2017Issue6_Alabama_v9.indd

Alabama

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A L A B A M A G R O C E R S A S S O C I A T I O N

Finding growth in challenging Times

Doing More Than Expected

hat You Need, hen You Need It, or the Lowest Cost! W W F Fill Rate–97.5% On Time Deliveries–97.8% Willing To Compare

Associated Grocers of the South, Inc.

For More Detailed Information Please Contact: Billy Leverett Vice President Of Sales 205-808-4821

www.agsouth.com

3600 Vanderbilt Rd., P.O. Box 11044, Birmingham, AL 35202

CONTENTS | ISSUE

6

FEATURES

COLUMNS President’s Message Standing Strong in an Ever-Changing Environment . . . . . . . . . . . . . . . . . . . . . . . . 6 Chairman’s Message A Time To Be Thankful . . . . . . . . . . . . . . . 8 Government Relations 2018 Legislative Forecast . . . . . . . . . . . . . . 10 Viewpoint Turn, Turn, Turn . . . . . . . . . . . . . . . . . . . . 18 Inside the Beltway Successes and Opportunities . . . . . . . . . . . 20 Washington Report Time for Washington to Deliver Solutions . . . . . . . . . . . . . . . . . . . . 22 Mommy Blogger The Family Business . . . . . . . . . . . . . . . . . 39

26 Finding Growth in Challenging Times

There is a systemic change happening in today’s retail landscape that is effecting where, how and why consumers are shopping. This historic shift is making growth for retailers and Fast Moving Consumer Goods (FMCG) manufacturers seem elusive. But there are answers.

34 Are You Leaving Profits in the Basket? A founder and Chief Operating Officer of My Cloud Grocer shares his 10 best secrets to increase basket size week after week.

DEPARTMENTS AGA News . . . . . . . . . . . . . . . . . . . . . . . . . 12 Outside the Box New Retail Perspectives . . . . . . . . . . . . . . 24 15 Minutes With… Sekou Andrews . . . . . . . . . . . . . . . . . . . . . 31

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The Silver Bullet With a vast array of shrink-reducing solutions available in the marketplace, choosing the best solution in which to invest can be an extremely daunting task. The answer may lie in modifying behavior.

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ALABAMA GROCER |

AGA | BOARD OF DIRECTORS

Sergeant-at-Arms James Cochran Buffalo Rock Pepsi Cola Company

Treasurer Jay Mitchell Mitchell Grocery Corporation Secretary Bo Taylor Coca-Cola Bottling Company United, Inc.

Immediate Past Chairman Peter "Greg" Gregerson Gregerson's Foods Past Chairman Jack Howell Forster & Howell

Chairman of the Board Frank D'Amico, III

executive committee

BTC Wholesale Vice Chairman Johnny Collins Dean Foods

vice presidents David Bullard

Wade Payne Food Giant

Bill Davis A&R Super Markets

Bob Crawford United Johnson Brothers of Alabama

Piggly Wiggly Alabama Distributing Company

Harold Garrett Gateway Foods

directors Naseem Ajlouny

Austin Peake Peake & Associates Eddy Quinley Advantage Solutions

Kris Jonczyk Publix Super Markets, Inc. Kenneth Jones Rouses Enterprises, LLC.

Mike Coggins Sherwood Food Distributors John Fargason Acosta Sales & Marketing Mark Gallivan Alliance Sales & Marketing Robert Gamble Bunzl Distribution Julie Anderson Goolsby The Hershey Company

Buy Lo Quality Foods Stan Alexander Associated Grocers of the South Danny Babb Associated Wholesale Grocers Jack Carlile SuperValu Kirk Clark Mitchell Grocery Corporation

Dana Weldon Dutch Farms John Wilson Super Foods Supermarkets Jimmy Wright Wright's Markets

Melanie LeBlanc Anheuser-Busch Curtis Lyons, Jr. Flowers Bakeries Mike Oakley Alabama Power

ex-officio board members

Mike Fuller Fuller's Supermarket

Mac Otts Autry Greer & Sons

James Scott Lighting Specialists

R. Kevin Miller "Official Board Photographer" Acosta Sales & Marketing

Darwin Metcalf Western Markets

Secretary/Treasurer Paul Burnett Byars | Wright

President Ellie Smotherman Taylor Alabama Grocers Association

Vice Chairman Phillip Davis A&R Supermarkets

Board of Trustees Chairman

Bob Crawford United Johnson Brothers of Alabama

Cliff Thomas Snyder's Lance Chris Woods Truno, Retail Technology Solutions

Ken Hestley Sell Ethics Don Richardson Coca-Cola Bottling Company

Larry Garrett Vietti/Southgate Foods Kevin Gillespie Acosta Sales & Marketing Chip Harden Bank of America

Gerry D'Alessandro Fourth Avenue Supermarkets Chris Crosby UTZ/Golden Flake Jimmy Freeman Freeman's Shur Valu

United, Inc. Brian Smith Community Coffee

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PRESIDENT’ S MESSAGE

S tand i ng S t r ong i n an E v e r - chang i ng E nv i r ONme n t

ELLIE SMOTHERMAN TAYLOR PRESIDENT ALABAMA GROCERS ASSOCIATION

WHILE SOME STATE GROCERY ASSOCIATIONS ARE MERGING WITH RELATED ORGANIZATIONS IT'S IMPORTANT WE ALL CONTINUE TO WORK TOGETHER AS ONE VOICE.

suppliers are retaining their membership only in GMA, but not the state food association. This does two things. First, it dilutes support for addressing the growing list of food-specific issues in the state, making the food industry vulnerable. It also raises the chance of an industry split on important issues like alcohol sales if multiple companies have individual state lobbyists, but not an association working to achieve consensus. Nothing is more disconcerting, than an industry split on controversial issues. The challenge to the food industry is clear – to succeed in winning the issues that are important to the retailer/grocery industry, we must work together, cohesively with one voice. I am very proud to say that the Alabama Grocers Association is 350 individual company members strong and financially sound. 2017 was a record breaking year for both membership and the convention and we continue to be the voice of the grocery industry in Alabama. Thank you for your constant support and the ability to serve as your President.

