BENTONVILLE, AR - Sam’s Club has announced a new focus, the company says, with an emphasis on being less like its discount competitors, and instead provide more upscale options.
“We want to be less of a Wal-Mart,” Rosalind Brewer, President and CEO of Sam’s Club told the Wall Street Journal.
The retailer’s new strategy will mean having to streamline its product lines to include fewer items that appeal to households that earn $45,000 a year, something Wal-Mart is known for, and instead tailor its offerings towards wealthier shoppers with more organic food, brand-name clothes, and 1,000-thread count Egyptian cotton sheets, Brewer mentioned in a recent interview.
Some analysts believe that Sam’s struggle stems from club stores shifting to a wealthier clientele who are able to afford sharper membership fees, but Brewer doesn’t agree, commenting, “a winning model is when Wal-Mart operates in their lane and Sam’s in their lane.” Most of Sam’s products are already different than Wal-Mart’s, but when Sam’s sells single deodorants or Wal-Mart sells five pound bags of frozen strawberries, the two stores are competing, she told the New York Times.
For the past five years, Sam Club’s growth has lagged behind Costco’s, with total sales at Sam’s hitting $58 billion last year ,while Costco booked $110 billion from its 664 global stores. Costco has done well in part because it focuses its stores around wealthier urban areas and along the country’s coasts. Costco also ventured further into the organic food category, now selling $4 billion worth of organic products a year, said Richard Galanti, CFO for Costco.
The next venture for the company, the Wall Street Journal reports, will be tests for a high-end Sam’s banner in two regions. The retailer will be testing more individual prepared meals, pricey furniture, apparel, and food alongside the bulk products the company is already known for. The hope is that this test will allow a small team of Sam’s buyers to practice selecting products with wealthy consumers in mind.
Stay tuned as AndNowUKnow continues to cover Sam’s Club current trajectory.
CARPINTERIA, CA - Hollandia Produce, a long-time supporter of the Future Farmers of America (FFA) and local food banks has donated yet again to help hungry families in need. Hollandia has provided food for Ventura FOOD Share and donated nearly 100,000 heads of its signature living butter lettuce and living watercress to the Santa Barbara Food Bank.
“We believe strongly in giving back to our community,” said Pete Overgaag, Hollandia Produce CEO. Programs like FFA and the Food Bank are instrumental in shaping our industry and future in a positive way. If we can lend a hand along the way, we’re happy to do it.”
At the recent Ventura County Fair Live Stock Auction, Hollandia Founder Art Overgaag placed the winning bid for Alfonso Perez’s hog, which was then immediately donated to the Ventura FOOD Share, a non-profit food bank. Perez, a 16 year old Carpentaria High School student and an active member of the FFA, raised the hog he named “Boots” for the last five months and found solace in knowing the animal will help feed needy families.
“I was placed in the program [FFA] initially, but then I quickly discovered it was my passion,” said Perez. “It’s a great program and it really teaches me about responsibility. We are told early on not to get attached to the animals, but I did. So, today it was sad and hard to let go.”
Perez said in a press release that he will use the proceeds from the sale to help fund his future college education.
FOOD Share owns and operates 26,482 square feet of warehouse space including a 1,176 foot cooler and 1,176 square foot freezer, one loading dock and 15 trucks. For every day of operation, FOOD Share processes over 31,000 pounds of donated food.
CHELAN, WA - A series of wildfires swept through 100,000 acres nearby Chelan this past weekend. Firefighters and emergency officials quickly responded to the blaze, which threatened at least “160 homes and several businesses,” according to the Seattle Times.
The fires have currently been contained in Chelan, through firefighters are continuing to deal with blazes in other nearby areas.
Chelan Fruit Cooperative was one of the businesses affected by the wildfires, where damages were estimated at $50 - $80 million, the Seattle Times reports. One packing facility and some storage buildings were lost to the flames, including several hundred thousand empty bins and boxes of apples harvested from this season and the last.
