Taking Stock

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Local Notes

Kroger finalized a big deal just prior to presstime. The country’s largest pure-play supermarket chain ($123 billion in annual sales) purchased a 5 percent stake in British online grocer Ocado Group. The Cincinnati-based grocer paid $247 million for its investment in the progressive ecommerce retailer and with that comes exclusivity to use Ocado’s technology in the U.S. Initially, Ocado will work the Kroger to set up systems to manage warehouse operations, automation, logistics and delivery routes for Kroger’s growing (but not nearly as fast as Amazon’s or Walmart’s) online grocery business. The two firms will identify three sites later this year for development of new automated distribution centers. Both merchants said that as many as 20 warehouses will be identified over the next three years. Ocado is a much-admired company and has struck deals with other supermarket chains in France, Canada and Sweden and has talked to U.S. retailers before culminating the Kroger agreement. More Kroger news: in his annual letter to the company’s shareholder’s, CEO Rodney McMullen offered an optimistic view of his company, which has sometimes been criticized by Wall Street for acting too slowly to jump into ecommerce initiatives (personally, I have disagreed with that view). McMullen touched on the size scale and “human connection” of his organization as advantages and differentiators. He touted the company’s proactive approach to change, noting that Kroger is indeed making the necessary investments to create the future of retail (the letter was issued before the Ocado deal was announced). Much like Ahold Delhaize CEO Dick Boer did last month at his company’s annual meeting when he noted that “stores still matter,” McMullen also noted the importance of physical stores and the presence they bring to local communities. He added that the chain’s “Restock Kroger” plan “creates an exciting ecosystem for those who want to develop, test and scale the innovative solutions that will fundamentally redefine the food and grocery customer experience.” Rodney McMullen embodies the Kroger persona – not a lot of flash and dash; just steady, solid execution that keeps moving the needle consistently forward…the banners of the former Ahold USA divisions (Giant Food, Giant/Martin’s, Stop & Shop) will now utilize the “Guiding Stars” nutrition rating system to help consumers evaluate the nutritional value of products on the shelves. The two former Delhaize America banners – Hannaford and Food Lion – have been deploying “Guiding Stars” for more than a decade. Ahold USA and Delhaize America officially became one U.S. operating company – Ahold Delhaize USA – on January 1…I was very happy to hear that Tricia Warehime, wife of the late and great Mike Warehime (former chairman of Snyder-Lance), has reconnected to the business. Tricia, through her family-owned company, MAW Acquisitions LP, has purchased G&S Foods/Tastysnack Quality Foods, an Abbottstown, PA private label manufacturer and co-packer of salty snacks. “We were only interested in selling the business if we could find the absolute best fit for our employees, our customers and our community. Tricia Warehime offered that opportunity through her family owner/operator experience with Snyder’s of Hanover, her shared knowledge and passion for the snack food industry, and her commitment to continued investment in our community,” said Steve Garvick, who along with Dale Spahr will continue to supervise day-to-day operations of the company they founded in 1996. “Our family had just exited a snack food business in the community and wanted to put our knowledge back to work again locally. We’ve known Steve and Dale personally and professionally for years and are looking forward to sharing our experience and networks to build, enhance and further expand this solid, well-managed company while ensuring quality, customer service and efficiency remain the hallmarks,” said Warehime. And Warehime has assembled an all-star team of snack food executives to sit on the company’s board of managers. They include: Tom Dempsey, most recently CEO of the Snack Food Association and formerly president of Utz Quality Foods; Ed Good, formerly divisional president of Snyder’s-Lance and former CFO, Snyder’s of Hanover; Peter Michaud, formerly divisional president of Snyder’s-Lance; and Dan Morgan, president and chief sales officer of BFY and formerly chief sales officer of Snyder’s-Lance. We wish Tricia great success with this exciting new endeavor…as I was pondering the implications of the recent leadership change at Lidl U.S., replacing Brendan Proctor with Johannes Fieber, I connected the dots back to the original U.S. management team of Kenneth McGrath and Kevin Proctor (who were gone before Lidl opened its first store). McGrath and Proctor are now leading Save-A-Lot, where according to several licensees, they are attempting to turn the company around in the wrong direction. Am I thinking too narrowly when I wonder if the process/systems-driven European models of many companies that are doing business across the pond just won’t work in the U.S.? Perhaps both Lidl and Save-A-Lot could use more of Rodney McMullen’s “human connection,” along with some native street smarts to instinctively change the play when necessary…several deaths to report this month, including two industry icons that have been part of my life for the entire 40 years of Best-Met Publishing’s existence. But first, I am sad to report that “Mini-Me” has left us. Verne Troyer, who played the charismatic actor in the two Austin Power comedy films, is dead at the age of 49. Standing only 2 feet, 8 inches tall, Troyer appeared in 58 movies and TV shows in a career that spanned 22 years, but will always be remembered as the diminutive clone of Mike Myers (Austin Powers) in the hilarious flicks “The Spy Who Shagged Me” and “Goldmember.” Once he became famous, he said he would go out in public with a hat and sunglasses to avoid the notoriety, but, he noted, “This disguise just doesn’t seem to work.”…one of the great novelists of the past 50 years has also died. Tom Wolfe, whose colorful writing style and uncanny ability to capture current events and pop culture, has left us at the age of 88. Among his seminal works were “The Right Stuff;” Bonfire of the Vanities;” and “The Electric Kool-Aid Acid Test.” If you have never read a Tom Wolfe novel or essay, do yourself a favor and pick up one of his works. He truly was a master craftsman of wordsmithing, one whose brilliance is easily recognized…and, from our industry, passing on earlier this month was Larry Rothwell, 92, co-owner and founder of the Pennington (NJ) Quality Market, one of the best independent supermarkets in the region. When we first purchased Food Trade News in 1978, Larry, who was then working for the Fleming Cos., was one of the first people I met. He took me under his wing, providing guidance and wisdom about our new business. Larry’s soft-spoken style, his wit and humility were what made him beloved to so many in our industry. He truly was one of the few people in life who could make you feel better about yourself after spending a few minutes with him. God bless…Herb Beckenheimer, a man who perfected the art and science of urban retailing, also passed away earlier this month at the age of 95 (his full obituary can be found on page 6). What a great life Herbie led, starting his own supermarket while in his 20s and continuing a retail career until he was 93. But Herb was more than a successful retailer – he was a true mensch – funny, candid, honest and humble. When Herbie liked you, he always had your back. I’m going to miss him.