Last month I had the great privilege of speaking before the Food Marketing Institute Board of Directors on behalf of the Food Industry Association Executives (FIAE) which represents 47 state associations and a U.S. Territory to emphasize the importance of state association work on their behalf. I know I am preaching to the choir among our members, but I thought it might be good to reiterate some of the comments I made to them. Our business is a dynamic and changing industry. Alabama's first EBT transaction was on Feb. 26, 1997. It was the first state in the Southeastern Alliance of States to change to EBT. At that time, Bruno’s Supermarkets, Delchamps Supermarkets, and Winn Dixie held the largest market share in Alabama. Publix had three stores and Walmart had 37 stores. SNAP EBT lead to the introduction of credit card processing in the market as most transactions before that time were done by checks and cash in grocery stores. Today’s market looks dramatically different and now we will

again be the first in the Southeast to pilot online SNAP. Today we are seeing a shift in consumer buying habits and our industry shifting towards online purchasing through methods of online delivery and click and collect. We all know that with any major industry shift comes extreme legislative challenges. Whether it be the ability to buy alcohol through an online purchasing system, data privacy issues, GMOs, preemption legislation, soft drink and other food taxes, labor issues, minimum wage, etc. There are countless issues that affect our industry directly. And when activists’ groups find they cannot achieve their goals nationally, they head for the states. Nationally, we are seeing an eroding of state association support and many grocery associations finding themselves combining with a state retail association or a business association like the Chamber. Some combined food/retail associations have maintained a strong food-focused leadership, but others have not. Some

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CHAIRMAN' S MESSAGE

a t i me t o b e t hank f u l

FRANK D'AMICO, III BTC WHOLESALE DISTRIBUTORS AGA CHAIRMAN OF THE BOARD

want to implement and hope you will join us as we strive to make 2018 the best year yet for your Association. Please go ahead and mark the following dates on your calendar so you can be with us and support your Association.

During this time of year, we often find ourselves looking around at what we have and being thankful.

I would like to congratulate all of our Year Award winners; Mr. Delma Craft of Piggly Wiggly Alabama Distributing Company, Wholesaler of the Year; Mr. Eddy Quinley of Advantage Solutions, Vendor of the Year and Mr. Darwin Metcalf of Western Markets, Retailer of the Year. Each of these candidates were well deserving of their awards and do a great job at supporting the grocery industry and the consumers of Alabama. In November we were grateful to attend a luncheon to honor your Association President, Ellie Taylor as one of the Women Who Shape the State fromThis is Alabama. This award was given to 30 women of this state that invest their time and talents into making Alabama a better place and, in the process, encourage other leaders to step up and do the same. We certainly agree with their choice! Ellie has been an advocate for the healthy food financing, Alabama companies and the grocery industry as a whole. As we close in on 2017, we look to what great things we hope to accomplish in 2018. There are so many great ideas we

As your Association Chairman, I am not an exception to the rule. This year has been full of positive strides your Association has made in our state. We have many things in which to be thankful. The Fall Golf outing was a HUGE success this year. We netted over $34,000, the most of any Fall Golf Outing. This is great news to the Scholarship Foundation as they begin their Scholarship Process starting December 1. If you are a full-time AGA employee that has a child in college, or a part time AGA employee that is in college, be sure to go online to AlabamaGrocers.org before February 15th and fill out an application. A special thank you to all of you that came out to support this event, sponsored a hole, provided product for the breakfast or lunch, or volunteered your time. Without the support of our members, these events would not be possible. The Food Industry Finest Event was incredible this year. We raised over $30,000 for our SACK PAC, which will help us make contributions to influential candidates in the upcoming election that are pro-business.

Thursday, April 5 AGEF Spring Golf Outing Inverness Country Club Birmingham, Alabama. July 29 – August 1 AGA Annual Convention Sandestin Golf & Beach Resort Destin, Florida

Thursday, October 18 AGEF Fall Golf Outing Inverness Country Club Birmingham, Alabama November 1

Food Industry Finest Luncheon The Club Birmingham, Alabama I hope you and your families have a Happy Holiday Season!

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GOVERNMENT RELATIONS

2 0 1 8 L E G I S L A T I V E F O R E C A S T

PATRICK MCWHORTER LEGISLATIVE REPRESENTATIVE THE MCWHORTER GROUP

state would have to pay for some of it if CHIP funding isn’t continued at its current rate. On another front, a federal judge earlier this year ruled that the Alabama Department of Corrections (ADOC) must improve its treatment of mentally ill prisoners. The ADOC in November said it is hiring more correctional officers, but making improvements in the system will require about $10 million annually that the department doesn't have, according to the Associated Press. The department says it's up to the governor and the Legislature to provide the money. Legislators have not yet seen what the different agencies are requesting for their 2019 budget. Most all agencies have been level funded the past two years. They already were looking at a hole before any new expenses emerged. The 2018 budget year, which began Oct. 1, has $105 million in one-time BP money for Medicaid that will not be available in 2019. So if you back that out of the $128 million available as mentioned above, it’s going to be a tight budget. House Speaker Mac McCutcheon created the new House Standing Committee on Fiscal Responsibility by House resolution during the 2017 regular session. Mobile Republican State Rep. Chris Pringle has

ALTHOUGH ELECTION YEAR LEGISLATIVE SESSIONS ARE TYPICALLY CALM, 2018 MAY BE THE EXCEPTION AS STATE LEADERS FACE NUMEROUS UNKNOWNS.

