Health & Wellness a “Go to Market Strategy”

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

As surprising as it sounds, recent data shared at an FMI panel discussion in Dallas showed that despite higher numbers of value seeking shoppers, strong programs and excitement create increased sales.

Key drivers which outstrip price include: value, convenience, personalization, ethnicity and health and wellness.

The panel agreed; price alone is not enough, and today’s biggest opportunities for building supermarket sales is selling ideas with powerful merchandising and marketing programs.

In non-foods, health and wellness programs are key drivers which benefit today’s shoppers. The high cost of getting sick and ever increasing health insurance costs have created a need for health and wellness initiatives, education, merchandising and events that will cover the calendar.

Identifying HBC products with cross merchandising synergies enhance prevention and generate growth. Scan data shows that 70% of shoppers who buy cough & cold products will buy juices.

Prevention categories include health care, personal care, nutritional care, and environmental care. One panel member put it this way “it’s those products which go in me, on me and around me to help me feel my best”.

According to a GMDC study, there are specific “gateway” categories that influence consumers shopping habits. Having the right mix in Vitamins & Supplements, Skin Care, Sanitizers and Hair Care are critical to keeping shoppers in the store.

Knowing your customer and marketing to their needs, provides a wonderful opportunity for event selling. One supermarket retailer developed a 12 month calendar that focused on promoting wellness products at key intervals throughout the year. By targeting perishables, key grocery items, health & beauty care and adding an in store nutritionist, the retailer created a selling event which encompassed the entire store.

Health and Wellness spending has steadily increase since 2005. Retailers who understand the trends and create a wellness “Go to Market Strategy” capitalize on the opportunity to generate both increased sales and greater customer loyalty.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Congratulations Chip O’Hare! 2012 – MFA’s Man of the Year

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

Several years ago, when it seemed everyone in the brokerage business was selling out, Chip O’Hare said “NO-we can do it on our own”. Chip had faith in his people and the confidence to stay the course. 

Today, Johnson O’Hare employs over 600 associates representing all of the major supermarket categories including Grocery, HBC, Meat, Fish, Frozen, Deli and Candy, and is one of the largest Produce brokers on the East Coast. Chip’s insight, compassion and values speak to the culture he’s created with his associates. They are friendly, loyal, highly motivated and incredibly stabile. Most have been with JOH for well over 20 years, and there’s even a waiting list of talented people who would love to join in.

Chip’s great sense of humor and sharp wit make him the ultimate toast master. At MFA, he’s toasted and roasted a number of our industry’s best; John Andrew DeJesus, Steve Lincoln and Brian Pijanowski. No one is funnier, and no one does it better than Chip!

And, when it comes to MFA Conventions, who else but Chip would be as comfortable in his own skin, whether he’s dressed up like a women, a surfer with long blond hair, or a rock star of the 60’s.

Involved in nearly every industry committee, Chip encourages many within his organization, including his loving wife Bobbie, to do the same. Together, Chip and Bobbie make a great team. They have contributed generously to the disaster relief in Haiti and New Orleans, the New England Food Foundation, the Maruders and Women of Influence in the Food Industry, to name just a few.

While Chip has more time these days for golf, or recouping from his hip surgery this past winter in Florida, he’s never far from his customers and his people.

He’s a people person through and through, and a wonderful choice as this year’s 2012 Massachusetts Food Association “Man of the Year Award”.

Congratulations Chip… Well-deserved, and thanks for all you’ve done!.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Growing Customer Sales with Seasonal Non-Foods

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

At a recent industry meeting, I was struck with a comment from one of the speakers, “growth from existing customers is the key to the future”, he said. 

As a distributor we know only too well that our growth is dependent on our ability to help retailers grow their non-food top and bottom line. Easier said than done, it takes strong customer relationships, knowledge of the consumer and of course delivering the right solutions.

Seasonal non-foods are one of the best opportunities for generating growth in existing stores and seasonal non-food merchandise lends itself, perhaps more than any other categories to shows or expos.

Seasonal Shows embrace collaboration between retailers, suppliers and vendors. When retailers take time to attend a Seasonal Show, they do far more than “touch and feel” the goods. They listen, ask questions, are open, make suggestions and talk with other attendees to get the answers they need to make the right seasonal product decisions. It’s vastly different than merely buying from a seasonal catalogue.

Recent business reviews validate the value of seasonal commitment. With in-line HBC and GM running relatively flat in same store year over year sales, seasonal non-foods continue to grow materially out pacing center stores sales.

As always willingness to work together is a powerful factor in growing the top and bottom line. Collaboration by participating in Seasonal Non-Foods Shows is a sure winner that delivers far better results.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Turning Change into Opportunity

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

A recent report prepared by Accenture, a global management consulting firm, stated that more than $100 billion in value has been trapped in supermarket inventory. The report presented at FMI’s Mid-Winter Conference, states that grocery supply chain currently carries 60 plus days of inventory. Shifting demographics, new channel formats and faster new product introductions with shorter life cycles all speak to the challenges we face in the supermarket industry. Attracting new customers, generating store growth and embracing new category segments has never been easy, but in our current economy, it’s more difficult than ever. Even Wal-Mart after discontinuing thousands of SKU’s a few years ago in an effort to free up cash flow and increase their ROI, had to bring back 8,500 items to their merchandise mix in order to restore same store sales and get back to growing their business.  

In non-foods, the challenges are the same. Health & Beauty Care, Cosmetics and General Merchandise are typically slower turn categories. The competition from other channels, specifically chain drug, mass merchandisers, warehouse clubs and now on line sites are huge.

But supermarkets still have the best opportunity to capture non-foods market share.

We believe broader variety, pieces vs. full case replenishment, speed to shelf, frequent orders and in-store service create retail success not only in reducing inventory but more importantly by growing the categories. It takes strong execution, an understanding of shopper’s behaviors and needs, and connecting with each store.

Change is inevitable. Turning change into opportunity will create a win for our shoppers and for our retailers too.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

HBC Looking Back at 2011 and Looking Forward to 2012

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

2011 was another challenging year for increasing HBC Sales in supermarkets.  

The soft economy set the tone for shoppers, as consumers looked for quality at a good price. Health & Beauty Care (HBC) sales continued to be promotionally driven. Top HBC brands sold well, while secondary brands performed poorly even when strongly promoted. It certainly appeared, consumers preferred tried and true brands with one big exception being Private Label. This category for the third year in a row materially outpaced national brand growth.

Leading categories that drove growth in 2011 included: Vitamins, Cough & Cold, Natural HBC, Diet and Nutrition, Bath & Body. While Analgesics suffered because of the increasing high number of manufacturer recalls.

Total HBC sales increased by .7% over last year. Cosmetics enjoyed a stunning 8.3% gain in Northeast food stores. The nail category drove growth in Cosmetics at an impressive 25% over the previous year. Health and Wellness with high focus on hydration products and water filtration systems also had a significant growth in 2011.

Perhaps some of the greatest HBC gains in food stores in 2011 were achieved by retailers who expanded their HBC assortments. Tired of allowing other classes of trade to capture larger share of HBC purchases, supermarkets fought back with broader selections at competitive retails. The benefit went well beyond HBC, by keeping shoppers in their stores and not inviting them to buy food items in other channels.

Looking forward to 2012, the economic conditions are not likely to change anytime soon. However, if supermarkets stay focused on HBC, continue to be aggressive and have the right offerings, their share of HBC will continue to grow. All it takes to build superior HBC performance is a willingness to adapt to an ever changing retail market and staying proactive in the New Year.

The End

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Supermarkets Care

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

At this time of year many of us reflect on our lives and the many things for which we are grateful. We are also reminded, as we think about our own families and friends, of the many people in our communities who are less fortunate and in need of help. The supermarket industry is made up of caring people who go the extra mile for those in need, especially at this time of the year. Here are just a few examples of what is done in our home state of Massachusetts. I know this is reflective of what many in our industry do throughout the country.  

The U.S. 2010 Census Report showed that 245,000 households or 600,000 people living in Massachusetts had difficulty providing food for themselves. Hundreds of thousands of people are hungry in one of the most prosperous and livable states in the country.

Recently I had the opportunity to be principal for a day in a public school in Worcester, MA, the University Park Campus School. The award winning academic success of the school is impressive, and I have so much admiration for the dedicated staff and students with whom I interacted that day. I enjoyed my time at the school and many things left a lasting impression on me but none more than the fact that three-quarters of this high performing student body eat two hot meals a day at school because there isn’t enough food at home.

Leaders in the supermarket industry are responding to the hunger crisis. Hannaford Supermarkets has implemented a three part program called Hannaford Helps Fight Hunger at its 26 Massachusetts stores over the holiday season. The program delivers food directly to those who serve the hungry and encourages customers to make contributions to those in need at the register. Its “Buy One, Give One” program allows for designated items purchased by customers to be matched by the company with a similar item donated to the local area food bank.

Working with the Greater Boston Food Bank, supermarket chains including Stop & Shop, Shaw’s, Hannaford, Johnnie’s FoodMaster and Roche Brothers donated 16,000 turkeys to Massachusetts residents this past Thanksgiving. These contributions were matched by others and the total number of turkeys provided to families in need was 44,000.

At Imperial, the management team makes a donation to the Greater Worcester County Food Bank, matched by a company contribution, in lieu of sending holiday cards to one another.

These are just a few examples of the generosity of our industry. Big Y, Market Basket, Price Chopper, Whole Foods, Wegmans, and many others have traditions of giving to those in need, during the holidays, and throughout the year.

I’m proud of what our trading partners in the supermarket industry do to provide for those who are most in need, especially at this time of year. So, on behalf of all of us from Imperial, it is with sincere gratitude that we extend our warmest thoughts and wishes to all for a wonderful Holiday Season and a very Happy New Year.  

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Congratulations to Big Y on its 75^th Anniversary

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

During “The Great Depression”, toothpaste cost 29 cents, aspirin was 49 cents and a light bulb could be purchased for 6 cents.  While retail prices have certainly risen from those early days, in the 1930’s, the average family spent 18.8% of their disposable personal income on groceries as compared to today when the average U.S. family spends 5.5% according to the Department of Agriculture.  This is a powerful tribute to the entire food industry which has been unrelenting in its efforts to control both food and non-food costs for the consumer.   

And there’s no better example of just how far the supermarket industry has progressed than Big Y which is celebrating its 75^th anniversary.

In 1936, Big Y opened its first store in Chicopee, Massachusetts, a far cry from the fifty-nine World Class markets it operates today. The founders, Paul and Gerry D‘Amour were determined to do “whatever it takes” to serve the customer.  Big Y’s culture is one of enduring values with a commitment to customer service, price and quality, innovation and giving back to the community.

The D’Amour family sets the tone – as it always has- starting with Paul and Gerry, continuing with Donald, Charlie and Claire and now including the third generation; Michael, Nicole, Matt, Emily and Maggie.  Big Y’s team, over 10,000 strong, lives these values every day.

While many things in supermarkets have changed, Big Y’s customers continue to experience the same commitment to service, price and quality that its early customers enjoyed at the Y Cash Market 75 years ago.  Their spirit of innovation is widely recognized and their World Class Market format and Express Savings Club have become models for the industry.  We saw their passion for innovation firsthand with the expansive Health & Beauty and General Merchandise departments in the early 90’s.  They showed us all what was possible; not only in their stores but in the communities they serve.

The Big Y team has always believed in the importance of giving back to the community.  The Company’s commitment to children and education has been recognized on a national level and is the source of great pride to everyone associated with Big Y.

Today, Big Y is clearly one of the pioneering leaders in the supermarket industry.  So many of us have learned from the Big Y family and our relationships with them have made us better companies.

We congratulate Big Y on its 75^th anniversary, knowing that achieving this impressive milestone is proof positive that the best is yet to come.    

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

HBC Pricing Matters in Independent Supermarkets

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

We all know price matters. A recent Nielsen study reinforced that consumers become increasingly more price sensitive during a recession. The growth in private label is more evidence of this trend. Ironically, private label products are less price sensitive than national brands because consumers associate private label with lower prices. So, how does the independent grocer compete on HBC?

It starts with understanding that consumers are more price sensitive on products they buy frequently. Secondly, retailers need to know the competitive prices in their market area on key national brand HBC products – like Colgate, Pantene, and Listerine. Then they should develop a pricing strategy and change consumer perception about where to buy these products.

Recently a friend of mine was telling me that she creates two shopping lists: one for an independent grocery store which she visits weekly and one for Wal-Mart where she only occasionally shops. On her Wal-Mart list was deodorant, shampoo and toothpaste. When I asked her why she wouldn’t buy these items at her grocery store, she said it was “too expensive”. Her perception was that HBC was higher priced in the grocery store. But was it really?

We recently completed a study for an independents grocery group. We surveyed the marketplace on 16 top selling SKU’s. Where our retailers were more expensive, we worked with vendors to source the product to meet the market’s lowest price. Once the price was lowered, the challenge of changing consumer perceptions was critical. We developed a program which included store banners, HBC floor and shelf signs, and off shelf displays which drew attention to the items and the market’s leading HBC prices. We even showed these items on their Facebook page. The program resulted in a threefold increase in sales on the key products. More importantly, traffic increased in the HBC aisle. And while there’s always trade-off between margin rate and margin dollars, it is clear that price matters in growing HBC sales for the independent grocery store.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

“Innovate or Die” – We choose to Innovate.

Innovation is the life-blood of all successful organizations. Bill Gates may have been the first business leader to be quoted as saying “Innovate or Die”, but many have said it since, and we agree. We know we need to innovate to keep pace with our retailers who are changing and improving every day. We also understand that value comes from expertise – and innovation – in most non-food categories. Shoppers’ tastes change and financial pressures impact consumer purchases now more than ever. As always our industry anticipates consumer behavior as we strive to better market and sell our products.

One example of innovation can be found in the growth of the vitamin category. Anyone who has recently visited a doctor knows that Vitamin D is highly recommended, and people are heeding advice to supplement diet with vitamins. Sales in this category have seen double digit growth over the last two years. To respond to this trend, space for vitamins has grown threefold and sections are brand blocked to enable effective promotions that drive sales. Many retailers have moved from small integrated sets to free standing sections, seeing strong results.

Another example of recent innovation can be found in the expansion of fruit and vegetable cross merchandising displays. Products needed to peel or eat fruit and vegetables are colorful, high quality and adapt to new life style consumers.

And in the spirit of innovation, we recently renamed our merchandising center at Imperial. Our “Innovation Center” represents substantive changes which in many ways the center looks and feels like a grocery store albeit one dedicated to non-foods. It’s not unusual to see category managers and supermarket operators working together developing planograms, designing new programs, reviewing advertising plans, or simply choosing new price tags or signing to support promotions. Looking at best practice and learning from each other is what sparks innovation.

“Innovate or Die”. We choose to innovate.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Non-Food for Thought

 Congratulations to Mike Bourgoine, Associated Grocers of New England

Mike Bourgoine, President and CEO of Associated Grocers of New England is being inducted this month into The Food Industry Hall of Fame. I want to join others in our industry in congratulating Mike for his many years of leadership of AG of New England which have led to this honor and recognition by his peers. His induction has caused me to reflect on my relationship with Mike that spans 40 years,
and to consider the reasons for Mike’s success.

Mike and I began our careers in the industry at about the same time and I remember being impressed
early on by his great instincts for retail. He was intuitive, always constructive and very insightful about
the needs of the retailers he supported. He was also willing to try new things. Mike encouraged and
supported Imperial’s first seasonal merchandise show which was conducted in New Hampshire for
Wetterau retailers. I have always been grateful for Mike’s cooperation with suppliers. I also admire the
collaborative spirit he helped to create and nurtures among the independent retailers that make up
AG of New England.

Jim Collins the often quoted author of “Good to Great” and “Built to Last” points out that getting
the right people on the bus comes first, and that the right people will take your organization where
it needs to go. Mike has done that. He created a great team and AG of New England has grown
and flourished as a result. When Mike assumed the leadership of AG of New England, it was a
small group of independent retailers who were benefiting from group buying, with a warehouse in
Manchester, New Hampshire that was outdated. Today AG of New England has grown to a major
wholesale grocery operation with an impressive state of the art distribution center in Pembroke, New
Hampshire that supports and supplies retailers in seven states. Mike and his team have gained the
respect and confidence of their retailers and the cooperative members they serve, and together they
have grown their business and made AG of New England the success it is today. The right people on
the bus, indeed.

We congratulate Mike Bourgoine on the occasion of his well deserved induction into The Food
Industry Hall of Fame.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com