MINNEAPOLIS, MN – Target is moving to close all 133 of its Canadian stores. CEO Brain Cornell shared that despite the “tireless work and determination” of Target's Canadian team, Target Canada was unlikely to become profitable until 2021 at the earliest. In light of that timeline and after disappointing holiday retail numbers, Cornell came to the conclusion that it was in the retailer's best interest to close the operation in its entirety.
“Simply put, we were losing money every day,” Cornell shared on Target's blog, A Bullseye View. "After consulting with many leading third parties and carefully weighing the realities of the situation facing us in Canada, we decided that Target Canada would file for what is known in Canada as the Companies’ Creditors Arrangement Act (CCAA). It was the best option available to enable us to wind down our operations in Canada in a fair and orderly way.”
“We conducted a very comprehensive review and evaluated every possible option in Canada,” he continued. “Ultimately, after extensive internal due diligence and research, paired with counsel from outside experts, we fulfilled our obligation to do what was right for our company and our shareholders, and made the decision to exit Canada.”
Expanding too quickly had overextended Target's supply and support networks, leaving many stores with inventory issues and with numerous pricing issues. Even as Target's team worked to make improvements and correct some of these problems, challenges remained and customer perception of Target's Canadian brand suffered.
“We missed the mark from the beginning by taking on too much too fast,” Cornell explained. “Our stores struggled with inventory issues and we were not as sharp on pricing as we should have been, which led to pricing perception issues. As a result, we delivered an experience that didn’t meet our guests’ expectations, or our own. Unfortunately, the negative guest sentiment became too much to overcome.”
According to Kevin Sterneckert, Chief Marketing Officer for Order Dynamics, Target also underestimated the sheer diversity of the Canadian consumer base.
"A major issue in Canada is geography," he explained to USA Today. "The nature of the consumer in Canada changes dramatically depending on what region of Canada you're in."
According to CBC, Target has named SVP and Treasurer Aaron Alt as CEO of Target Canada, tasking him with the duties of overseeing the company's wind-down operations. International consultancy company Alvarez & Marsal has been hired to assist with this liquidation process.
In order to support its team during this difficult transition, Target has established a C$70 million trust, to provide “nearly all Target Canada employees with a 16 weeks of wages and benefits coverage.”
Investors reacted favorably to this news, driving up the company's stock $2.97/share to $76.99/share at the market's open on Thursday, January 15th, 2015.
Stay tuned to AndNowUKnow as we continue to track this situation as it develops.
VENTURA, CA – LINKFRESH and Hitachi Solutions have joined together to deliver LINKFRESH SRP on the Microsoft Dynamics AX platform to The Fresca Group.
This service is expected to deliver major benefits across the business in finance, operations and commercial.
Fresca Group is the U.K.’s largest independent fresh produce organization with sales in excess of $750 million, according to a press release. The companies in the group have differing fresh produce interests, from grower to wholesaler on the full supply chain, importer to ripener and packer to logistics expert.
“We selected LINKFRESH and Hitachi Solutions because their expertise combines the Microsoft AX suite of programs with the best industry-specific software, supported in its deliver through a leading systems implementer. Once the team has deployed the system, all core processes will be managed together – improving reporting, eliminating manual intervention and reducing costs,” says Mike Musk, Group Finance Director at Fresca Group.
This multi-million dollar investment is codenamed Project Compass and will deploy the complete LINKFRESH ERP suite to approximately 800 users across multiple locations in four core Fresca businesses – Mack, MMG CITRUS, DGM Growers and Thanet Earth Marketing.
Nikki Scarr, LINKFRESH COO, said, “We are very excited to be deploying our LINKFRESH ERP solution for one of the U.K.’s leading fresh produce organizations who are a major part of the fresh food chain in Britain and beyond. The fresh food industry expertise and Microsoft Dynamics AX software development skills of our LINKFRESH team, in partnership with the world class project implementation experience and methodologies brought by Hitachi Solutions, will deliver a winning combination to ensure a successful deployment.”
The LINKFRESH and AX solution is being implemented for Fresca by Hitachi Solutions. That company was selected because of its process driven implementation approach and experience with large scale Microsoft Dynamics AX deployments.
In the latest edition of AndNowUKnow’s print publication, The Snack Magazine, we spoke with PRO*ACT's President Max Yeater, exploring the dynamic distribution company's latest ideas, initiatives, and much more. Check out The Snack article by clicking here, or read the full article below:
From the Field to the Boardroom
“I’d like to say it’s about working smarter not harder. But, my first experiences in this industry were born from hard work. It’s essential,” Max Yeater tells me. “I try and lead by example by showing people that I’m willing to get down and dirty. It is all of us in this together. Everyday.”
“My mom taught me the importance of hard work. She was a single mom, raising 2 kids. She sold her house so we could go to college. My mom has been my main influence and now being a parent, I understand what a wonder children are and the value of sacrifice and hard work. My son and daughter have changed my outlook,” Max smiles. “I wouldn’t have it any other way.”
Max has come a long way since his days as a bird dog working in Salinas, California. The industry veteran began with his feet in the fields as a produce inspector and now calls his most recent role home, as President of the distribution giant, PRO*ACT. I sat down and spoke with Max and listened to his journey from the beginning, where the roots took hold.
“From the beginning I have always had a fascination with the business. I knew I was destined for produce,” Max tells me. “Even in those early days, I knew I was building a foundation to succeed in the industry.”
Max came into PRO*ACT 3 years after the company was established in 1991, and with the strength and determination of the PRO*ACT team, the company has grown from a network of 6 distribution partners to the 50 it has today.
“I have been fortunate enough to be a part of our strategic growth as a company, while witnessing us come into our own,” Max notes. “When I first got on the desk buying produce, I’d call different suppliers in the industry. They’d ask ‘Pro-what?’ But, today the industry sees our value,” he laughs.
As the company continues to evolve, PRO*ACT is taking its value proposition to the next level by making the move into retail distribution.
“Our distribution network is uniquely positioned with our ability to reach 100% of the major North American markets, and to respond to the demand from retailers for fresher product,” Max reflects. “We have 50 independent local companies bringing 50 great entrepreneurial ideas to the table. Pulling this program together and creating what we’ve created is nothing less than amazing. It’s our #1 value to the entire value-chain. To have that for a supplier, for a fresh manufacturer, is worth its weight in gold.”
PRO*ACT has 3 different types of customers that make up its PRO*ACT Value Chain - distributors, suppliers, and end users. PRO*ACT’s value comes in its ability to get products to every major market and providing those distribution services for suppliers.
“The power of the network is our ability to bring together different facets of the industry and lead them towards the future,” Max notes.
While fresh produce has always been the perishable of choice for PRO*ACT, the company has expanded into other fresh products to bolster the retail initiative.
“We have some great minds here,” Max tells me. With a senior executive team that is passionate and creative in their thought processes, it’s no wonder PRO*ACT continues to raise the bar. “We look at every idea like it’s a good idea and it helps us better the business and the work culture. I know that I want to work at a place that I look forward to coming to everyday. It’s important to me that everyone here feels the same.”
“I’ve sat in their seats and I understand the challenges they go through. We still have a job to do, but I say let’s have a really good time doing it. Create a good culture and you create a good team environment,” he smiles.
Demand from the consumer has also changed, he tells me, and we are changing to adapt to the evolving consumer environment. “Today’s consumers want the ‘who, what, when, where and why,’ of their fresh produce. They want the knowledge behind product sourcing and how the item is delivered, packaged, and presented,” Max notes. “As the dialogue between the consumer and retailer changes, retailers are looking for different channels for delivering fresh product.”
Through PRO*ACT’s Greener Fields Together initiative, in-hand with its 70 distribution locations, the company has been able to address challenges ranging from locally-grown demand and logistics, to organic produce growth, and availability. Greener Fields Together is a collaboration of environmentally responsible parties, including farmers, distributors, retail locations, and foodservice operators, who have come together to make steady, measurable improvements in sustainability and food safety practices through all levels of the produce supply chain. The unique capabilities of this initiative alone, offer the industry a resource for enhancing their sustainability platforms and communicating their efforts to the consumer.
The company has spent more than 20 years tirelessly building its distribution network, allowing the company access to customers 6 to 7 times a week, where other channels typically cannot. As PRO*ACT continues forging ahead in both the foodservice and retail industries, the company hopes to continue building its distribution network while also staying true to its roots and drive towards innovation.
“It is an exciting time for us as we move forward and further advance our North American business strategy,” Max states. “As we continue to align with the goals of our foodservice and retail partners we will always be looking for that next opportunity to develop their programs and enhance our own.”
It isn’t hard to see that the PRO*ACT crew continues to bring a unique and beneficial culture to its organization, capabilities, and collaborations.
“Work hard, play hard,” Max tells me.
I couldn’t have said it better myself.
MINNEAPOLIS, MN – Is Target considering saying “sayonara” to Canadian retail? In light of the difficulties it has encountered in this venture, speculation has abounded in investment circles as to the possibility of a store sale.
Optimism was high at Target approaching the holiday season. After early signs of improvement in its Q3 2014 financial report, Chairman and CEO Brian Cornell commented, “In Canada, we’ve made improvements to our operations, pricing and assortment in time for the holiday season, and we’re eager to measure how our guests respond. The entire company is energized as we approach the peak of the holiday shopping season, and we are looking forward to delivering an outstanding store and digital experience to our guests.”
Canadian retail segment sales had risen 43.8% compared to the previous quarter. While an abundance of work remained, some analysts began to speculate Target had begun to turn a corner in Canada.
Recent analysis from The Street of Target Canada's holiday performance is far more bearish. Analysts predict a 20% gross margin for Target Canada, well short of the company's goal of 28%. Anecdotal evidence quoted by The Street also notes Target's continued logistics difficulties.
Noting the personal and professional ties between Cornell and Wal-Mart's President and CEO Doug McMillon, The Street's Brian Sozzi speculates that a store sale may be in Target's future. The precedent for this move has already been established with Target's transfer of 39 store leases to Wal-Mart during the company's initial Canadian expansion. In addition, Wal-Mart already operates 391 stores in the region and has the necessary logistics capacity to support the broad swath of Target stores it would be purchasing.
For now, however, these suspicions remain firmly rooted in the realm of the “what if?” Should concrete evidence of Target's plans emerge, however, you can count on AndNowUKnow to bring you the news first. Stay tuned.
PLANT CITY, FL – It has been cold in the Sunshine State, but Wish Farms’ Owner, Gary Wishnatzki, tells me that the recent Florida freezes have actually been a good thing.
“We haven’t had any issues with the cold at all. In fact, a short dip into freezing temperatures like we had last week can actually help to keep the quality and sugars up in the berries,” Gary tells me. “Of course, our growers have freeze protections like covers and overhead irrigation prepared if the temperatures were to ever hit a hard sustained freeze. Luckily for us, that was not the case.”
That is good news for Wish Farms with berry demand ramping up for Valentine’s Day. Gary says that production started a bit behind, but it has caught up and is looking good across the board.
“Volume is currently equal to last year’s numbers and should be increasing even further through the end of the month. We are anticipating great production numbers moving forward,” Gary says.
In terms of quality, Wish Farms is seeing optimal berries. For real-time information on quality, the company is currently conducting a traceability survey through its “How’s my picking?™” consumer promotion.
“We are getting about 100 surveys a day from consumers, and it is overwhelmingly positive with very few quality issues. It is always great to hear from the consumer to know what we are doing works,” Gary adds. “We also put resources into forecasting production with bloom count models. All of this gives us good information that we can pass on to retailers.”
Check out the video below for a deeper look at the “How’s my picking?™” promotion:
Looking to the future, Gary tells me that Wish Farms has very promising varieties on the horizon and to stay tuned.
LOS ALAMITOS, CA – The Wall Street Journal is going bananas for bananas!
In a recent article published in the Wall Street Journal entitled “Is the Time Right for Baby Bananas?,” Barry Newman focuses on the development of small bananas and their growth from a test case to a staple at Brooklyn, New York's Key Food store.
That store’s Produce Manager, Mario Marabello, first brought the “babies,” as they are known, into the store. In the beginning, their market was limited to customers who had sampled the banana internationally and were excited to re-experience the taste. This grew, however, until people who’d never ventured into the small banana market were giving them a try. It took off from there.
Dole Spokesman, William Goldfield, spoke to Newman about bananas at the New York Produce Show in December. According to a press release, Goldfield said that the Cavendish, the big banana in the U.S. market, is the “only banana consumers are comfortable with.”
Frieda’s President and CEO, Karen Caplan, gave Newman a different perspective. She spoke to him at the show saying that the U.S. banana market needs a “disruption,” adding, “Did people ask Chrysler for the minivan?”
This Wall Street Journal article comes as a result of an effort by the New York Produce Show to solicit coverage of the produce industry in the mainstream press.
PASADENA, CA - Some things do get sweeter with time.
Sun Pacific is debuting its newest product this month - Vintage Sweets Heirloom Navel Oranges. Harvested from Sun Pacific's most mature orange groves, these oranges are individually tested for high sugar content to ensure outstanding quality, and a superior, sweet eating experience.
“With high brix, exceptional color and a rich, sweet taste, we're very excited about the launch of our Vintage Sweets line,” Sun Pacific President Bob DiPiazza tells us. “It's a flavor brought to California in the early 1900s with the planting of the original 'Washington' variety navel orange trees. Some of the trees are as much as 80-100 years old and they produce our best eating, sweet and juicy oranges."
With specialized equipment on the packing line designed to test the brix level of each Vintage Sweet orange, Sun Pacific is able to assure retailers that each order will be filled with exceptional quality.
Vintage Sweets Navel Oranges begin shipping starting the week of January 19th initially in 6 count trays overwrapped in a tight shrink wrap. Sun Pacific will offer bagged Vintage Sweets starting in mid-February.
For more updates on Sun Pacific’s latest, keep it here on AndNowUKnow.
CHARLOTTE, NC - Now that the acquisition by Cutrale/Safra is completed, Chiquita has announced the closure of its headquarters in Charlotte, North Carolina.
The Charlotte Business Journal reports that recently named interim Chiquita CEO, Brian Kocher, told employees through a letter this morning that these changes are part of the transition to a privately held company.
“We wish to inform you to changes at the company that will result from our transition towards a more simplified and streamlined business model appropriate for the competitive markets we serve, and from a publicly listed company to a private enterprise,” Kocher stated in the letter. “The story of Chiquita’s relocation to Charlotte is a good one.”
Several key members of the Charlotte community have mirrored this sentiment. The Charlotte Observer reports that Charlotte Mayor Dan Clodfelter thanked Chiquita in a statement for its “contributions to the community during their time in Charlotte.”
Charlotte Chamber President Bob Morgan also spoke positively about Chiquita’s time in Charlotte saying, “We wish the very best to the company in its next chapter and to all the employees and their families.”
Chiquita was promised about $22 million worth of state and local incentives to locate its headquarters in Charlotte in 2011 on the condition that the company would stay there for at least 10 years. Mayor Clodfelter says that the new Chiquita leadership will honor promises made for the city incentives, according to the business journal.
The timing of the office closing has not been disclosed as of yet. Stay tuned to AndNowUKnow as we continue to follow this story.
CHICAGO, IL - Hamilton Partners has purchased Jewel-Osco’s headquarters for $23.7 million, which is approximately $128 per square foot.
Chicago Real Estate Daily reports that Hamilton purchased the 185,020-square-foot office building from Bethesda, MD-Based pension fund adviser ASB Capital Management.
For now, one key question remains. Will Jewel-Osco be relocating?
The news of this sale comes as Jewel-Osco’s parent company, Albertsons, is continuing its merger with Safeway.
This merger has created uncertainty in real estate circles about Jewel-Osco’s plans for its headquarters. According to property records, the retailer signed an 11-year lease in 2008 when it moved into the location.
Though Hamilton declined to comment of the specifics of Jewel-Osco’s lease to Chicago Real Estate Daily, it did say, “we feel confident that Jewel is going to be a tenant in the building long-term.”
Stay tuned to AndNowUKnow as we follow all of the potential changes as the Safeway/Albertson’s merger continues.
PROVO, UT - Want kids to eat their fruits and veggies? The secret might be a good game of dodgeball.
A study conducted by researchers with Brigham Young University and Cornell has revealed that kids who have recess before eating lunch consume 54% more fruits and vegetables than their counterparts.
“Recess is a pretty big deal for most kids. If you have kids choose between playing and eating their veggies, the time spent playing is going to win most of the time,” said Joe Price, the study's lead author and Economics Professor at Brigham Young University. “You just don’t want to set the opportunity cost of good behaviors too high.”
Cornell's David Just collaborated with Price for the study. Listen to him explain the duo's fascinating findings:
With a sample of 22,939 data points gathered over the course of 13 days in four separate schools, the researchers concluded that recess made all the difference. In addition to the 54% increase in produce consumption, Price and Just also noted a 45% increase in the number of children consuming at least one serving of fruits and veggies. As for the children that had to wait to have recess? Produce consumption actually decreased, according to Brigham Young.
Given the nutritional impact of produce consumption, especially for young people, the importance of work like Price and Just's cannot be understated. As the researchers themselves noted, “increased fruit and vegetable consumption in young children can have positive long term health effects. Additionally, decreasing waste of fruits and vegetables is important for schools and districts that are faced with high costs of offering healthier food choices.”
Stay tuned to AndNowUKnow as we continue to bring you the latest news and analysis related to the fresh produce industry.