1st with about $34 million more in revenue than expected. Coupled with $90 million carried over from the 2017 session (mostly from BP oil spill settlement), it could be a lot worse. But the BP money runs out after this year. However, there are a lot of unknowns out there. Congress has not yet approved funding for the Children’s Health Insurance Program (CHIPS), which provides coverage for over 150,000 low and moderate income children in the state. State leaders are hopeful Congress will act soon and extend the CHIPS program, and the 100 percent federal funding that previously has gone with it. If the state had to pay for 20 percent of that through Medicaid match, it could cost $80 million to $90 million. Children on Medicaid can’t lose their federally mandated coverage, though the

The 2018 Annual Legislative Session is set to begin January 8, 2018. As set by law, the Legislature always convenes the session early during an election year. Also, as set by law, each session is limited to 30 session days, to be held within 105 calendar days. So the work of the Session must be completed by April 23, 2018. 2018 is an election year in Alabama for all Constitutional Officers (Governor, Lt. Governor, Secretary of State, etc.), all 140 State Legislators, and many judgeships and local offices. Election year sessions are always pretty calm, with no one wanting to “rock the boat” with anything controversial leading into the election. However, we again are facing a budget crisis for the General Fund, which provides money for all non-education agencies. This fund ended Fiscal Year 2017 on October

“We hope that the strife and disruptions of last session will not carry over into next year. ”

been selected to chair the panel that will focus its attention on increasing

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“Election year sessions are always pretty calm, with no one wanting to 'rock the boat' with anything controversial leading into the election.”

With the WRAP legislation completed and going into effect in 2018, and with tasting regulations put into effect by ABC this year, we don’t expect to have any major issues in 2018. But we should see more, and get a better idea of what we will face, as we near the beginning of session.

We hope that the strife and disruptions of last session will not carry over into next year. Members have pre-filed (early introduction) 43 total bills for the upcoming session, 23 in the House and 19 in the Senate. Nothing so far that directly affects the supermarket industry. Governor Ivey has publicly stated her support for an increase in gasoline taxes, but I can’t imagine these Republicans will have any interest in tax increases going into the election.

accountability and combatting the waste, misuse, and abuse of taxpayer dollars. Joining Pringle on the committee are: Vice Chairman Chris Sells (R-Greenville), Ranking Democrat Rod Scott (D-Fairfield), Corley Ellis (R-Columbiana),

Matt Fridy (R-Montevallo), Danny Garrett (R-Trussville), Reed Ingram (R-Montgomery), A.J. McCampbell (D-Livingston) and Patricia Todd (D-Birmingham).

Happy Hol idays !

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AGA NEWS

AGA GIVE S AN NUAL YEAR AWARDS AND HOSTS LEGISLATIVE SPEAKERS AT FOOD INDUSTRY FINEST LUNCHEON The Alabama Grocers Association

economic impact on the state’s economy of over $12 billion. More than 150 people attended the event at The Club to discuss the work of the Alabama Grocers Association in 2017 and those in the state's food, beverage and grocery profession. “Each of these fine individuals hold a special place within the Alabama Grocery Industry. They are committed to growing and improving the grocery industry in Alabama,” said Ellie Taylor, President. Alabama Grocers Association. “We are and Piggly Wiggly Alabama Distributing Company. Eddy has been involved in the Alabama Grocers Association for over 12 years and joined the Board of Directors in 2013. He has received numerous awards and recognition for the work he has done in the food industry. He was awarded the Merit award from Campbell Sales Company in 1981 and 1987; and in 2009 received the Vendor of the Year award from the Associated Grocers of the South, the Broker of the Year from the Alabama Grocers Association and the Chairman’s Award from Advantage Sales & Marketing. “It is a great honor to be chosen for this award. To think that the people I work with would vote for me to receive such a recognition is overwhelming.” said Eddy Quinley about winning the 2017 Vendor of the Year Award.

thankful for the opportunity to honor them and their commitment.” “We are honored to have so many amazing people in the grocery industry that care about their customers and the communities they serve. The three individuals we honored today all have a high standard and level of commitment to their companies and the people of Alabama,” said Frank D’Amico, III of BTC Wholesale and Chairman of the Alabama Grocers Association. “I congratulate each of them on receiving the Associations highest honor”.

held their annual Food Industry Finest Luncheon on November 2, honoring their retailer, wholesaler and vendor of the year award winners. Speakers included Speaker of the Alabama House of Representatives Mac McCutcheon, President Pro Tempore of the Senate Del Marsh and Motivational Speaker Jeremiah Castille. The food retail industry in Alabama provides over 69,000 jobs with $2.2 billion in annual wages paid. Grocers pay over $1.2 billion in state taxes and have a total Each year the Alabama Grocers Association honors three individuals for their outstanding contributions to their customers, communities and industry. This year's honorees are: Vendor of the Year Vendor of the Year is Eddy Quinley of Advantage Solutions.

