Key Food Volume Keeps Rising; Co-Op Unveils Bold Growth Plan

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Dan Kupferberg, the company’s natural, organic, specialty (NOS) and international buyer, took the stage to illustrate the importance of NOS and its impact on sales. The youthful buyer, who spent more than two years with Wakefern, noted that natural/organics/specialty items, when on promotion, delivered a 71.4 percent sales lift, with total category sales increasing 4.8 percent. Kupferberg also announced that Key Food just signed a contract with Davidson Specialty Foods (a unit of C&S) to serve as its primary supplier for NOS beginning in April.

In 2018, Key Food fully launched a new private brand initiative, retiring the Key Food label and replacing it with the Urban Meadow brand. Jackie Rogoz, private brand buyer, said that since the rollout began the company’s private label share has increased 1.2 percent. Currently, 62 percent of item conversions have been completed, with a total of 750 items planned to transition. Key Food hopes to have 90 percent of the conversion completed by July. As an ancillary part of the private brand relaunch, another 170 items will bear the Urban Meadow Organic (UMO) label. There are 66 SKUs of organic now available to the company’s retail members.

Returning to the podium was George Knobloch who detailed Key Food’s upgraded software effort. Utilizing enterprise software provider SAP and a local consultant, Knobloch believes the upgrade to a single system platform (“I think this is the first time we’ve had a professional IT structure since 1937”) has already given the organization greater precision and efficiency in its ability to gather and process data. And with its participation in GDSN (Global Data Synchronization Network) and GS1 (Global Standards), Key Food believes it can provide its vendors with more accurate data.  ey Food is also working with SAP to develop its new website which will offer an improved digital circular, more accurately measure consumer impressions, create a more personalized experience and enhance its digital couponing and overall loyalty marketing program. The newly redesigned website effort should be completed by the end of 2019.

Knobloch addressed issues which he believes will be critical to accelerating Key Food’s growth. The Jersey Shore native believes that despite Key Food’s recent growth spurt, it still has limited leverage with suppliers which will change if the company continues to grow revenue. To achieve that, Knobloch said that investing in infrastructure and attracting and retaining top talent will ultimately improve top line sales. He noted that opportunities exist with the 675 non-Key Food independents that operate in Brooklyn, Queens, Manhattan, Staten Island and the Bronx. Marketplace changes such as the recent Lidl/Best Market and Stop & Shop/King Kullen deals also provide growth possibilities just as the bankruptcies of A&P and White Rose have enabled Key Food to add stores and new members.

He said that an acquisition or merger with a current competitor might be a consideration. And he saw geographic growth as an important pathway. Beginning almost a year ago, Key Food began an exploration to expand its base into Florida, especially with the strong link to many Hispanic retailers in New York. Knobloch, Janeway and John Durante, Key’s VP-business development, put together a plan to attract independent retailers into Key Food’s differentiated rebate-driven operating model.

The company hired Luzmary Jimenez, a former Supervalu executive based in Florida, as VP of its Sunshine State operations and a signed a supply agreement with C&S which operates three distribution centers in Florida.

Believing it could also offer lower cost of goods fees than existing wholesalers Krasdale and Supervalu (formerly AG of Florida), Key Food deployed old fashioned shoe leather to personally meet with independent retailers in the region covering Orlando and southward. To date, 30 stores have been signed with the first store having opened last week in Sunrise, FL. Knobloch estimated that servicing as many as 80 stores with a combined revenue of $800 million is achievable.

Lisa Gniewkowski, the company’s dairy buyer, provided an overview of how to “win at Key Food.” She emphasized the importance of the “four Ps” – promotion, product, place and price – and urged the reps and brokers to consider joining Key Food’s Elite Vendor program. Currently there are 41 sales organizations that are “elite” members, all of which have increased distribution and sales because of the priority the co-op places on its most important vendors.

Knobloch again took the stage to provide his much anticipated best and worst performing (by sales) vendors by department. Among the best in their departments were Nestle Waters (grocery); Natural Foods (dairy); B&G (frozen); Flowers/Wonder (DSD); Sabrett (meat/seafood); Goodness Garden (produce); and Tyson deli (deli/bakery).

Knobloch also saluted Scott Cameron, who for the past three years has served as a consultant while also acting as VP-merchandising and analytics. Cameron will be leaving Key Food in April and relocating to Redondo Beach, CA.

As has been the case with the six previous Key Food summits, vendors received an overload of information disseminated in detail rarely heard at other vendor meetings and primarily delivered in the unique style of Messrs. Janeway and Knobloch. And they served you breakfast and lunch, too.