AG News
07 Stockholders Meeting Held
AG & Purina make donation to CAAWS
Rouses Purchases New Orleans Area Sav-A-Centers (A&P)
Lightening the Load on Wash Day
The Flock is Growing!
U.S Health & Human Services Secretary Visits Associated Grocers
September 20, 2007
07 Stockholders Meeting Held
Associated Grocers Re-Elects Four to Board of Directors and Officers
Associated Grocers, Inc. held its annual Stockholders Meeting following the Fall Food Show on Thursday, September 20th at the Baton Rouge River Center Exhibition Hall. Among the matters on the agenda was voting on four directors to serve on the board for three-year terms (September 2007 through September 2010). Four current directors had terms set to expire in September and were eligible to be re-nominated and re-elected.
Please join Associated Grocers in thanking and congratulating these gentlemen on their past and future service to the company on the Board of Directors:
Mr. Randal LeBlanc - representing Pay-Less Supermarket, Inc. with seven retail locations in and around the Baton Rouge area. Mr. LeBlanc has been a member of the Board of Directors since 1998.
Mr. Harley Loy - representing Supermarket Operations, Inc. with seven retail locations in Mississippi and Louisiana. Mr. Loy has been a member of the Board of Directors since 1998.
Mr. Ronald Woods - representing Woods Super Market, Inc. in Vidor, Texas. Mr. Woods has been a member of the Board of Directors since 1994.
Mr. James F. "Jim" Crifasi - representing Hi-Nabor Supermarket, Inc. with three retail locations in the Baton Rouge area. Mr. Crifasi was appointed to the Board of Directors in January 2007 to fill the unexpired term of Mr. Sam Crifasi who voluntarily resigned from the Board.
Following the Stockholders Meeting, the board met and also re-elected all of its current officers for another term:
Chairman: Mr. Jim Russo
Vice Chairman: Mr. Frank Benedetto
Secretary: Mr. Randy LeBlanc
Treasurer: Mr. Darin Arceneaux
Assistant Secretary: Ms. Linda Nell
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September 20, 2007
AG & Purina make donation to CAAWS
Associated Grocers and the Nestle Purina Company were pleased to make a donation of pet food to the Capital Area Animal Welfare Society (CAAWS) at the conclusion of the Fall Food Show on Thursday, September 20th.
“Your contribution will enable us to make a difference in the lives of many animals here in southern Louisiana,” stated Greg Jones, vice president of CAAWS. “Because of your help, we will be able to help care for animals that need us the most. The lives of many dogs and cats will be saved because of your support. On behalf of all the volunteers of CAAWS, the animals we serve, and our community, I thank you for your care and compassion. You have helped us make a difference!
CAAWS is an all-volunteer, non-profit organization committed to the well-being of animals in the Baton Rouge community by adopting homeless animals, by teaching the community responsible pet ownership and the humane treatment of animals, and by promoting the practice of spay/neuter at all times. It has been serving the Baton Rouge community for over 28 years and cares for displaced, abandoned, and homeless animals.
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September 17, 2007
Rouses Purchases New Orleans Area Sav-A-Centers (A&P)
Associated Grocers, Inc. is pleased to share with you some exciting news about the expansion plans of one of our member stores. On Saturday, September 15th, many media outlets revealed that Rouses Markets planned to purchase a package of New Orleans-area Sav-A-Center stores, doubling the retailer’s size. Rouses’ Managing Partner, Donald Rouse, confirmed to vendors in a letter on September 16th, that, indeed, Rouse is in the process of acquiring 16 Sav-A-Center stores and expected ownership and operations of the stores to formally occur during October.
Mr. Rouse stated, “We are very happy that A&P chose to work with a Louisiana-based, family-owned and operated independent instead of a national chain. It’s important to the rebuilding process of South Louisiana that local companies like ours invest in our state.
“We’re proud to call Louisiana home, and we’re proud to play a part in the area’s recovery,” he added.
In recognition of the retailer’s acquisition, AG President/CEO J.H. Campbell, Jr., shared, “The type of investment being made by Rouse Enterprises is indicative of the entrepreneurial spirit that each of Associated Grocers’ independent retail members has displayed when making a decision in the furtherance of their business dream.
“It is evidence of the ‘I CAN’ attitude that our retail members possess and that we have seen recurring as members grow their individual businesses – with same store sales and through expansion into new marketplaces.”