ABOUT THIS YEAR'S HONOREES

Retailer of the Year Retailer of the Year is Darwin Metcalf of Western Markets. Darwin started his career at 9 years old shopping and delivering groceries for his elderly neighbors from the local A&P on

the Southside of Birmingham for 15 cents a trip. At age 10, he worked as a local paperboy making $7 a week. He continued this route until he was hired at the local

Eddy started his grocery career as a direct retail sales representative with the Campbell Sales Company, followed by opportunities at The Hershey Chocolate Company and The Harper

Darwin Metcalf

Winn-Dixie bagging groceries. In 1967, Stanley Virciglio saw Darwin bagging groceries at Winn-Dixie and offered him a job at the Western Highlands. Through the 50 years working at Western, Darwin has been a night manager, produce manager, assistant store manager, store

Eddy Quinley

Sales Company. In 1989, he started with Advantage Solutions Company in Mobile and is currently Business Development Manager calling on Associated Grocers of the South, Mitchell Grocery Corporation

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AGA NEWS

manager, director of operations and executive vice president.

in Vidalia, Georgia as a produce selector and loading trucks for delivery. In 1988, Piggly Wiggly Vidalia was sold to RFS out of

Market. “It means everything to us, to be a family serving the communities we live in.” While brick and mortar has been the main source of their business for the past 20 years, Renfroe’s Market will soon be venturing into the digital space with “Renfroe’s Ready to Go,” which will allow customers to order online and pick up their groceries without setting foot in the store. In addition, the upcoming new year will see announcements from the company as to new markets and communities they will be entering in the near future. Renfroe's Market celebrated their 20th anniversary in each of their stores with a week-long customer appreciation sale that ran October 18th-24th. commodities and works with the Piggly Wiggly operators on a daily basis. Delma learned his dedicated work ethic from his father. He always told him no matter what, do what you say you are going to do, show up and give it all you got. Growing up in Lyons, Georgia on his grandparent’s farm gave him a great insight to a hard day’s work and he has taken these life lessons to heart. Over the years he has earned the respect from the co-ops and his co-workers. His knowledge of grocery procurement has made him a great ambassador for the Piggly Wiggly Alabama Distributing Company and the grocery industry. When asked what winning this award means to him, Delma replied “It tells me a lot of independent operator respect the job the employees are doing at PWADC.”

A tradition began 20 years ago when the Renfroe family took ownership of their first store, McGehee Road Super Foods, in Montgomery, Alabama. Throughout the years, the Renfroe family has built a reputation of excellent customer service, competitive pricing, store cleanliness and product freshness. In 2008, the Renfroe family opened their second location in Dadeville Alabama under the banner Dadeville Foodland. They opened their third and largest location on Eastchase Parkway in Montgomery, Alabama, in October of 2014. Throughout the years Renfroe’s Market has enjoyed national and local praise in the form of being named the best grocery store Early in his career with Western he set a goal for himself, to be president. In 2007, that goal was achieved when he was named President/Chief Operating Officer. Darwin joined the Alabama Grocers Association Board of Directors in 1998, served as Chairman in 2003, and won the Retailer of the Year award in 2004. “Coming from an organization I love and admire makes this very special. The retailers nominated are a special group and I am humbled and honored to be considered among them.” said Metcalf about winning the 2017 Retailer of the Year. Wholesaler of the Year Wholesaler of the Year is Delma Craft of Piggly Wiggly Alabama Distributing Company. Delma started in the grocery business in 1978 at Piggly Wiggly Southern

California and ran the operation until Bruno’s Supermarkets of Birmingham bought the warehouse in 1990. In 1994, Delma was relocated to Birmingham, Alabama where he was a buyer and category manager for Bruno’s. Delma went to work for Piggly Wiggly Alabama Distributing Company in September of 1998 as a grocery buyer. He worked through the ranks to his current position of Vice President & Director of Procurement. He also buys Delma Craft

RENFROE'S MARKET CELEBRATES 20 YEARS OF FRESHNESS IN ALABAMA

in the state according to the The Daily Meal and repeated best of Montgomery awards voted by the readers of the Montgomery Advertiser. “In an age when so many grocery stores have become absorbed by corporate entities, we are extremely proud to be a family-owned and operated company,” said Rob Renfroe, Vice-President of Renfroe’s

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AGA NEWS

MILO'S TEA COMPANY CELEBRATES OPENING OF A NEW EXPANDED FACILITY Milo’s Tea Company announced the opening of their newly expanded 15.5 acre headquarters in Bessemer, Alabama. that can produce and transport the freshest

beverages to store shelves. While Milo’s is investing in production and distribution, they are also ensuring continual product quality and world-class work environments for their employees. The most recent project expanded and upgraded areas such as locker rooms, break rooms, conference rooms, offices as well as added a large covered patio with grills for employee events. Milo’s also made significant investments in water treatment facilities, an Innovation Lab, and enhanced quality testing areas.

The expanded campus encompasses more than 150,000 square feet of production, shipping, storage and office space. Fifteen years ago, the then newly opened facility was 30,000 square feet on 3.5 acres. The facility is the only location where the company fresh brews and bottles over 250 gallons of all-natural beverages per minute. Milo’s beverages are then shipped from a large 30,000 square foot cooler to 13,000 retailers in 42 states. The Milo’s craze continues to grow as people across the country seek out their award-winning drinks made with real ingredients, with no preservatives or added acids. “Milo’s continued growth is a testimony to our investment in our people, the quality of our products and the support of our loyal fans,” said Patricia Wallwork, CEO of Milo’s Tea Company. “When my grandfather founded our business in 1946 his motto was, ‘use high-quality ingredients, listen to your customers and never sacrifice taste.’ More than 70 years later, Milo’s mission remains the same.”

stewardship efforts to give back to the communities they serve. Over 1 percent of Milo’s profits are donated, and they have also implemented programs to ensure the facilities on their campus produce zero waste. “We’re proud of Milo’s as a company and the overall growth of the brand through the past fifteen years here in the City of Bessemer. Milo’s is a great corporate partner, and we were thrilled to work with them on this latest expansion,” said City of Bessemer Mayor, Kenneth E. Gulley. “Milo’s success is the city of Bessemer’s success, and we’re honored to know as they expand into new markets across the country their product is stamped as ‘Made in Bessemer, Alabama.’”