Mac Riggan, Director of Marketing with Chelan Fresh, said that the company is still operating, though its sales office has moved to the Brewster area as emergency crews work to restore communications.
“We’re currently dealing with the aftermath and we have a very resourceful staff in place at Chelan Fresh,” said Riggan. “We weren’t completely unscathed, but we’re confident that we’re going to be back in full capacity by Wednesday at the other Chelan Fruit plant that was not affected by the fire.”
According to local Washington news affiliate King5, a series of lightning strikes set off five separate blazes in the area.
“Our thoughts and prayers go out to our friends, family, and businesses that have been affected by the fires,” continued Riggan.
Fire crews are continuing to contain six separate fires burning in the nearby areas. The Seattle Times reports that more than 1,600 people have been evacuated as firefighters continue working to protect homes and slow the spread of the fires.
Stay tuned to AndNowUKnow as we continue to report any updates on this developing situation.
LOS ANGELES, CA - One of the risks in the fresh produce industry is what happens when the fruits and veggies are in transit. Reportedly, a grower typically has to wait 30 to 45 days after sending it off to see payment, unless the shipper trusts the product and pays a portion while it is in a figurative limbo. Produce Pay is a new company and concept that seeks to alleviate that transition for both sides.
“Ultimately we are a financial service company specifically focused on the produce industry,” Founder and CEO Pablo Borquez Schwarzbeck tells me. “I think it’s a very honest industry. I've always felt very endeared to it, and finding new ways to do business is really what this is all about.”
To learn more about Produce Pay, you can watch the company's short video below:
Pablo has produce in his blood. The fourth generation of a farming family in Sonora, Mexico, he knows all too well the difficulties distributors and growers face financially while fresh produce is in transit. But it was while working to receive his MBA in Managerial Finance at Cornell University that he came up with a strategic solution.
“I grew up on the farming side and I saw that cash flow was always a huge problem for farmers,” he said, explaining that the system the industry has fallen into puts a lot of weight and responsibility on the shippers. “Shippers are not a financial company, and it’s a lot to expect them to take on that risk.”
He saw a need in this traditional system, and when he met like-minded people at Cornell with farming and financial backgrounds he found a way to make it better. “We developed a software that can give us the market prices with or without an invoice. Based on the monetary value, we can fill the growers financial needs the next day without putting that pressure on the shipper, and the farmer can have that security.”
An important point Pablo made to me is that Produce Pay is not a bank and does not operate as one. Instead, it acts as an investor that shares the financial risk with the growers and shippers to help alleviate both while the product is in transit, never actually possessing the produce.
Because Produce Pay is a payment tool, when liquidation occurs it is paid through its system. After a 1 to 1.5% service charge, depending on the situation, full payment is wired to the grower.
“I grew up in the industry, I’ve seen how things are being done. The possibility to change an old problem in a traditional industry I love, to find new and better solutions and help promote it, that’s what it comes to in the end,” Pablo said.
Though it’s been in the making for a while, Produce Pay was officially incorporated in December of 2014, working with growers in Mexico and distributors in the U.S. Now it has the resources to expand.
To find out more about getting involved with this new approach to produce shipping, check out the company’s website here.
MIDLOTHIAN, VA - Wegmans is preparing new openings in Virginia, creating over 1,000 jobs in the state’s Greater Richmond area.
“We’re a family-owned company with job opportunities that offer flexible scheduling, competitive pay and benefits, and a friendly workplace,” Jerry Shelly, Wegmans Midlothian Store Manager and 26-year company veteran. “Soon after being hired, new employees are welcomed into our Wegmans family and they begin training to learn the skills, service, and product knowledge our company is known for.”
For the Midlothian, VA location, the retailer is hiring approximately 550 people, 500 of which it specified will be local hires and 200 that are full-time positions, the company shared. The 120,000 square-foot store will include a Market Café and a restaurant and bar called The Pub by Wegmans. Richmond-area ABC News 8 reports that Wegmans’ new Short Pump, VA location will also be 120,000 square feet, will have 550 full and part-time employees, with the majority being hired locally.
“We promote from within and we’re looking for good people who are ready to learn and grow a career with us. I’m proud to begin building the team that will bring incredible customer service to the Richmond area and Wegmans is eager to make a difference in this community,” said Shelly.
Available positions will include everything from entry-level management to customer service, culinary and restaurant service.
HOUSTON, TX - Sysco shares surged by 8 percent after CNBC reported that Trian Partners has taken a 7 percent stake in the company, worth approximately $1.6 billion, or 42 million shares. A 13-D filing officially disclosed the stake on Friday afternoon, according to CNBC.
A Sysco spokesman told CNBC that they are aware Trian has disclosed taking a significant stake in the company. The move would make Trian the largest individual shareholder in Sysco.
According to the Wall Street Journal, Trian has held brief discussions with Sysco’s Chief Executive and Chairman to find ways to return cash to shareholders, better align compensation with the company’s performance, and enhance the company’s value.
“We welcome collaborative discussions with investors who share our interest in creating value by marketing and delivering great products and services to our customers with exceptional service,” said Sysco spokesman Charley Wilson, according to Bloomberg. “We cannot speculate on Trian’s intentions or future actions.”
In June, the U.S. District Court of Columbia ruled in favor of the FTC’s request to block the merger between Sysco and US Foods, citing a “reasonable probability that the proposed merger will substantially impair competition in the national customer and local broadline markets,” said Judge Amit Mehta.
Shortly after, Sysco President and CEO Bill DeLaney decided not to pursue the merger, saying that it was in the best interests of all of its shareholders to move on. DeLaney said that the company will continue to search for strategic acquisitions that will enhance its shareholder value over time.
It is unclear if Nelson Peltz, CEO of Trian and activist investor, will be one of the representatives on Sysco’s Board of Directors. Peltz has held numerous positions in the food industry, with roles in Kraft, Mondelez, Wendy’s, Pepsi, and more.
CNBC speculates that since the board nomination window will close next Friday, there could potentially be three outcomes between now and then.
There could be an agreement between both sides next week or the company could extend the window to continue negotiating, CNBC reports. There’s also the possibility of a proxy fight, but Trian hopes that one will not be needed.
Sysco recently reported its Q4 2015 and full fiscal year financial results. The company beat analyst expectations on adjusted earnings for the quarter.
Stay tuned to AndNowUKnow as we continue to follow this developing story.
VERO BEACH, FL - Florida citrus company IMG Citrus has added industry veteran and former NFL tight end GT Parris to its North American sales force. Parris joined IMG’s sales team effective August 3.
“I missed the Florida Citrus business. It is what I have always known and loved. I had a great opportunity to get back in it with IMG and I jumped at the chance to work with an industry leader,” said new sales team member, Parris. “I really like their long-term optimism and dedication to the business.”
Since playing in the NFL for the San Diego Chargers, Cleveland Browns and St. Louis (Arizona) Cardinals, Parris has had a long career in the produce industry. Parris has spent the last year working for Nexus Produce in the role of marketing various produce items from Chile, but has also held positions at Greene River Citrus and Sunny Fresh Citrus.
“We are very excited to have GT join our team,” said IMG Director of Sales, Matt Reel. “He exemplifies our company values has a passion for the business.”
Reel continued by emphasizing his view that Parris will be an asset for both IMG and its customers.
HERMISTON, OR - River Point Farms’ Delbert Gehrke, Vice President of Farming; Jason Meyers, Farm Manager; Dan Jepsen, Agronomist; Bill Dean, Vice President of Quality Assurance & Sustainability; and Bob Hale, President and CEO, join us to share a behind the scenes look at their onion growing operations and harvesting practices.
Much of River Point’s onion program is about the prep work beginning with practices that take root in the fall each year. Each fall, the company plants its cover crop, which serves two purposes - first, to protect the soil in wintertime from soil erosion, and second, in the spring, it will protect the onion seedlings from the environment, namely wind.
River Point is currently planting its red onions. The company pelletizes this seed, so that it can go through the planter more efficiently, which in turn allows them more exact placement for a better and more uniform crop.
The company takes the application of its water very seriously. River Point has been nationally recognized for its water conservation efforts with the company’s low-pressure, center-pivot sprinklers and low impact sprinkler systems.
The storage process utilized by River Point begins in the fall when the company puts its first onions into storage. The storage temperature may be raised to up to 95 degrees in order to cure the onions and get the neck nice and dry. This can last for a time period of 1-3 weeks. The temperature will then be dropped by about 1 degree per day until the onions reach a holding temp of about 34-35 degrees. The company may store the onions at a temperature cooler than that if River Point decides to store the onions for a longer period of time that can run up to 10 months.
As for the company’s dry, skin-on, packaging facility, River Point is about halfway through construction of this latest project. The facility is about 80,000 square feet and will be completed, including an installation of all equipment, in early August of 2015.
River Point Farms is certified Non-GMO and is also certified Pesticide and Residue-free for all onions that the company grows.
OAK BROOK, IL - For the first time in over four decades, McDonald’s is closing more stores than it is opening for the fiscal year.
Bloomberg reports that the fast food chain is planning to shutter 59 stores across the country to try to revive sales and cut back on costs, bringing the 2015 count to 125 new stores, and 184 closing.
This is the second significant cutback for McDonald’s this month. As we previously reported, the chain announced that it was eliminating over 200 corporate positions at its Oak Brook, Illinois headquarters, for what it called a push to recapture profitability.
“In the U.S., we will have a net reduction in restaurants, but the impact is minimal in comparison to the 14,000 restaurants we operate across the country,” Rebecca Hary, Director of Global Media Relations at McDonald's, told Bloomberg. “We consistently review our restaurant portfolio and make strategic decisions to better position our business for the future.”
The chain has been testing out different formats to recapture the public palate. As we previously reported, the company is testing a heavier emphasis on fresh produce with gourmet breakfast items in Australia, as well as lettuce burger buns in both Australia and Korea. The company has not yet brought these fresher items to the U.S., where Bloomberg states McDonald’s receives 32 percent of its revenue and where it has seen a drop in same-store sales for seven quarters straight.
Will these large moves and a fresher focus be enough to turn everything around? Closing units, a recent focus for CEO Steve Easterbrook, could reportedly reduce expenses at the very least.
AndNowUKnow will continue to report on this story as it develops.
INDIANAPOLIS, IN - Following the recent momentum of the Grapery’s Cotton Candy Grapes, the company is now joining The Produce Mom Family of Partners.
"Grapery is honored to join the Produce Mom Family of Partners," states Jim Beagle, CEO of Grapery. "We focus our marketing efforts on talking directly to the consumer. The Produce Mom is a natural fit for us and a unique influencer for our industry – a true advocate and champion for fresh produce."
In this partnership, the focus will be on educating consumers about selecting, storing, and serving grapes—particularly Grapery’s popular Cotton Candy Grapes.
The partnership officially began this past Tuesday during Lori’s monthly IndyStyle appearance, according to the press release, where the Grapery’s Cotton Candy Grapes were prominently featured. You can watch her appearance on the morning show below:
Within 24 hours of the show’s live broadcast, The Produce Mom says she received over 100 social media and website inquiries from consumers wanting to know where they can purchase Cotton Candy Grapes.
"Cotton Candy Grapes are the most buzzworthy item in the produce department right now. Consumers want to try this grape, and they want to know how it tastes like Cotton Candy," says Lori Taylor, Founder of The Produce Mom.
Lori continued by saying she's excited to work with Grapery, calling it a brand dedicated to flavor and innovation.