Mr. Campbell also pledged AG’s support to ALL of its independent retail members throughout this transition, reiterating the company’s ever present business philosophy. “AG’s procurement, distribution and support teams earn the business of each retailer every day,” he explained.
“We are going to continue to service your needs in the manner that we currently do,” Mr. Campbell assured the membership. “We are planning for a seamless transition for Rouses newly acquired outlets … one which will not affect the level of support to all members.”
Transition
Associated Grocers has already put together a team to help in this transition, much as the company did in 2003 when Fleming Foods went out of business and many of its customers moved to Associated Grocers. In regard to that dramatic growth in business, AG Vice President Randy Fletcher reminded us, “After Fleming, there were 27 retail outlets with 65 million in annual sales to assimilate in a short period of time. These retail locations were spread throughout the region, not like the stores that Rouse is acquiring which are located within the primary service area.”
In outlining what this acquisition by Rouses would require, Mr. Campbell met with the management team and procurement staffs to note the importance of taking care of each retailer’s needs every day.
Rouses announced that it will be transitioning its existing Everyday Low Price program to its new stores, but it has agreements to temporarily service the acquired stores. Rouses will continue its commitment to stocking Louisiana products and is expected to also transition its new customer base to the private label brands.
“We understand what people from Louisiana eat … we understand the culture,” Mr. Rouse explained. “What they (national operators) have found difficult and couldn’t make work, we’ve done it and grown our business.
“I don’t think a chain from out-of-state can come in and understand what’s going on, and we understand it and live it,” he concluded.
Store Locations – Where Are The New Stores?
Rouses plans to keep open 14 of the New Orleans metro area stores it is acquiring, as well as two in Mississippi. It will close three stores – Slidell, Mandeville and Metairie locations situated near current Rouse locations. Additionally, one other location – an A&P store on Magazine Street in New Orleans – will immediately be sold to fellow AG retailer, Breaux Mart Supermarkets, Inc., who will operate it as one of its Breaux Mart Supermarkets.
When Rouses completes the purchase in October, it will mark the complete withdrawal of the Sav-A-Center and A&P brands from this market area. A&P is reportedly selling its Louisiana stores so that it can concentrate on its expanding presence in the Northeast portion of the country. It should also be noted that another AG member, Delta Food Mart, LLC, (the Sumich family) recently purchased a former Sav-A-Center location, which had been closed in the Baton Rouge area, and will be re-opening this location similar to the Oakpoint Fresh Market that they opened in Watson, LA last year.
Rouses’ management notes that it will work to keep the current staffing of the acquired store locations, and may possibly hire as many as 500 additional workers, so the retailer can continue its focus on customer service. Rouses will also look at future remodeling at some of the locations to better accommodate customer needs and the Rouses’ offering of specialty items. Rouses was already the largest independent grocer in Louisiana, and this purchase will turn the Thibodaux-based “Bayou Boys” into one of the largest grocery chains in the region.
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September 15, 2007
Lightening the Load on Wash Day
Industry Leaders Unveil More Environmentally Friendly, Concentrated Formulas
Remember several years ago when the detergent industry first made the change-over from powdered laundry detergent to liquid formulas … well, are you ready for the next big breakthrough in this market?? Right now, the switch is on to high efficiency, concentrated formulas of liquid washing detergents.
In fact, all of Procter & Gamble’s (P & G) liquid detergent brands are moving to a compacted formula, which will allow your store to have more shelf space – a much needed and valuable commodity – while also providing benefits for your customers and a better choice for the environment. P & G concentrated detergents will have twice the active ingredients that the regular liquid formula had … that means that a 100 oz. bottle of the new, concentrated formula will do the same number of loads that the 200 oz. bottle of non-concentrated liquid detergent did.
The transition to these new 2X concentrated liquids is being conducted in stages, and our area is at the forefront. Stage One began this month with shipments to the southern parts of the United States.
Benefits of Compaction
The benefits of compaction start with the use of smaller bottles, which provide for more efficient selling space, less out of stocks (because more product can fit on the shelf), and a reduction in the storage space needed for inventory (both at retail and at the Distribution Center).
Consumers should also enjoy the benefits of the more convenient, smaller bottles of concentrated detergents that are easier to handle and pour, and require less storage space at home … and in the shopping cart!
Additionally, the new compacted products will utilize less plastic – a 22 to 43% reduction in the amount of plastic used in packaging – and there will be less water in the formulas. These factors will have a positive impact on our environment!!