“Milo’s Tea sources 25 percent of their products from Alabama and a shift was added at Pratt Industries in Jefferson County this year to cover their production needs,” said Brian Hilson, President and CEO, Birmingham Business Alliance.

The Milo's craze continues to grow as people across the country seek out their award-winning drinks.

“Milo’s is truly invested in both the Bessemer and Birmingham communities.” Milo’s Makes a Difference program incorporates sustainability and

Milo’s culture of continuous investment and improvement ensures an operation

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AGA NEWS The Al abama Grocers Associ at ion wishes to recognize its Di amond and Four St ar Sponsors for t heir generous suppor t of t he AGA Annua l Convent ion. Diamond Sponsors

Four Star Sponsors

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ALABAMA GROCER |

AGA NEWS

AG EDUCATIONAL FOUNDATION HOSTS ANNUAL GOLF OUTING

The Alabama Grocers Education Foundation held its Annual Fall Golf Outing on October 19, 2017 at Inverness Country Club in Birmingham, Alabama.

This tournament raised funds for the Alabama Grocers Education Foundation, to provide scholarships to employees and children of employees of Alabama Grocers Association companies. To date AGEF has awarded over $1.2 million because of the tremendous

18, 2018 at Inverness Country Club in Birmingham, Alabama and the Alabama’s Food Industry Finest, November 1st at The Club in Birmingham, Alabama.

The Winners

support of our members at golf tournaments such as this one. The winners of the golf tournament were as follows: First Place Team David Smith, Kenney Smith, Wes Smith and Paul Whitley with Bimbo Bakeries. Second Place Team Clint Hardman, Rob Demers, Keith Raines & Hal Tolleson with United Johnson Brothers. Third Place Team Lighting Specialists Sponsored Team, Earle Bidez with Alabama Power, Brian Castillo with Hoover Toyota, Nate Stephens with South Group and David Toner with Organ Perfusion Consultants. Closest to the Pin Nate Stephen, South Group Longest Drive Neal Whatley, Merrill Lynch. Please go ahead and mark your calendars for the 2018 dates which are: AGEF Spring Golf Outing, April 5, 2018, at Inverness Country Club in Birmingham, Alabama; AGA Annual Convention, July 28 - August 1st at Sandestin Golf & Beach Resort in Destin, Florida; AGEF Fall Golf Outing, October

Frank Kyger, Country Delite Farms; Kyle Kimsey, Red Diamond; and Manny Shoemaker, Country Delite Farms.

First Place: David Smith, Kenney Smith, Wes Smith and Paul Whitley with Bimbo Bakeries.

Rob Renfroe with Ronfroes Market; Andrew Virciglio with Piggly Wiggly; and Chris Woods and Gene Phillips with Truno.

Second Place: Clint Hardman, Rob Demers, Keith Raines & Hal Tolleson with United Johnson Brothers.

Stan Alexander, Steve Maune, Jackie Plott and Leland Slay of AG of the South.

Third Place: Lighting Specialists Sponsored Team: Earle Bidez, Alabama Power; Brian Castillo; Hoover Toyota; Nate Stephens, South Group; and David Toner, Organ Perfusion Consultants.

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AGA NEWS

Cory McGuffie, D&T Sales; Dan Burdick, Frozen Specialisties; Brian Patterson,PWADC; and Morgan Holligield, 5 Hour Energy.

Nathan Wise, Snyders Lance; Joe Blaszczak, Publix; Justin Sheehan, Publix; and Cliff Thomas, Snyders Lance.

Taylor Griffin with Post; Dominic Baldone with PWADC, Tim Cano and Todd Nichols with Post.

Danny Babb with AWG; Kevin Gillespie with Kelley Foods; Floyd Baker and Darryl Miller with AWG.

Delma Craft, Matt Peters and Jeff Brown with PWADC.

Craig Sanford and Ken Hestley of Sell Ethics; and Ed Lindley and Bubba Lindley of Edlinco.

THANK YOU TOURNAMENT SPONSORS! The Alabama Grocers Education

Bimbo Bakeries Buffalo Rock/Pepsi Bunzl Distribution/Sigma Coca-Cola Bottling Co. United, Inc., CountryDelite Farms Dent Moses, LLC Dutch Farms EDLINCO Federated Insurance Flowers Baking Company Frito-Lay Frozen Specialties

Orchids Paper Palermo’s Pizza Peake & Associates Piggly Wiggly Alabama Distributing Co. Planet Fundraiser Post Consumer Brands Publix Super Markets Charities, Inc

Foundation Golf Outings would not be as successful without the many companies that sponsored this event and contributed their goods.

2017 Presenting Sponsor Frito-Lay

Snyders-Lance Sunset Farms Super-Valu The Hershey Company Truno, Retail Technologies, Inc. United-Johnson Brothers Utz Quality Foods/Golden Flake.

