PLMA e-scanner January 28, 2023

Issue #2 of 24
January 28, 2023

NEWS ROUNDUP
Kroger Store Brands VP to Speak at PLMA Conference

Juan De Paoli, Vice President Our Brands at Kroger, arguably the most influential store brand executive in the country, will be the featured speaker at PLMA's 2023 Annual Meeting and Leadership Conference, March 22–24, at the Hyatt Grand Cypress, Orlando. 

De Paoli will speak at a breakfast session on Friday, March 24.

“We are pleased to welcome Juan De Paoli to our annual Meeting and Leadership conference,” said PLMA President Peggy Davies. “Juan’s 20-plus years of experience, vision and talent has greatly contributed to consumer engagement with retailers’ own brands.”

De Paoli joined Kroger in 2021 and he is responsible for driving Kroger’s private label vision, strategy, and program development to deliver long-term growth and enhance the company’s brand equity, strategic positioning, revenue, profit, and market value. He also provides leadership to and develops high-performing team members, oversees product development, testing, sourcing, vendor selection and private label marketing programs related to private label products. Prior to Kroger, he served as senior vice president of Private Brands, Ahold Delhaize USA; and spent 12 years at H-E-B in its Own Brand organization.

Additional conference speakers include Kevin Ryan of Malachite Strategy and the Culture Matters newsletter; James E. Dillard III, Executive Vice President and President, Consumer Healthcare Americas, Perrigo; Roger Davidson, an industry veteran and leading consultant in the food retail industry; Tim Pollard, Founder & CEO of Oratium; and Julien LeBlanc, Co-Founder and President, Blueprint North America.

The conference is themed What Does Winning Look Like for Store Brands?, reflecting the expanding role store brands play in U.S. retailing, particularly in the wake of 2022's record-breaking sales.

Kroger exemplifies that role, and De Paoli is responsible for driving the chain's private label vision, strategy and program development to deliver growth and enhance the company’s brand equity, strategic positioning, revenue, profit and market value. Prior to joining Kroger in 2021, he held leadership store brand positions at Ahold Delhaize, Ahold, Topco and HEB.

The annual conference brings together manufacturers, retailers, and many others and focuses on expanding private brand knowledge of the industry in general, as well as for personal and professional development.

To register for the conference please click here or for additional information, contact Carleen Foster at conferences@plma.com

 

 

Lunch and Learn Session to Focus on Store Brand Sales Feb 2

PLMA continues its popular Lunch and Learn series on February 2 with a review of store brand sales from 2022 and what it means for the industry, manufacturers, and retailers.

Titled “Consumer Demand for Private Brands: A Look Back & Ahead” the session will be presented by IRI’s MaryEllen Lynch, Principal Consultant and Team Leader for Center Store.

Lynch will have a different view of store brands sales in 2022. Rather than focusing on double digit increases in dollar sales, Lynch will focus on products. She will offer what she believes is a more accurate measurement of how much the products grew, or didn't grow, last year.

Examining select product categories that IRI Unify tracks exclusively for PLMA, Lynch will explain in detail how store brand sales changed in terms of the number of pounds of products were sold. She will explore what were the winning food and non-food areas of the store as measured not just by dollar and unit sales but by increases in product volume sold. 

This session of PLMA's Lunch and Learn program will also look at challenges ahead for 2023, analyze why certain "pockets of time" during 2022 had disproportionate changes in store brands sales and the impact of more at-home family time on the purchase of private brand staples.

Lynch will also review how retailers can do a better job "making their store brand the product of choice of their customers" and how national brands are managing price increases by reducing volume per package and other methods.

The online Lunch and Learn session will be held Thursday, February 2, for 60 minutes starting at 12:30 PM ET. The professional development program is complimentary for all PLMA member manufacturers, brokers, and suppliers as well as retailers and wholesalers. To register for the event, please click here, or contact Julia Meehan at education@plma.com for more information.

