HOUSTON, TX - CEO of Sysco Bill DeLaney released a statement following Federal Judge Amit Mehta's ruling earlier this week, in which Judge Mehta announced that he felt the Federal Trade Commission had proven that a merger between Sysco and US Foods would limit the margin for competition in the foodservice market.
"While we respect the Court's decision, we are profoundly disappointed with this outcome,” DeLaney said, according to a press release, adding that the company has diligently pursued the transaction with US Foods for nearly two years out of a strong belief that it would be procompetitive and good for customers, associates, and shareholders.
As we previously reported, the FTC filed an antitrust lawsuit to block the merger beause the two companies are the largest in the foodservice industry, causing worry for a potential monopoly. While the companies argued it would actually present more opportunity for competition, Judge Mehta disagreed.
DeLaney stated that Sysco understood this was a possible outcome and has been developing plans to move forward.
“We will take a few days to closely review the Court's ruling and assess our legal and contractual obligations, including the merits of terminating the merger agreement,” he said. “This work will be conducted in close collaboration with Sysco's Board of Directors and the primary owners of US Foods.”
As to which way the company is leaning, DeLaney only said that it would provide additional clarity in the coming days.
WENATCHEE, WA - It’s the peak of the Northwest cherry season, and CMI is hitting its stride with a new cherry line designed to increase productivity and address the growing program for the Wenatchee, Washington-based company.
Bryon McDougall, Director of Operations for McDougall & Sons, Inc., took the time to talk with us about the company’s latest integration of this packing technology.
Bryon tells me that the company is now able to produce better packaging than if it were relying on hand-sorting, explaining that the company is now projecting 14 tons of cherries an hour as opposed to last year’s 10 tons.
To see this latest sorting and packing approach in action, and hear my entire interview with Bryon, watch the 90-second video above.
WASHINGTON D.C. - Bring out the POS’s and lock in your promotions. It looks like, according to the Wall Street Journal’s (WSJ) Josh Mitchell, consumers are looking to spend.
According to Mitchell’s recent report on U.S. Department of Commerce’s personal income and outlays report for last month, seasonally adjusted personal spending across the board spiked about 0.9 percent, the most significant jump since August of 2009.
“U.S. consumers are back in the game in a big way,” Millan Mulraine, a TD Securities Economist, said in a note to clients, according to the report. “The robust rebound in spending provides some much needed confidence that the economic recovery is continuing to build on the positive momentum of recent months.”
It looks as though the desire to spend could be correlated with having the increased budget to do so. WSJ reported that personal income saw a healthy back-to-back increase for both April and May of this year.
“Personal income, including wages and government aid, climbed 0.5% in May after rising at the same pace in April,” Mitchell writes. “That marked the best two-month increase in incomes since early 2014 and suggested a firming labor market is leading employers to slowly raise wages.”
The window, however, could be a brief one. Patterns reportedly suggest that after big surges spending tends to recede, and while wallets grew a bit over the last couple of months, the Department of Commerce also found that savings accounts decreased.
For the time being, however, it appears to be some good news for economic spending.
To read Josh Mitchell’s full article for the Wall Street Journal, click here.
MORGAN HILL, CA - Sakata Seed America is doing its part to ‘Go Green’ and conserve water during the California drought. As we all know by now, the drought has taken a substantial toll on the entire state; however, both the agricultural and horticultural industries have been hit particularly hard.
In response to the drought, Sakata has made it a priority to focus on ways to reduce its water usage and boost long-term sustainability for the future. In 2014, Sakata completed two main projects to conserve water at the Morgan Hill office headquarters. First, 12,500 square feet of turf was removed and replaced with drought-tolerant plants and landscape coverage. The company has also reported it has removed the overhead sprinklers and replaced them with a low-volume drip system, creating an estimated water savings of 300,000 gallons of water annually. For the remaining turf, complete irrigation updates were implemented, and over 275 sprinkler nozzles were upgraded to a weather track system which reduces water when it’s not needed, resulting in an additional 50,000 gallons of water conserved annually.
Now for this year, Sakata has already begun its next phase of water reduction, already removing 16,088 additional square footage of turf from the front of the company’s headquarters. The turf has been replaced with a new, drought-resistance landscape and low-volume drip systems. Even further, Sakata’s internal committee, ‘GreenUp,’ which is solely dedicated to creating a greener work environment, has plans for facility upgrades include water-saving restroom updates such as touchless faucets.The committee is also distributing free shower buckets to all interested employees, according to a press release.