Additional Sponsors 5 Hour Energy A&R Supermarkets Alex Kontos Fruit Company Associated Grocers of the South Associated Wholesale Grocers Bevco Beverages

Ice Cream Specialists Jet Polymer Recycling Lighting Specialists, Inc Merrill Lynch Mitchell Grocery Corporation

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ALABAMA GROCER |

VIEWPOINT

T U RN , T U RN , T U RN

KEVIN COUPE FOUNDER, MORNINGNEWSBEAT.COM

“To every thing there is a season … a time to break down, and a time to build up…” - Ecclesiastes 3:1-8

Like Walmart and Google teaming up to battle with Amazon. These two behemoths struck a deal that will make Walmart products available to people using the Google Express shopping platform – the first time that Walmart has made its products available in the U.S. outside the walls of its own stores or beyond its own websites. At the same time, Google will enable Walmart to use its Google Home platform, which uses a voice-controlled speaker as a personal assistant, to place orders on Google Express for Walmart products. This is all an answer to how Amazon is expanding its ecosystem through its Echo/ Alexa platform, and the partnership reflects the fact that both companies see Amazon as a threat. As should every retailer out there. In my day job, as Content Guy for MorningNewsBeat, I got a number of emails after the closure of the Amazon-Whole Foods deal was announced, with a variety of people suggesting that it would have absolutely no impact on their companies. I hope they’re right. But they’re only going to be right if they get aggressive about competing with Amazon/Whole Foods, finding ways not just to blunt their

The thing is, there is no question in my mind that these are treacherous times to be a retailer. In my previous column for this magazine, “Something Went Bump,” I wrote about some of the potential implications of an Amazon acquisition of Whole Foods. Now, as I write this column, that deal has been signed, sealed and delivered, and Amazon already has begun the process of reinvention and reintegration, while trying to maintain Whole Foods’ cultural imperatives. It won’t be easy, and success is hardly a sure thing. But then again, Amazon CEO/ Founder Jeff Bezos once said that if you know what the outcome is going to be, it isn’t really a test. And Amazon has the notion of testing limits built into its DNA. But I don’t want to write about Amazon and Whole Foods this month. If you want to know what I think about how the partnership will play out, go back and read my last column. (At the risk of contorting myself while patting my own back, I think I got it right.) No, what I want to write about this time around is the other stuff…the challenges that now ought to seem self-evident to every other retailer in the space.

I was speaking at a company event the other day where the folks were justifiably proud of themselves. It was after the company’s 25th anniversary of being in business and there was a lot of back-slapping going on. I don’t blame them that. I believe in celebrating success. I’ve certainly done my share of back-patting in my office (though it requires me to be a bit of a contortionist since I work alone). Unfortunately, I had to deliver some bad news. Good is what you were yesterday. Your reputation with your customers is entirely in the past tense. Today and tomorrow and the day after that, you have to earn it all over again, and have to do so in a business climate that is far more volatile, with customers who are far more fickle, and with competition that is far more diverse and aggressive, than anything you’ve faced in the past quarter- century. (Sometimes I go to these events, and I feel like I’m Frederic March in “Death Takes A Holiday.”)

combined advantages but to build on their own strengths in new and even unexpected ways.

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VIEWPOINT

“The ones that survive, I believe, will be the stores that understand they are not so much selling products or brands…but actually ought to be in the business of creating information- based solutions to the problems people face in their lives.”

iStock

Information-based, because the ability to provide background info about food products as well as use-centric data (recipes, menus, nutrition, etc…) will turn them into a resource for the shopper, not just a source of products. Everything, I believe, is pointing in this direction. This is the season for both breaking down old processes, procedures and silos, and building up a new relevance and resonance to the shopper. Now. Fast. Because the retail world continues to turn, turn, turn. Falling behind is an untenable option. ■

You compete by creating a retail experience – physical and virtual – that is relevant to the shopper and resonates with the shopper. (Pretty simple, huh? I concede, by the way, that it is a lot easier for me to say these things than for you to do them. Call it the advantages of being a pundit.) There are studies out there that show people – even millennials – like stores… though they don’t necessarily like shopping the way their parents did. And at the same time, we know the nation is over-stored, so it seems entirely likely that there are going to be some closures and failures out there. Maybe even some big ones. The ones that will survive, I think, will be the ones that recognize they need to occupy almost any space but the middle of the road, and that, in fact, they should not be thinking in terms of occupying space as much as creating their own differentiated and distinct ecosystems…being where and when the customer needs you to be, being less transaction-based and more focused on lifetime customer value. The ones that survive, I believe, will be the stores that understand they are not so much selling products or brands (good timing, since young people are far less brand loyal than their elders), but actually ought to be in the business of creating information-based solutions to the problems people face in their lives.

If they think that they’ll be successful simply by doing things the way they’ve always done them, then I think they have a problem. One of the more common conversations that I have when out talking to retailers usually starts out with being asked the following question: “Do you really think e-commerce is going to kill all the bricks-and-mortar stores?” Of course not. I actually think the question is the wrong one, and reflects many retailers’ desire to think in absolutes. Here are the questions that ought to be asked: “Do you think that e-commerce in general and/or Amazon in particular could steal as much as 10 percent of my business?” “Can I afford to give up 10 percent of my business?” “And, how do I compete with a juggernaut like this?” My answers are pretty simple. Yes. (But maybe 5 percent. Maybe 15. We’ll see.) It depends, perhaps, on what 10 percent you’re talking about. (Betcha that there are a bunch of unprofitable, non-differentiating sales that could be lost, but could be compensated for by more profitable sales that actually burnish and reinforce a retailer’s broader value/values proposition.)