 

USDA Increasing Oversight of Organic Foods

The Agriculture Department has announced new guidelines for products labeled “organic,” which is a term that has been increasingly misused as shoppers have sought out healthier, environmentally friendly food.

The USDA has strict definitions of how a product can be labeled “certified organic” since the rules were introduced in 1990. They allow the label to be used only for products that meet certain standards for soil quality, animal-raising practices, pest and weed control, and use of additives. The new updates issued by the USDA aim to protect organic integrity, bolster consumer confidence and eliminate ingredients that don’t meet the criteria to be used.

“Protecting and growing the organic sector and the trusted USDA organic seal is a key part of the USDA Food Systems Transformation initiative,” said Jenny Lester Moffitt, undersecretary for Marketing and Regulatory Programs in a press release announcing the move.

“The Strengthening Organic Enforcement rule is the biggest update to the organic regulations since the original Act in 1990, providing a significant increase in oversight and enforcement authority to reinforce the trust of consumers, farmers, and those transitioning to organic production,” Moffitt added.

Key changes will include requiring certification of more of the businesses, like brokers and traders, at critical links in organic supply chains; requiring National Organic Program (NOP) Import Certificates for all organic imports; requiring organic identification on non-retail containers; standardized certificates of organic operation, and additional and more frequent reporting of data on certified organic operations.

 

Kroger Celebrates 10 Years of its Simple Truth Brand

The Kroger Co. is celebrating the 10th anniversary years of its private-label Simple Truth line, which holds the distinction of being America's No. 1 organic and free-from brand.

Simple Truth offers more than 1,500 products that are free from 101 artificial colors, flavors, preservatives, and sweeteners, and contain no artificial ingredients.

"A decade ago, Simple Truth was born when we identified that our customers wanted a simpler way to shop for Free From and Organic products," said Juan De Paoli, VP of Our Brands. "The mission we started with 10 years ago remains our promise today – to offer delicious foods that are Free From 101 artificial ingredients our customers do not want in their products at an accessible price.”

Simple Truth also includes minimally processed, naturally raised meats, and organic items produced by growers and handlers certified by agencies and organizations accredited by the USDA, free from synthetic fertilizers and genetic engineering.

“During the past 10 years, Simple Truth stayed true to that commitment, making it a customer favorite and America's number one Organic and Free From Brand. We are so proud of all we have achieved together and even more excited about what is ahead for Simple Truth,” De Paoli added.

Kroger also published a list of the most popular Simple Brand products over the past 10 years. They were Organic Garbanzo Beans, Mixed Berry Granola, Organic Apple Juice, Organic Creamy Peanut Butter, Organic Whole White Mushrooms, Natural Cage Free Large Brown Eggs, Organic Mixed Vegetables, Exotic Vegetable Chips, Organic 100% Whole Wheat Penne Rigate, and Organic Baby Spring Mix.

 

FDA Issues New Rules for Sesame Allergen Labelling

The U.S. Food and Drug Administration (FDA) has added sesame to the list of foods that must be labeled as allergens on packaged products.

In announcing the sesame labeling rule, the FDA also cautioned people who are allergic to that ingredient that it could be a while before they notice the change. The new rule went into effect on Jan. 1.

“The law establishing this sesame labeling does not require food products that were already on their way to the store or in stock before 2023 to list sesame as an allergen on the label,” the FDA noted. “Therefore, these food products do not need to be removed from the marketplace or relabeled to declare sesame as an allergen.”

Sesame became the ninth major food allergen addressed by the Food Allergy Safety, Treatment, Education and Research Act passed in 2021. The other eight were defined through a federal law passed in 2004. They include milk, shellfish, fish, wheat, peanuts, tree nuts, eggs, and soy.

The FDA also alerted consumers that because some food products have a long shelf life, “it’s hard to say when pre-2023 stock will be replaced with food products carrying the required labels. So, proceed with caution during this transition period.”

 

SpartanNash Acquires Great Lakes Foods

SpartanNash has announced it has acquired the independent grocery wholesaler Great Lakes Foods, along with its 300,000-square-foot distribution center in Menominee, Michigan.