“The product compaction initiative truly underscores the industry’s commitment to sustainability and to providing products that are a good match for consumers,” notes AG Category Specialist Earl Babin. “In addition to smaller bottles using less plastic while delivering equal loads, the High Efficiency (HE) technology saves both money and energy.”
The cost benefits for companies such as P & G and Unilever will probably not come from increased sales. Detergent is a commodity-like product with household penetration of 98.5 percent and similar price points. The true cost savings for them will come from reduced amount of materials – plastic for bottles, cardboard for boxes, and diesel fuel for delivery.
The Future of High Efficiency
Many of the newer model washing machines were built specifically for these High Efficiency (HE) detergents. Over the last five years, shipments of front loading washing machines have tripled in the United States. HE machines use less energy by having less water to heat, plus laundry time is cut in half with these machines having the capability of doing twice as much laundry in one load.
According to The Soap and Detergent Association (SDA), HE machines can use as little as 20 – 50% of the energy used by traditional agitator washers because there is much less water to heat – thus the need for the low sudsing, quicker dispensing specially formulated HE detergents.
“Concentrated laundry products represent another example of how the cleaning product industry, through groundbreaking research, collaboration with ingredients and packaging suppliers, and innovative manufacturing practices, is living out its commitment to deliver valuable products to consumers while reducing their environmental impact,” according to the SDA.
P & G estimates that since its Tide line accounts for 40 percent of the laundry detergent market, reductions in packaging will create a savings of 22 – 44 percent in addition to lessened fuel costs and warehouse space.
Consumer Response
Still, many consumers are not aware of the HE detergents and some have even expressed confusion with this term, mistakenly associating the HE message with more effective cleaning. And as much as 60% of consumers polled have never seen/heard of HE laundry detergent.
“Consumers are smart and they will adjust,” Marie-Laure Salvado, external relations manager, fabric and home care at P & G, Cincinnati, told Brandweek.com in an a Sept. 4th article “P & G Concentrates on Converting Detergents.”
“Education is critical,” she continued. “It is crucial for consumers to know the bottle has been compacted.”
Gairy Stibel, CEO at New England Consulting Group, Westport, Connecticut added, “With a big price on a smaller bottle, there will have to be some learning that takes place.”
Improved packaging by P & G should help drive awareness and educate consumers as to the improved value in the way of increased loads. It should also be noted that HE detergents are an important prospect for larger sized families who do more laundry (7.0 vs. 5.6 loads per week).
In fact, once educated, consumers will see the improved value provided by HE detergents through an approximate 23% increase in loads [EX: 26-32 loads from 50 oz. equivalent]. Consumers will learn to expect to use less product and actually use less product in their wash.
And P & G’s “Going Ultra” TV ad states: “One small cap can get your whole wash clean. The smaller bottle is handy for you and uses less plastic, so it’s better for the environment. Now that’s Ultra cool!”
Product Lines Involved
P & G will make its new compacted liquid laundry detergents available in Tide, Gain, Cheer, Era and Dreft. This move to a 2X concentrated formulation means full replacement of the company’s liquid laundry detergent line-up. The 2X HE detergents will replace all 1X HE liquid products, so all sku’s will hard convert to 2X compaction. This change will also allow for new varieties and line extensions (scents, with Bleach, etc.) due to availability of shelf space.
Unilever has offered All Small & Mighty, a triple concentrated formula, for almost two years; this was the first major move to compaction. Unilever will now also move to all 2X formulas for ALL detergent.
The entire Purex line has now moved to 2X in the 32 load (50 oz.) and 64 load (100 oz.) bottles.
“This was an industry agreed upon change and all major brands will be involved,” Earl stresses. [As of this printing, Sun detergent is not rushing to market with the 2X product.]
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The Flock is Growing!
AG Receives Another Penguin Award
The National Frozen and Refrigerated Foods Association recently informed Associated Grocers that it has been honored with another SILVER PENGUIN award for the June Dairy Month promotion entry, advises Category Specialist Carrie Esposito.
This honor is shared by the talents and hard work of people throughout the company to put together a successful campaign for retailers, and to create an award entry that did not go unnoticed by the judges.
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August 1, 2007
U.S Health & Human Services Secretary Visits Associated Grocers
Associated Grocers (AG) was honored to be selected as one of the destinations on a recent tour made by the Honorable Michael Leavitt, Secretary of the U.S. Health and Human Services department. Secretary Leavitt is chairing a Presidential Task Force focused on promoting the safety and security of food, and particularly imported products. His visit to Louisiana was the third stop in his fact-finding tour prior to the group’s filing its preliminary review.
Secretary Leavitt visited the Associated Grocers Distribution Center and followed this with a tour of Matherne’s Supermarket on Bluebonnet on Wednesday, August 1st. Secretary Leavitt met with AG President J.H. Campbell, Jr. prior to the warehouse tour, and Mr. Campbell also took the opportunity to present the Secretary with a keepsake memory of his Louisiana visit – a copy of John Folse’s Encyclopedia of Cajun & Creole Cuisine.
In initial talks with Secretary Leavitt, Mr. Campbell focused on the issues facing retailers, wholesalers, and distributors in regard to the Country of Origin Labeling (COOL) law which goes into effect for produce and meat in September of 2008, and which is already in effect for fish and seafood. Under the law, retailers and wholesalers are responsible for violations and must keep voluminous records, invoices, and tracking information on food products for 18 months. If violations are found, retailers and wholesalers face stiff penalties. According to the U.S. Department of Agriculture, the fine for improperly labeled seafood can be up to $10,000 for each violation. However, Mr. Campbell pointed out that retailers and wholesalers have no control over what is placed into packages by manufacturers, processors, or producers.
Secretary Leavitt noted that there were lots of ways the process could be improved, from automating some inspections to making exporting countries more responsible for their products and compliance with U.S. standards.
“If you want to have access to the United States and our market, you need to manufacture food to meet our expectations,” Leavitt said.
A Walk Through the AG Distribution Center
During Secretary Leavitt’s tour of the warehouse, AG Sr. Vice President of Distribution and Transportation John Gillespie, Director of Produce Joe Burnett, and Mr. Campbell explained Associated Grocer’s Warehouse Management System (WMS) and the company’s practices for tracking its inventories -- both inbound and outbound. Secretary Leavitt asked what major issues AG needed assistance with to improve product safety and security in the food supply chain.
An improvement in the case packaging of products was one of the measures noted to ensure safety and durability throughout the supply chain. They also further discussed the need to review and eliminate the penalties for wholesalers and retailers associated with non-compliance for the pending COOL regulations. It was emphasized that AG and its member retailers are the middle man in the supply chain process. The processor or importer has control over the contents, quality, and safety of the product they produce.
The AG representatives also explained the difference and the need to have Louisiana produced crawfish tails in addition to imported product. Jennifer Breaux, Deli/Bakery Category Specialist, gave a brief summary of AG’s Seafood program to Holly Babin, Media Relations representative for the U.S. Department of Health and Human Services. The seafood program includes (but is not limited to) tilapia, salmon, and crawfish tails from China, striped pangasius and snapper from Vietnam; tuna and snapper from Indonesia. COOL documentation as well as test results for Chloramphenicol and Fluoroquinolones is available to our retailers on-line at the corporate website, www. agbr.com.
AG Director of Produce Joe Burnett and his staff greeted Secretary Leavitt near the produce dock. Secretary Leavitt was interested in learning how and where the imported cases of produce were labeled, so Joe and his staff set up a display of kiwis from Chile, pineapples from Costa Rica, mangoes from Mexico and bananas from Guatemala. Joe explained that this time of the year is one of the slowest times for imported produce, since most of the domestic regions are producing, but explained the process for the secretary’s benefit.
The Secretary asked how his office might better serve organizations such as AG when it comes to imported produce. Joe responded, “Overall the regulation and inspection of product as it reaches our ports and borders is very good, but on occasion good product gets delayed because of another product on the truck or vessel.”
Joe also explained to Secretary Leavitt that the majority of produce importers work very closely with their American counterparts, and as a general rule, imported produce comes to the U.S. in excellent condition. Joe said, “Secretary Leavitt was a very personable man, and he was impressed by his ‘down to earth’ nature.”
A View From The Retail Side
Secretary Leavitt then traveled down the road to the nearest AG retailer, Matherne’s Supermarket on Bluebonnet. This tour was designed to help him gain insight and understanding into the roles and responsibilities of retail outlets in the food supply chain.
Country of Origin Labeling (COOL) was again one of the top subjects addressed at the retail level. Secretary Leavitt was also able to see the safety issues in place throughout the supermarket. This retail visit clearly demonstrated the complexity and far-reaching aspects of the food-supply chain.
Secretary Leavitt appeared impressed with the knowledge and thoroughness of the process from distribution center to retail and continued the message that “We have the safest food in the world. It’s not perfect, but it’s the safest in the world.”
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