Sakata’s water conservation efforts have not gone unnoticed, the company says. In September 2014, Sakata was deemed the title of a ‘Water Saving Hero’ and presented a plaque by the Santa Clara Valley Water District. Known for its ‘Brown is the New Green’ campaign, the county has been encouraging water conservation by distributing free ‘Brown is the New Green’ lawn signs, shower buckets, moisture meters, shower timers, shower heads and hose nozzles for Santa Clara county residents.
“It’s part of our responsibility to the community and the industry to conserve water and lower our carbon footprint. We are proud of our efforts thus far, but are determined to take it further and become a role model for other companies,” says Tye Anderson, Senior Logistics & Operations Manager for Sakata.
Sakata’s GreenUp committee’s future plans stretch far beyond lessening water usage and focus on sustainability as a whole. Long-term goals include such workplace additions as bike racks and charging stations for electric cars.
MINNEAPOLIS, MN - Target has announced that Kathee Tesija, the company’s Chief Merchandising and Supply Chain Officer, is stepping down.
According to a statement from CEO Brian Cornell, Tesija will move to an advisory role on July 6 and then leave Target next April. Tesija has worked at the retailer for almost three decades.
This is the latest executive shakeup under new CEO Cornell. According to Bloomberg, he has already eliminated about 2,000 jobs at the company’s headquarters and shut down Target’s unprofitable Canadian division since his appointment in August. His plan to help reignite growth at the company includes more health food and wellness products, in addition to smaller stores.
“Over the past several months, Kathee and I have had many discussions about the business and together have decided that it is the right time for her to transition to an advisory role,” Cornell said in a statement. “In this role, she will spend the next several months contributing to key enterprise initiatives and ensuring a smooth transition of her responsibilities.”
In the interim before a replacement is found, Tesija's team will report to Cornell, said Dustee Jenkins, a company spokeswoman. She will receive severance pay of $4.44 million, according to a company filing by the company.
PLEASANTON, CA and BOISE, ID - Having signed the final papers on a merger in January, Safeway-Albertson's is shifting some things around as they acclimate to each other's business approaches. In the latest edition of AndNowUKnow’s print publication, The Snack Magazine delves into the decentralized model the newly-joined companies are persuing and what this means for suppliers.
Check out The Snack article by clicking here, or read the full article below:
Safeway-Albertson's Decentralization >> Who Is Affected?
If there’s one word I keep hearing about the Safeway-Albertson’s merger, it’s got to be “opportunity.”
The multi-billion dollar deal between the two retail giants has been fraught with uncertainty since the day it was announced. Skeptics have long scrutinized the new procurement scheme, calling attention to Safeway’s mismanaged regional banners like Dominick’s and Albertson’s elaborate decentralized operation. A popular argument among optimists suggests that suppliers will have more opportunity than ever before. After all, Safeway’s centralized structure meant merchandising was always its forte, while Albertson’s decentralized operation has precipitated local and regional success.
In comparing the two, Albertson’s complex decentralized operating structure has entrusted each of its division offices with all of the financial responsibility and decision making authority, whereas Safeway’s corporate office in Pleasanton, CA, has held the most influence. Now that the two entities have combined, Albertson’s decentralized model will be the foundation of the merged company’s marketing and merchandising efforts. With the deal finalized, the questions still left on everyone’s minds are: Who’s going to be affected and what can we expect from a decentralized company?
Spanning three regions and fourteen retail divisions, the combined company will have two primary offices in Pleasanton, CA and Boise, ID, both of which are further supported by the accounting and call center offices in Phoenix, AZ. This decentralized model allows suppliers to form their own relationships with divisions of their choosing in hopes of getting products in certain regions, rather than being forced to go through a single corporate office. The goal is to have a clear, transparent, and efficient supply chain that gives suppliers an opportunity to build partnerships and customers access to products in demand. This enhanced distribution and supply chain also opens the door to a greater selection of offerings, as well as more robust fresh produce options.
A Middle Ground
To put it into perspective, Albertson’s and Safeway are looking for a middle ground approach in terms of how many and which items they should contract. On one hand, Safeway had plenty of contracted items, but on the other hand Albertson’s had very few – bagged salads and bananas, for example. Some commodities could be up for re-negotiation, signaling an opportunity for new supplier relationships to be formed and more product differentiation over several divisions. With the combined company, suppliers, large and small, can nurture their own independent partnerships with up to fourteen different divisions. That’s fourteen more possible avenues to move product and increase sales. It’s a much more level playing field. Together under a decentralized model, Albertson’s and Safeway are less likely to be a one-size-fits-all company. Suppliers can survive on “base hits” with several regions as opposed to a “grand slam” with one corporation.
