Food Business News - April 7, 2015 - (Page 21)

Kroger on the cutting edge types of things, large pack yogurt, organic berries, frozen and fresh... "It's just on fire right now. And for us, trying to stay connected and have the right products at the right prices has been a lot of work, but I think we are getting a piece of that." Another contributing factor is the proliferation of natural and organic products across the store, from the deli counter to the dairy case to the center aisles. "You can go up and down a lot of grocery aisles and see organic boxed cereal and organic soups and organic green beans in the canned vegetable aisle," said Mike Schlotman, senior vice-president and chief financial officer of Kroger. "We've done a great job of connecting with (the natural and organic) customer and probably keeping them in our store to buy more of that product, either because they liked our price point, they didn't realize we have it, and now we are so NEW YORK - "I would say right now it's a good time for grocery stores." The comment was made by Mike Ellis, president and chief operating officer of The Kroger Co., during a March 25 presentation at the Telsey Advisory Group Consumer Conference in New York. And though consumer confidence may be improving, his view of the industry is a particularly positive one. With sales of $108.5 billion in fiscal 2014, the Cincinnati-based retail chain has posted 44 consecutive quarters of same-store sales growth as many of its competitors have struggled with - Mike Ellis, The Kroger Co. challenges and changes in the way today's consumers shop. "Our share is growing - our food share in well-developed in it they realize we have it. most of the markets we do business in," Mr. Where they used to shop for that, we don't reEllis said. "Where it's coming from, it's really ally know. But that would probably be taking hard to say." share from one of the other outlets. Keeping pace with change is a critical "And I seriously wouldn't know whether component of Kroger's success. it's Whole Foods or one of the more specialty "It's probably safe to assume that any stores in the area. But we are doing a really, trend or idea that might be out there, that really good job with that customer." we are probably testing it somewhere, someKroger's store brands generate about a fourth how," Mr. Ellis said. "We just don't shout of the company's sales, as the quality and perabout everything because we don't want to ceptions of private label products improve. get people excited about it if it doesn't work, "It's not generic products like it was 30 years or we have to tweak it or stop it or change it ago when I started with Kroger," Mr. Schlotdramatically." man said. "This is high-quality brand, quality product. But the customer understands it's Making organic accessible high-quality, it's a better price point... A healthy portion of Kroger's sales come "We call it switchover, not trade-down." from natural and organic products. The comBut whether customers buy national pany's Simple Truth and Simple Truth Organ- brands or store brands matters little to ic product lines produced $1.2 billion in sales Kroger, he added. in 2014, within two years of launching. "At the end of the day, we don't have a "The retail price spread between the con- preference for what they buy," Mr. Schlotventional product and the natural and organ- man said. "Our job is to figure out what they ic product was pretty wide," Mr. Ellis said. want and figure out a way to give them more "I think over the years we've narrowed that of it at the best price, make it convenient and spread, and both from an availability of prod- have a great shopping experience." uct position and just customer demand. Added Mr. Ellis: "You know, I don't re"The price compression, I think, has ally buy into, oh, the retailer has the power helped move more people into that area. But right now or the C.P.G. Because at the end of today, you look at some of the items that are the day, if Kraft wanted to raise the price of just on fire - chia, quinoa, dairy, plant-based American Singles by $1 a package, we can't Continued on Page 23 dairy products are really big, soy, almond We are the largest sushi retailer in W America, and nobody really knows that. . April 7, 2015 serves International Food Products Food Manufacturers We provide the highest quality ingredients at competitive prices on time and in spec. Sugar Oils Starches Food Grade Chemicals Cocoa Stabilizing Systems 800-227-8427 Trusted Ingredients. Trusted Advisors. FOODBUSINESS NEWS ® 21

Table of Contents for the Digital Edition of Food Business News - April 7, 2015

Food Business News - April 7, 2015
Challenges ahead for ConAgra Foods
Shifting from weight management to wellness
Beverage Business News - Beyond milk: Dairy ingredient trends
Table of Contents
Web Contents
Editorial - India may soon rival China in growth
Health concerns, competitive headwinds slow U.S. chocolate sales growth
Innovation brewing at McCormick
Tyson Foods leveraging Hillshire innovation
Heinz, Kraft merger offers ample international opportunities
Kroger on the cutting edge
Packaged meats sales lift Smithfield earnings
Market Insight - Farmers’ planting intentions vary from expectations
Washington - Feinstein, Leahy introduce B.P.A. labeling bill
Company Profile - Panera 2.0: In pursuit of excellence
Ingredient Innovations - Anticipating egg alternative needs
Dairy solids assist with flavor development
New Food Products
Ingredient Market Trends - U.S.D.A. March 1 soybean, corn and wheat stocks up from year ago
Ingredient Markets
Highlights from Research Chefs Association’s Culinary Expo in New Orleans
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - April 7, 2015