C.A. Fortune Newsletter- June 2015

ORTUNE Natural Specialty BakeryNewsletter June 2015Volume 3 - Issue 6

C.A. Fortune Company Announcements ORTUNENatural Specialty Bakery Dear Valued Client & Customer Partners, C.A. Fortune is proud to unveil our new interactive newsletter. June 2015 We understand that obtaining industry news is essential and Vol. 3 - Issue 6 we aim to provide you with insightful content that is easily accessible in various forms from laptop, tablet, or mobile- Inside This Issue device. Announcements 2-3 We hope you enjoy this month’s newsletter and look forward to continuing to bring you quality information. Consumer Trends Sincerely, 4-5 Distributor News Liz Borys 5 Marketing Manager Retailer News New Additions to the C.A. Fortune Team 6-10 Shows & Events Matt Flores – Regional Sales Manager 11 Central Region – Kansas City Market Offices Matt comes to us highly regarded and well respected from the specialty distributor “world” Headquarter after spending the last 11 years managing Central Region several key accounts in and around the Kansas 141 Covington Drive City market. He started his career with us on May 26th, Bloomingdale, IL 60108 and already is hitting the ground running within his territory. 630.539.3100 He will assume control of Ashley Schoonover’s former responsibilities, and report directly to Brian Taylor, our VP of East Region Sales in the Central Region. 2 Van Riper RR Montvale, NJ 07645 Allison Pilcher– Regional Sales Manager 201.307.9100 Chicago & NW Indiana Markets South Region Allison, a Chicago based graduate of University 801 Stadium Dr. Ste. 107 of Illinois’s food marketing department, joins Arlington, TX 76011 C.A. Fortune from her former employer, Topco 817.522.3200 & Associates of 3 years. During her stay at Topco, she spent the majority of her time within their Sales Follow Us & Category Management departments; both of which will play key roles within her new role on our sales team. With a start date of June 22nd, she will be joining Jim Tyska in the IL market, and taking over Tim Murphy’s prior RSM role. She2 will report directly to Brian Taylor.

C.A. Fortune Company Announcements 3James McCool – Regional Sales ManagerEast Region – Manhattan & Long Island, NY MarketsJames, a graduate of Lafayette College (Pennsylvania) Business school, joinsour East Region sales team, as our newest Regional Sales Manager for theManhattan and Long Island territories (formerly under the control of GinoAlbanese). Based in the Queens, NY, he will report directly to J.D. Anastasi, VicePresident of our East Region.Dave Stephens – Account ManagerCentral Region - Wisconsin MarketAs we continue to expand our Account Manager level within the company(joining Cody Christensen & Andrew Thierer), Dave joins C.A. Fortune as ourdedicated AM for the Wisconsin market. Dave’s (and the position in general)core functions will be to support Susie Goldsmith and Larry McGivern on allsmaller natural independent account calls & overall merchandising efforts(conventional grocery & Whole Foods). As you would imagine, we’re ecstatic to announce thecontinued development of this team, and confident it’s going to add a tremendous amount ofvalue within each strategic market. Dave will report directly to Susie and Larry.Leah Huggins – Account ManagerCentral Region - Illinois MarketLeah, an Indiana Wesleyan graduate, will join the Account Manager team herein the Central Region, however strictly focused on the Illinois market. Leah will bebased downtown Chicago and support Jim and Allison on all similar functionslisted above under Dave. Her direct reports will be Jim and Allison.Nicole Lentz– Account ManagerEast Region - Florida/Georgia MarketsNicole, who has been on board for a number of weeks has already played acritical role in developing the independent natural business in the Southeast, inaddition to providing our team with much stronger merchandising coverage atWhole Foods. She is based in Atlanta, GA and reports directly to Miki Wolff,Regional Sales Manager – East Region.Craig Lanza– Regional Sales Manager, Bakery DivisionCentral Region – Wisconsin MarketUnder the leadership of Eric Syvertsen (Director of Bakery), our bakery divisioncontinues to excel, and as a result enabled us to bring on someone with theexperience and talent of Craig. Prior to joining C.A. Fortune, Craig spent the lastfive years on Acosta’s bakery team. His sole responsibility will be to grow andmanage our bakery business within the WI and MN markets. Craig will reportdirectly to Eric.

Consumer Trends U.S. Shoppers Prefer Physical Outlets To Online While online shopping seems to threaten brick-and-mortar retailers, new findings from The Nielsen Co. indicate U.S. consumers prefer physical store visits, but are still active in digital spaces. More than half of U.S. consumers surveyed report having an “enjoyable and engaging experience” while shopping in grocery stores, while 57 percent say shopping at a brick-and-mortar outlet is a “fun day out for the family.” U.S. shoppers trail most of the world in future willingness to use digital retailing options, according to Nielsen. The highest level of acceptance is in developing nations, as 60 percent of shoppers in Asia-Pacific and Latin American countries report an interest in using online outlets, compared with 59 percent in Middle East and African regions, 52 percent in North America and 45 percent in Europe. Globally, online and mobile coupons and shopping lists are the most cited forms of in-store digital engagement, with two-thirds of respondents saying they would use these technologies in the future. Further, Nielsen reports 14 percent of the 30,000 shoppers surveyed have downloaded a loyalty program or retailer’s app to receive information and product offers, while 65 percent report willingness to do so in the future. Source Health-Conscious Labeling the Future of Food The stats are in — Americans want to know what’s in their food. Nutritional labels are a popular read these days. In fact, 87 percent of Americans look at the Nutrition Facts panel on packaged foods and beverages at least sometimes, and 56 percent actively pay attention to what’s on nutrition labels, according to survey data from market research firm Packaged Facts. The new motto for ingredients seems to be, “simpler and fewer” — 67 percent of Americans prefer groceries with simpler and fewer ingredients. About the same percent consider nutritional content, ingredient-free and health benefit statements when choosing what to put in their grocery cart. In response to social media, focus groups, consumer surveys, and even petitions, the industry is adjusting to meet the concerns of what consumers do and do not want in their food and beverages. Major retailers and foodservice providers are adding their voices to the movement to convince the industry to respond. And respond they have. Major industry initiatives include eliminating artificial coloring and flavorings, replacing artificial preservatives with natural ones, reducing added sugars, switching to GMO-free ingredients, and reducing or eliminating routine antibiotics given to animals. Though the federal government requires Nutrition Facts panels and ingredients labels on all packaged foods and beverages, some marketers, retailers, and foodservice providers are taking a4 proactive stance on the issue.

