zimmerman:

I was hoping to give you some insight from an independent grocer. You talk a lot about finding ways to be "different", for which I agree, is a must in this heated grocery market. Everyone, for the most part, is grasping for anything that will give them an edge and increase sales.

I am Director of Natural and Organic Foods at our local IGA store, as well as heavily involved in our conventional grocery and frozen departments. As the data shows, growth in the conventional grocery market is very slow, virtually flat, whereas organic grocery sales have had healthy growth every year for the past 15 years. We are located in Northeast Ohio, and we see the same changes in our market as the bigger city markets. Our market sees the same trend. We work very hard to carry products that people need, want, and have never heard of. We encourage the customer to "discover" new things, which has paid off tremendously in sales of specialty and organics.

The main problem we run into is our wholesaler, who is so far behind the current trends. And it isn't just our wholesaler, its others as well. When I came on board with IGA, the goal was to get other vendors as a source of products that would help differentiate us. We began working with KeHE, UNFI, and some other local distributors to fill in the gaps. After a few years, KeHE has become a solid partner with us and made improvements in how quickly they adapt their product assortment to match consumer trends. Even with all the improvements made, they are still behind. And as for UNFI, they are far worse on all levels after they acquired Supervalu. Lots of out-of-stocks, mis-picks, and wholesale pricing that is too high.  The main value for us regarding UNFI is some exclusive product lines we can’t get anywhere else, that's it.

The way we do business has changed a lot this year, as a way to be more competitive and get ahead of the trends. When the Keto Diet trend took social media by storm late last year, not a single one of our suppliers was ready for it. It was extremely frustrating and challenging. I started researching new, emerging brands and contacted them directly. They all agreed to do business directly, therefor cutting out the wholesaler and specialty vendors. A perfect example of this is Rebel Creamery, a Keto-specific ice cream that was first-to-market. A couple of e-mail exchanges and we had a wholesale account set up and could order cases of ice cream for next-day delivery using dry ice. First order was received and stocked on the shelf on January 28th, 2019. To date, we have sold just over 900 pints and were, at one point, the only store listed on there product locator in the entire State of Ohio to have it (now there are two of us). We had calls from people who live in Cleveland and Columbus, interested in buying it and checking our inventory on it before making the long 60 mile-drive to the store. As of late April, KeHE starting carrying this line, but not UNFI. Since buying ice cream direct, we have done this with other low-carb, keto-friendly items that are doing very well, and are still not available to us via normal wholesale channels. All of this has given our frozen foods department a lift, and therefor the store.

If we wait around and assume our wholesaler is going to take care of us, we are sadly mistaken. It seems like they acknowledge the trends, but have a hard time separating themselves from the old-school ways of doing business. They still want us to promote the same items in our ad plans, even though movement of these items has slowed significantly (think Manwich, Folgers Coffee, Domino Sugar, canned veggies, and even pop). If you are an independent grocery operator, you must look outside the normal channels to keep pace, or no pace in the future will be enough to catch up. This goes for technology and product assortment. You will absolutely get left behind. Customers will notice your relevance to them has changed, and they will change their shopping habits. No question about it. 

I will be visiting Eataly, Amazon Go and Mariano’s in Chicago in June. All of your articles and writings about these companies has me excited to visit them!

Enjoy. I hope you’ll report back about what you learn.

On a different subject, from MNB reader Richard Lowe:

We have a brand new Lidl store here in Lilbur, GA about 1 mi away from home and the 2nd closest grocery store. They have struck out with us. Still prefer Aldi and Publix with Kroger 3rd.

The checkout operation is not as seamless as Aldi. They ram stuff through so the person behind you ends up on top of you.

The meat is tough and terrible

Ambience in Aldi’e feels better.

Went in one morning early to buy baked goods marked at .45 ea. and check said they were .99 ea. The employee made me walk over and show her. Made me wait while she removed the sign. Then still wanted to charge me .99. She had no authority to charge the lower price. I asked for a manager. Had to wait for him to come from the back and then he gave me the 3rd degree, before finally caving in. Wasted 15 minutes with all the shenanigans. Should have given me the product for free for calling out the pricing problem!

They also inundate us with ads and fliers.

Doesn’t sound optimal to me. Lidl has lots of money and patience … we’ll see if it has the capacity to learn and improve.

Regarding a new Kroger initiative, MNB reader Howard Harris wrote:

I love that Kroger is leading on Circular Packaging. I worked for Kroger (Nashville KMA) in high school in the 1970s and many of the things we drank were packed in glass or cans. I collected bottles for change many times. The Purity milk man came to our home twice a week and brought milk, butter, OJ and picked up the empties to reuse.

Ahh, the good ole days may just be coming back if only a small portion that makes complete sense.

From another reader:

Are we going back to the future?  This sounds just like the milkman!

And another:
What goes around….
We didn’t have fancified terms like “Circular Packaging” but we did deliver milk in glass bottles to customers, who, when empty, placed them back on the porch for us retrieve, return to the plant, wash, refill, and of course deliver again.

Responding to Kate McMahon’s piece about the suddenly controversial Aperol Spritz, MNB reader Phil Censky wrote:

I really enjoyed your piece about the Aperol Spritz debate.

Count me in the pro-spritz camp as well. I can’t imagine consuming anything else on a hot Roman summer afternoon (pick a piazza, any piazza).
One positive thing from the backlash on Twitter was it introduced me to a classic cocktail I’d never heard of, the Paper Plane. It’s fantastic.

1.    1½ ounces amaro (preferably Nonino)
2.    1½ ounces Aperol.
3.    1½ ounces bourbon.
4.    1½ ounces fresh lemon juice

And from another reader:

Eh... what we should REALLY be talking about is why this bottle (of Aperol) is $20 here and $3 in Italy! Who shells out this kind of cash for juice!?!!
KC's View: