Week of September 23, 2019 |
• | Retail will factor prominently in presidential election | • | Ahold Delhaize USA reformulates products | • | Amazon make environmental moves | • | West Virginians await Walgreens drones | • | State of the consumer: confident & conflicted | |
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Words of wisdom from Groceryshop |
There are two things abundantly clear about the future of food retailing. There's never been more certainty that the forces of disruption will intensify nor has there been less clarity around which of those forces will be most impactful. This was true before 3,000 people hit Las Vegas last week for the Groceryshop conference and it’s even truer after attendees were exposed to three days of insights and innovation. In only its second year, Groceryshop presents the industry with an opportunity to find inspiration and gain perspective on cumulative changes to try and make sense of what it all means. For Groceryshop founder Anil Aggarrwal it means a new era has arrived where the effects of change will be exponential and require new approaches to how companies plan, implement and operate. Change is driving wholesale disruption at the head of the demand curve, where the industry operates at scale and derives the greatest amount of revenue and bottom line profitability, according to Aggarwal. “What we’ve done in the past to get to where we are now, no longer gets us to where we need to go,” Aggarwal said. “The single biggest adjustment is to move away from the linear thinking that starts from where we are today and projects forward, and instead, to think in disruptive terms backwards from what consumers want and need.” That’s easier said than done for an industry accustomed to incrementality, but Aggarwal contends innovation has never been easier. “There is unprecedented access to information and talent, consumers can now be readily engaged as part of an iterative product development process and Wall Street is ready to reward investment, risk and innovation.” If attendees at Groceryshop came away with only one nugget of insight about how to think about the future, it would be Aggarwal’s closing comment. “It’s now less about what you already know and more about the quality of the questions you ask, enabling inspired and empowered individuals to readily create the future.” Other words of wisdom from PG The Progressive Grocer team was at Groceryshop and offered insight in two key areas. Editorial Director Jim Dudlicek shared a view on friction elimination while digital and technology editor Abby Klecker weighed in on the possibilities of personalization. |
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Is Doug McMillon running for president? |
No, the president and CEO of Walmart is not running for president, however Doug McMillon did just accept a role guaranteeing the voice of the top executive at the world’s largest company will be heard more loudly during the campaign. McMillon was elected to serve a two-year term as chairman of the Business Roundtable, succeeding Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., who served a three-year term. McMillon joined the organization of CEO’s in 2014 and will begin his duties as chairman on Jan. 1, 2020, which is right about the time the presidential campaign and attacks on business from candidates with varying degrees of socialist tendencies really heat up. Ever the diplomat, McMillon explained it this way: "In the coming months, there will be extensive conversations about America’s future and the role business plays in shaping it. As Chairman, I commit to keeping Business Roundtable CEOs at the forefront of constructive public policy debates as we pursue an agenda of greater growth and opportunity for all Americans.” |
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Walmart President and CEO Doug McMillon will play a heightened role in the 2020 election as Chairman of the Business Roundtable. |
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Now the environment matters to Amazon |
In the spirit of the Emmy Awards, the 2019 “Climate Grandstander of the Year” award goes to Jeff Bezos. He founded and built a huge business that consumes enormous resources and fossil fuels to satisfy American’s desire for inexpensive products delivered quickly. Now, he has taken “The Climate Pledge,” a new initiative created by Amazon and the group Global Optimism, whereby signatories agree to achieve net zero carbon a decade prior to the Paris Accord’s 2050 goal. “We’re done being in the middle of the herd on this issue—we’ve decided to use our size and scale to make a difference,” Bezos said. “If a company with as much physical infrastructure as Amazon—which delivers more than 10 billion items a year—can meet the Paris Agreement 10 years early, then any company can.” Amazon is later to the sustainability game than other large retailers, but it has attempted to make up for lost time. One way Amazon plans to reduce its fulfillment footprint is with electric vehicles. It ordered 100,000 electric delivery vehicles from Rivian and expects the vehicles to make deliveries beginning in 2021, with 10,000 of the vehicles on roads by 2022 and all 100,000 by 2030. |
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Ahold Delhaize USA cleans up its act A major product reformulation initiative is underway at Ahold Delhaize USA where certain chemicals are being banned or restricted from inclusion in products. “Consumers indicate they want more transparent products for their families, made with ingredients they can feel good about. We’re pleased to launch this new commitment, which will bring more sustainable options, free from unwanted ingredients, to neighborhood grocery stores,” said Brittni Furrow, VP of Sustainable Retailing and Healthy Living for Ahold Delhaize USA. Prior to her assuming her current role in early 2018, Furrow spent six years with Walmart as senior director of sustainability for the global food business. “Sustainable chemistry is a complex and evolving topic, but one that Ahold Delhaize USA and its companies are committed to addressing in collaboration with others in the best interest of consumers.” |
Walgreens to do drone deliveries in West Virginia The future of drone deliveries may be determined by the rough 20,000 residents of Christianburg, WV. That’s where Walgreens and Alphabet’s Wing Aviation unit will begin drone deliveries of a limited assortment of 100 non-prescription products. Ahead of the launch, an awareness campaign is planned that includes drone delivery demonstrations. Walgreens said it is the first U.S. retailer to offer an on-demand commercial drone delivery option. |
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The labor market is so tight that.... Smithfield Foods has launched an apprenticeship program that promises participants free college tuition, salary and benefits as they progress through the program. The $15 billion global food company is looking to develop the next generation of skilled tradespeople with a program that provides internal candidates, high school graduates and military veterans with hands-on engineering and mechanic training while earning their associate degree. Smithfield launched the program at Wayne Community College in Goldsboro, North Carolina, and plans to expand the initiative nationwide by partnering with colleges near Smithfield facilities. |
The holiday forecasting season before the season Deloitte continues its holiday tradition of being among the first to release a forecast of holiday season growth, predicting a 4.5% increase this year. Similar prognosticans will now start coming fast and furious and its a safe bet that most will envision a figure similar to Deloittes. It's safe given the relative health of the economy and important variables such as low fuel costs and unemployment. The fact that Thanksgiving falls very late this year (Nov. 28) and compresses the traditional holiday selling season won’t be a factor the way it would have a decade ago. That’s because sales tend to be front loaded with holiday promotions starting in early November and e-commerce diminishing the importance of a timeframe that once played a major role in seasonal outlooks. |
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Only five retailers made Fortune’s list of the 75 Best Large Workplaces for Women and none made the list of the 25 Best Small and Medium Workplaces for Women. Included on the large company list were Wegmans(3), Publix(11), Burlington Stores(39), Sheetz(58) and Cumberland(73). The poor showing by retail isn’t as bad as it seems. Only those companies who allow Fortune’s research partner, Great Place To Work, to survey their employess are eligible for inclusion on the list. |
In an extremely tight labor market, Network of Executive Women (NEW) CEO Sarah Alter has some choice words for retailers and CPG companies looking to hire Gen Zers who place a high priority on diversity and inclusion practices. |
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Former Tesla and Amazon executive Sanjay Shah has joined Beyond Meat as COO. Shah was SVP of energy operations at Tesla for roughly a year but prior to that he spent seven years at Amazon, last serving as VP of North American Fulfillment Centers. |
Ulta Beauty named Mike Smith, president and COO of Stitch Fix, to its board. Smith also previously served as COO at Walmart.com and is on the board of Herman Miller. |
Another former Walmart executive, Michelle Gloeckler, will join the board of BJ’s Wholesale Club. She most recently served as chief merchant at Academy Sports & Outdoors and prior to that held merchandising roles with Walmart. BJ’s also said former investment banker Maile Clark joined its board. The additions comes as Nishad Chande, Kristofer Galashan and Lars Haegg step down from the board, as the company has completed the transition to a fully independent public company from private-equity ownership. |
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Groceryshop consumed all of the industry’s oxygen last week, but earlier in September, The Good Food Conference is where food retailing’s plant-based innovators gathered. The Good Food Institute held the event Sept. 4-6 in San Francisco and posted videos of all the sessions on its web site. Walmart said it would stopped selling e-cigarettes citing growing federal, state and local regulatory complexity and uncertainty. However, it plans to sell through its current inventory first before exiting the business. Grocery wholesaler Krasdale Foods is giving the independent retailers its serves the same advantages as major operators such as Target and Kroger. The company relaunched its line of 1,000 private brand products with a new logo and simpler and streamlined package design. The rollout is due to be completed by January and comes as Target recently announced its largest ever private brand food launch with Good & Gather and Kroger has moved aggressively into plant-based categories with its Simple Truth brand. The California Milk Processor Board (CMPB), creator of the iconic got milk? campaign, has teamed up with comedy video website Funny or Die, to draw attention to milk myths. The groups have released “the Mooer Report,” a spoof The Mueller Report that lampoons fake milk news. |
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