That isn’t to say all companies will benefit from a decentralized operation. Fresh cut programs will be affected because Albertson’s does its own cut fruit. For companies that do their own value-added programs, it’s all based on what their product line looks like. If Albertson’s decides to do its own cut broccoli, for example, companies with value-added broccoli programs will need to offer an alternative to differentiate their line.
Relationships Are Key
If there’s one thing you should take away from Albertson’s and Safeway’s decentralized model, it’s this: It’s going to take a lot of work and coordination between your company and these fourteen divisions. For the sales management team that puts together the ads and programs, relationship building will be the key to getting your products in stores, especially in this environment. Depending on the procurement buyer or manager, it stands to reason they would much rather conduct business with a company based on prior history.
From a customer standpoint, it’s going to be business as usual. As a shopper, when you go to a store in Phoenix versus one in Denver, for example, you are still going to get a similar experience from a branding standpoint, though each store can have their own wares. Promotions, however, are going to be specific per demographic and division. Consumers also benefit from the merger through the potential for more price reductions and in-store remodels and refurbishments.
A Diverse Network
Since the merger’s completion in early 2015, Albertson’s and Safeway executives have continually praised the results, reiterating the improved shopping experience.
Robert Edwards, former President and CEO of Safeway and current Vice Chairman, said in a press release, “We plan to be the favorite local supermarket in every community we serve. We will do this by knowing, listening to, and delighting our customers; providing the right products at a compelling value; and delivering a superior shopping experience. We will also continue to be active members of our local communities.”
Bob Miller, the CEO of Albertson’s, New Albertson’s, and Safeway, shared a similar sentiment, noting in a press release, “This merger creates a unified, strong organization that is dedicated to bringing a better shopping experience to more customers across the country. Our combined geographic footprint, vast range of brands and products, and service-oriented staff will enable us to meet evolving shopping preferences.”
The merger will create a diversified network that includes 2,230 stores, 27 distribution facilities, and 19 manufacturing plants with more than 250,000 employees across 34 states and the District of Columbia.
Below is a list of the Division Presidents for the newly combined company, who will report to the Chief Operating Officer for their respective regions.
- Dennis Bassler, Portland Division, North Region
- Paul McTavish, Denver Division, North Region
- Susan Morris, Intermountain Division, North Region
- Tom Schwilke, Northern California Division, North Region
- Dan Valenzuela, Seattle Division, North Region
- Shane Dorcheus, Southwest Division, South Region
- Scott Hayes, Southern Division, South Region
- Lori Raya, Southern California Division, South Region
- Robert Taylor, United Division, South Region
- Steve Burnham, Eastern Division, East Region
- Jim Perkins, Acme Division, East Region
- Jim Rice, Shaw’s Division, East Region
- Mike Withers, Jewel-Osco Division East Region
Since the completion of the merger, Albertson’s and Safeway have sold 146 stores in Arizona, California, Nevada, and Oregon to Haggen Holdings, LLC; two Albertson's stores in Washington to Supervalu Inc.; twelve Albertson's and Safeway stores in Texas to Associated Wholesale Grocers, Inc.; and eight Albertson’s and Safeway stores in Montana and Wyoming to Associated Food Stores Inc. Among these, Haggen was the biggest surprise, but it will remain to be seen how a relatively unknown grocer can compete in heavily saturated markets.
Over the past year, we watched as the Albertson’s and Safeway merger became a reality. As the dust settles, the outlook for many industry members continues to be an area of contention that we will continue to observe. Despite the number of uncertainties this merger brings to the market, one thing remains clear -- a merger of this scale will require significant, radical changes to succeed and prove profitable.
YAKIMA, WA - Domex Superfresh Growers® is now showcasing its latest cherry packing capabilities in a new video. Over the past year, Domex has been working to implement two new state-of-the-art cherry packing lines near its Eastern Washington orchards. Now in production, Superfresh Growers is already seeing improvements in quality, pack accuracy and speed-to-market.
You can watch these new cherry lines in action in the video above.
“Not only are we able to deliver a higher quality pack into the marketplace we are doing so faster and more efficiently than ever before," said Howard Nager, Vice President of Marketing for Domex Superfresh Growers. “Our retail partners can expect improved store level performance and a better eating experience for consumers.”
The new lines are able to clean, sort, size and package over 40 tons of fresh Northwest cherries per hour, and feature advanced imaging and infrared technology that more accurately segment cherries by size and quality characteristics. According to a press release, newly engineered hydro-delivery networks also help to reduce pitting and cherry bruising.