The Great Lakes Foods distribution center serves approximately 100 independent grocery customers across the Midwest. SpartanNash said it plans to continue to employ the workers at the distribution center while also investing in IT upgrades to expand its services. The integration of the businesses will happen throughout 2023, SpartanNash said. 

“This acquisition represents SpartanNash’s ongoing commitment to optimize our supply chain network, drive growth through geographic expansion and serve our customers more efficiently,” Masiar Tayebi, SpartanNash VP and chief strategy and information officer, said in a statement.

"I am incredibly proud that SpartanNash purchased our distribution center,” Tom Kuber, owner of Great Lakes Foods, said in a statement. “We value our Associates and long-standing customers and know SpartanNash is well-equipped to elevate the level of service and amplify its People First culture based on their strong track record.”

Great Lakes Foods has been in business for more than 100 years. And is a supplier of private label, wholesale meat, dairy, produce, frozen, bakery and deli products for supermarkets and convenience stores.

 

Walmart to Provide GoLocal Services to Salesforce Clients

Walmart has announced it has entered a partnership with software giant Salesforce to provide its retail customers with store pickup and delivery services using Walmart's supply chain network.

Retailers and other businesses which use Salesforce's e-commerce platforms to host and manage their websites, will be able to use Walmart's GoLocal and Store Assist services to have order pickup done faster and provide same or next-day deliveries to online customers, the companies said.

GoLocal was launched in 2021 and is Walmart's delivery-as-a-service business fulfilling last-mile shipping needs for businesses at a lower cost than building out their own network, which can be a major expense.

Walmart's Spark Driver platform, the company's local delivery service that uses independent contractors, has drivers pick up orders from local stores and deliver them to shoppers' doorsteps the same day. On a conference call, the company said since its launch GoLocal has completed more than 3 million deliveries so far.

Adding more retail clients would help Walmart operate its fleet more efficiently and additional clients mean higher order volumes, pickup locations and increased route density that would lower costs per order.

 

Amazon Expanding Its Prime Delivery Service

Amazon is expanding its ‘Buy With Prime’ delivery service which allows Prime subscribers to use the company’s speedy delivery service when shopping on other websites. 

Introduced in April by invitation only, Amazon said “Buy With Prime” will be generally available in the US by the end of January. The company said the number of customers who bought a product after clicking on it has increased 25% on sites using the service.

The move is part of Amazon’s exploration of new ways to help leverage its immense logistics operation. The “Buy With Prime” service adds value for Prime members by bringing fast delivery to other sites and helps merchants boost sales with minimal investment. In an interview with Bloomberg, Amazon Vice President Peter Larsen said, “If you offer ‘Buy With Prime,’ the increase in shopper conversion will more than offset the fees we are charging.”

This is the latest move for Amazon to expand its e-commerce platform beyond its own webstore, which it has done with various services for several years. In 2013 the company relaunched its payments service Amazon Pay allowing customers to shop on other sites using payment information stored with Amazon and in 2015 Amazon began closing its Amazon Web Store business.

 

CVS Exploring Acquisition of Oak Street Health

CVS Health Corp. is exploring an acquisition of Oak Street Health Inc., a company that runs primary care centers for Medicare recipients, according to reports. Talks between the companies are reportedly ongoing and could end without an agreement, according to sources. If a deal is reached, it could value Oak Street at more than $10 billion to be purchased.

This comes on the heels of CVS’s continued expansion into the health care industry. In 2022, the drug chain acquired Signify Health Inc., a deal that should close in the first half of 2023. CVS also held talks last year to buy health-care provider Cano Health Inc., and in 2018 it purchased the insurer Aetna.

The company has stated it wants to make health care more convenient and affordable for consumers and has plans to partner with doctors or even potentially acquire primary care practices.

Oak Street, which went public in 2020, aims to reinvent care for Medicare patients with low incomes and chronic health problems. Oak Street has 169 centers across the US which provide care for almost 160,000 patients according to the company.

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