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INSIDE THE BELTWAY

s u c c e s s e s a n d o p p o r t u n i t i e s

JENNIFER HATCHER SENIOR VICE PRESIDENT GOVERNMENT AND PUBLIC AFFAIRS FOOD MARKETING INSTITUTE

• The Equal Employment Opportunity Commission (EEOC) announced last year that private employers with 100 or more employees would be required to report summary pay data starting March 2018, designed to improve investigations of possible pay discrimination. Specifically, employers would be required to submit pay data by race, ethnicity and gender on the EEO-1 that they’re already required to submit. On August 30, 2017, Office of Management and Budget's Office of Information and Regulatory Affairs suspended the new EEO-1 report. • FMI and GMA launched from its Trading Partner Alliance a voluntary date labeling initiative to bring consistency to the marketplace after more than a year of discussions; drawing praise from several members of Congress, including the Chairman of the House Agriculture Committee. • National Council on Weights and Measures Conference rejects tare on receipts proposal. If passed, this item would have required front-end equipment to print the tare on the register receipt for each item weighed on the front-end scale at the point of sale. We hope you agree there is a lot to be proud of this year and a great opportunity for a few more victories in the final weeks of 2017.

Steve jobs once said, "If you really look closely, most overnight successes took a long time."

Financial Services.Committee Chairman Jeb Hensarling (R-Texas) decided not to include the repeal language in his legislation. • FDA extended compliance for an updated Nutrition Facts Panel to 2020 to align with other changes .• Border Adjustment Tax (BAT), which would have imposed a 20 percent tax on all imported items from being included in the tax reform framework, was defeated. • FMI and other industry groups filed a lawsuit in the U.S. District Court for the Southern District of New York attempting to prevent the City of New York from prematurely enforcing the FDA’s menu labeling rule prior to the May 2018 federal compliance date. A settlement was reached that both protects the industry from fines prior to the federal compliance date and also serves as a strong deterrent for other states and localities from prematurely enforcing the federal rule. • Department of Labor issued a proposed rulemaking to rescind the persuader rule, which would have broadened reporting requirements and made it difficult for attorneys to maintain confidentiality when discussing labor matters.

With three-quarters of 2017 in the books, this is a time of reflection for many businesses and for us at the Food Marketing Institute (FMI). It gives us a chance to analyze our successes and look at opportunities for even more victories. With all the talk of Congress not being able to get anything done legislatively, we have a number of successes to be proud of so far this year – a testament to laying the groundwork and continuing down a path in spite of whether you believe at the moment that you will succeed. Many of these victories took a lot of work but would not have been considered possible just a year ago. Here’s what we accomplished: • A one-year delay on the menu labeling rule with FDA reopening it for comments and Department of Labor’s Overtime Rule with a $47,476 salary threshold requirement is invalid and would not go into effect as had been announced. • FMI and other interested parties, worked to protect and preserve the debit card reforms placed in protection of debit reforms. House promising new guidance this year. • In August, a court ruling that the

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WASHINGTON REPORT

T i me f o r Wa sh i ng t on t o D e l i v e r S o l u t i ons

PETER LARKIN PRESIDENT AND CEO NATIONAL GROCERS ASSOCIATION

Despite numerous Administration distractions, Congress continues to pursue an aggressive policy agenda.

This fall, we’ll be keeping an eye out as Congress takes up its appropriations bills to ensure that no policy riders are attached that will repeal the Durbin amendment. However, our victory this spring means it’s unlikely that Congress will be eager to address the issue again any time in the foreseeable future. Health Care Reform After an initial failed attempt to repeal and replace the Affordable Care Act (ACA), the House was eventually successful in its repeal efforts through the passage of the American Health Care Act this May. The effort then moved onto the Senate, where Republicans faced similar challenges in gathering support among its own caucus to pass a bill. Several legislative proposals were made, but at the end of the day lawmakers in the upper chamber rejected an alternative bill known as the Better Care Reconciliation Act, which would have repealed and replaced the ACA. They were also unable to pass a straight repeal bill and voted down the “skinny” repeal bill that would have ended the employer mandate. Since then, Senate Majority Leader Mitch McConnell (R-KY) has said it’s time for Members of Congress to move on from repeal and replace attempts, leaving the future of health care unknown.

Durbin Amendment/Debit Card Swipe Fee Reform This May, the independent supermarket industry and entire retail community scored a major victory after House Republican leadership announced lawmakers would no longer include a provision in the Financial CHOICE Act (H.R. 10) that would have repealed debit swipe fee reform. NGA worked tirelessly to help ensure this provision was removed from the measure and played a leading role in the coalition to defeat the efforts. If debit reforms were repealed, retailers would have seen their swipe fees increase by a staggering 200 percent despite already paying the world’s highest swipe fees. The annual Supermarket Industry Day in Washington fly-in took place while the House Financial Services Committee marked up the legislation, giving supermarket operators the opportunity to meet with their lawmakers before the bill was advanced out of Committee.

President Donald Trump’s first year in office is quickly approaching, however much of Washington continues to be consumed with high-profile turnovers within the Administration, leaks, and an ongoing Russia investigation. Despite this, lawmakers have been pursuing an aggressive policy agenda, but continue to face slipping deadlines on things such as health care reform and tax reform. That “to do” list is likely to be crunched by upcoming deadlines to pass a budget resolution for Fiscal Year 2018, a continuing resolution to keep the government funded beyond the end of September, raising the debt ceiling, and on the Senate side, confirming the Administration’s nominees. As always, there’s no shortage of issues before Congress that affect the independent supermarket industry. Below are policy issues that our government relations team is actively engaged in on behalf of independent grocers.