LEAMINGTON, ON - The 9th annual R.E.A.C.H. International Greenhouse Competition took place last weekend, and Pure Flavor proudly walked away with the event’s “triple crown.”
“It is an incredible achievement to have selected the best cucumber seeds and to have won 3 main categories in the cucumber division,” Jamie Moracci, President of Pure Flavor, said in a press release, adding that the company tests hundreds of cucumber varieties each year that are available in the marketplace.
Pure Flavor’s Gourmet Baby Mini Cucumbers received recognition in two categories for the second year in a row, winning an award for Best Overall Mini Cucumbers and Best Overall Cucumbers. Its Poco™ Bites cocktail cucumbers, the company’s newest item that we recently showcased, also received the Kid’s Choice Award.
According to the press release, the second day of judging is based on public opinion while the first day is judged by a panel of expert judges represented by produce retailers, agricultural research centers, local chefs, and food writers. The panel rated each entry on four categories:
- Appearance
- Flavor profile
- Crunchiness
- Freshness
R.E.A.C.H. International is a local charity that has raised hundreds of thousands of dollars to help build schools, and clinics, as well as drill water wells, care for and sponsor impoverished children in Uganda, Africa, and more. All funds from the Greenhouse Competitions go to benefit this noble cause.
To find out more, go to www.hottesttomato.com.
CALIFORNIA - With both quantity and quality up for broccoli right now, this may just be the perfect opportunity for retailers to take advantage of for the upcoming summer holiday season.
“Right now there is low market pricing—demand is low and volumes are high,” Commodity Manager for Tanimura & Antle, Janelle Seebeck, tells me. “We expect volumes to drop off next week, however, and we are hoping for heightened demand, especially for the 4th of July.”
Retailers looking to capitalize on these great ad and promotional opportunities can use this opportunity to drive consumer buying behaviors, and growers can look forward to the market firming back up in the near future.
“Last year we saw the market dip in July, but this year our annual dip happened a month earlier,” D’Arrigo Brothers Sales Associate Ben Wilson adds. “This decrease in demand for Californian broccoli is typical for this time of year, unfortunately, it seems to be happening a bit sooner. By next week, our volumes should adjust to meet demand and the market should firm back up.”
As of June 24, 2015, the USDA reported broccoli prices out of Salinas—Watsonville, CA as the following:
- $6.00 - $9.50 for bchd 14s sizes
- $6.50 - $9.55 for bchd 18s sizes
“In general, the broccoli market is flooded with product right now, so the market price is down,” D’Arrigo Brothers Sales Associate Ben Wilson adds. “Tropical Storm Blanca caused temperatures to be warm and humid, especially at night, making for a lot of growth. Fortunately, D’Arrigo has had decent demand to get through these increased volumes,” Ben says.
Another bright side has emerged in this tale too, however. Quality for the abundant commodity is looking better than ever.
“There has been excellent quality. This past week the majority of our broccoli was all harvested in one cut, when normally it will take two or three cuts,” added Janelle.
Ben also echoed this sentiment, agreeing, “Quality has been excellent. As we head into these extra volumes, D’Arrigo is doing everything possible to keep this trend going.”
With the market looking up in Salinas, and retailers jumping on this great promotional opportunity, it looks like broccoli will be a commodity to watch.
ROSEMONT, IL - With the help of celebrity guests Matt Light, former New Englands’ Patriots player, and Chip Beck, a four-time winner on the PGA Tour, Reinhart Foodservice and its supplier partners raised more than $120,000 in charitable donations during the Traditions Sales and Merchandising Conference.
During the raffle, online auction, and live auction, guests had an opportunity to win a number of event prizes featuring sports memorabilia, event tickets, travel vouchers, and state-of-the-art electronics, according to a press release. Proceeds from the event will benefit the Light Foundation and Feeding America®.
Light, Founder of the Light Foundation, helped facilitate the live auction. In a press release, he stated how appreciative he was of the support from Reinhart, its employees, and its supplier partners.
“At this year’s auction, they really stepped up to help the Light Foundation,” said Light. “The generous donation we received will fund critical programs for at-risk kids who really need assistance. I couldn’t be more grateful for their generosity.”
Jeff King, Reinhart President and COO, also gave his thanks to the company’s employees and supplier partners for contributing to the event, Feeding America, and the Light Foundation.
“Our organization is committed to giving back to the communities in which we serve, and we were blown away at the results of this year’s auction and donation efforts,” he said. “We want to thank all of the donors and participants for their generosity and record-breaking contributions.”
This is the third year Reinhart has hosted the charity auction, and the event has grown each year.