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WASHINGTON REPORT

FDA Menu Labeling Regulations There wasn’t much downtime in between the menu labeling regulation being delayed to May 7, 2018, and our attempts to find a solution that creates the flexibility needed for grocers to feasibly comply. In July, the House Energy and Commerce Committee held a markup on the Common Sense Nutrition Disclosure Act (H.R. 772) and approved the bill. A companion bill has been introduced in the Senate, and we continue to encourage our legislative champions to push for a floor vote in both the House and Senate this fall. On the regulatory front, NGA submitted written comments to the FDA highlighting industry’s concerns with the proposed menu labeling rule. NGA also worked with member companies to file comments with the agency as well. ■

Tax Reform One of President Trump’s largest promises on the campaign trail included modernizing the tax code – something that hasn’t been done in over 30 years since Ronald Reagan was in office. In July, Republican leaders from the Administration, the House and the Senate released a long-awaited document that outlined where Congress and the White House hope to go on tax reform. A provision that was not included in the document: the border adjustment tax (BAT). With the exclusion of BAT, it does leave questions as to where Congress will look for the revenue to offset any tax cuts included in reform. One of the places that Congress could look to for revenue is the last-in, first- out (LIFO) method of accounting.

Prior to the release of this framework, NGA participated in a roundtable discussion at the White House on our industry’s priorities for tax reform, including lowering the tax rate across the board, maintaining the interest expense deduction, creating parity between pass-through entities and C-Corporations, preserving LIFO, rejecting a BAT, and permanently repealing the estate tax. It’s expected that the Administration will take that feedback and incorporate it into a more detailed framework by September. After that, the tax-writing committees in the House and Senate will be charged with hammering out the rest of the details. Rep. Kevin Brady (R-TX), Chair of the House Ways and Means Committee, has said he hopes to have a package on his desk by the end of the year.

Leading the Sweetener Category with the Sweetest Variety of products .

ASR-Group.com

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OUTSIDE THE BOX NEW RETAIL PERSPECTIVES

Opening an ice cream shop in the summer seems like a no-brainer and a potential cash cow. But Andia’s Homemade Ice Cream in Cary, N.C. – the middle of the lucrative area known as the Research Triangle or Silicon Valley East – is bringing a new twist to the business with flavors like baklava, lemon- basil sorbet and a rotating vegan option made with coconut milk. There will also be doughnut ice cream sundaes and ice cream cannoli. Not exactly diet food, but who cares?

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MILK WARS

Remember the neighborhood milkman who delivered daily to your door – he’s back! Illinois-based Oberweis Dairy has begun delivering “gently pasteurized” milk in glass bottles, cheese, ice cream and other products to homes in Morrisville, N.C., in an effort to muscle in on territory claimed by two other local dairies. Seems like an old-fashioned price war is shaping up with the new kid on the block offering a free cooler and a reduced delivery fee, although product prices are about 10 percent higher than local supermarkets. Maybe Amazon will want a piece and start drone deliveries to the front porch!

The annual payments survey by the Retail Bulletin has found that in the UK debit cards have surpassed cash as the top payment method. New rules by the EU Interchange Fee Regulation are delivering savings of nearly $600 million to retailers and customers. However, cash isn’t going to disappear any time soon due to the relatively high cost of processing card payments. Meanwhile, the survey found that credit card payments continue to fall an indication of where investments in technology should be. CASH AIN’T KING ANYMORE

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If you’ve never heard of Cheerwine don’t worry – fewpeople have. This soft drinkhas been a Southern staple since it was introduced in 1917 and the North Carolina-based company recently brought the cherry flavored beverage to the White House as part of American-Made week. But there’s a newer twist. Cheerwine has partnered with Krispy Kreme for a soda that tastes like the doughnut’s original glaze. If you listen closely you can hear the cheers from dentists all over the Carolinas. Cheers

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OUTSIDE THE BOX

Unicorn Juice Things are getting nasty in the land of the latte. In the hipster haven of Brooklyn, N.Y., a small coffee shop called The End, a barista pours a blue liquid in a cup and tops it with frothy coconut milk, goji and pomegranate

CRYPTO CONFUSION

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While the Washington swamp is mired in discussions over excess regulation, the ephemeral world of crypto-currencies is making fortunes without any regulation whatsoever. Recently, two unnamed companies with no sales raised $400 million from investors. Instead of the usual Wall Street IPO, this was done through an ICO or Initial Coin Offering, which is totally unregulated. This exploding business, for which over $1 billion was raised in offerings this year, not only includes Bitcoin, but also names like Blackcoin, Burstcoin, Potcoin and Zcash. These offerings, which investors use to purchase this digital currency, rose in value 3,350 percent in the first half of 2017, proving once again that you don’t have to make a product to sell it.

powders and fluorescent pink vegan sprinkles and calls it Unicorn Juice. But the company is suing Starbucks’ Montauk Juice

Factory for trademark infringement to the tune of $10 million, for selling a pink and blue concoction called a Unicorn

SAFETY NET

Frappuccino. A judge will rule whether the lawsuit is as mythical as the creature it’s named after.

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The merger of longtime rivals QVC and the Home Shopping Network (HSN), which made fortunes on items like the Miracle Mop and the George Foreman Grill, are hoping the $2.1 billion deal will give them some leverage against Amazon. Both companies were early adopters of e-commerce and are not under the same pressure as brick-and-mortar retailers. But sales at both companies have been declining precipitously over the past year courtesy of Amazon.

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Analysts say Nike hasn’t done enough to capture the millennial market. But this could change. The company has decided to start selling its products on Amazon and Instagram – a move that’s likely to boost its stock price as well as sales as sporting good sales increasingly move online and into social media. The trick will be to highlight athletic products more as fashion statements and not just performance apparel. MISSING

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