Consumer Trends Health-Conscious Labeling the Future of Food cont.These companies are willing to overhaul even their most iconic brands, according to David Sprinkle,research director, Packaged Facts.Recent examples include: Kraft Foods Group — Beginning in January 2016, Kraft will remove artificial colors and preservatives from their Original Macaroni & Cheese boxed dinner mixes. The Hershey Co. — Announced that it will begin reformulating its products with simpler, easier-to-understand ingredients. They feature a three-prong strategy: simpler, more natural ingredients; transparency and ingredient information shared with consumers; and sourcing responsible and sustainable ingredients. Nestlé USA — Announced it will stop using artificial colors and flavors in all its chocolate candy products by the end of 2015. Tyson Foods — The country’s biggest poultry producer promised that by September 2017 it will expect to eliminate the use of antibiotics on chickens. Tyson is a major chicken supplier to McDonald’s, which announced that it will stop selling chicken raised with antibiotics in the next two yearsPackaged Facts, a division of MarketResearch.com, publishes market intelligence on a variety of topics. Source Distributor News KeHE Adds To Its Connect PlatformKeHE Distributors says it now provides route visibility through KeHE Connect, a proprietary platformthat accelerates engagement between retailers, vendors and KeHE.This industry-first capability sends real-time order status to any device,according to Illinois-based KeHE.“This is an exciting time for KeHE and our retail customers,” said Scott Cousins, chief information officerat KeHE. “The KeHE Connect platform was proven with show technology last year. Route visibility isa valuable addition to our KeHE Connect platform. It’s an important step toward making it easy to dobusiness with KeHE. We listened carefully to our retail customers and understand that in-store efficiencyis essential to their bottom line. KeHE Connect delivers opt-in information that matters. Route visibilityprovides valuable information by text or email at critical points in the fulfillment lifecycle.”KeHe says that transparency is vital in today’s supply chain. Retailers need to know when orders will bedelivered and alerted to any changes in estimated time of arrival.Source 5

Retailer News United Supermarkets Opens Grocery, Convenience Stores In Brownwood The United Supermarkets opened June 17 in Brownwood. The United Family opened its first United Supermarkets and United Express fuel and convenience stores in Brownwood at 300 East Commerce on June 17. The grand opening ceremony for the 42,648-s.f. supermarket and 1,472 s.f. convenience store included a $10,000 check presentation to Good Samaritan Ministries, as well as a $1,200 donation to the Austin Avenue Church of Christ, the church that hosted job fair events. “This grand opening is the culmination of hard work and dedication demonstrated by many United Family team members and Brownwood community leaders,” said Robert Taylor, CEO of The United Family. “We are excited to introduce this community to our company’s special brand of service, while also providing a comprehensive selection of everyday items families need at an affordable price.” United Supermarkets features a large selection of fresh-cut fruits and vegetables, including more than 100 organic options, fresh meat and seafood and experienced meat cutters. Other notable features include a full-service bakery and walk-in beer cooler, as well as Texas-made products, a large frozen food section and an extensive selection of gluten-free items. A drive-thru pharmacy is available and plans are under way for the addition of an in-store clinic. In addition to standard convenience items, the United Express store has sandwiches, breakfast burritos and other items available that are made fresh daily in the primary store. It also has a four-pump (eight- dispenser) fuel station, which offers both gasoline and diesel. “This United Supermarkets represents our newest format for the banner, which Brownwood guests will really enjoy,” said Wes Jackson, chief merchandising officer for The United Family. “The store features an expanded offering of fresh foods including fresh prepared food complete with in-store dinning. In a very recent exciting development, we will also feature an in-store Starbucks opening later this year.” Store director Lynn Day comes to Brownwood from Graham, Texas, where he served as the assistant store director since 1994. Prior to his arrival at United, Day spent 14 years in the grocery retail business with other regional companies. “Not only will guests be able to fulfill their grocery, gas and pharmacy needs here, but this store serves as an asset to our community,” said Day. “We are proud to provide employment opportunities and enable further economic development within the Brownwood economy.” The 9.8-acre site is responsible for nearly 200 jobs in the community and an estimated payroll of $1.35 million per year. United Supermarkets is the flagship brand of The United Family, a Texas-based grocery chain that operates 66 stores in West Texas, Dallas-Fort Worth and New Mexico under five banners: United Supermarkets, Market Street, Amigos, Albertsons Market and United Express. The United Family is a wholly-owned subsidiary of Albertson’s LLC.6 Source

Retailer NewsLunds & Byerlys to Pilot Customer Experience Platform Platform powered by UnataLund Food Holdings, parent shopping experience, including vider, which will handle ordercompany of 27 Lunds & Byerlys related items to those added to management, content targetingsupermarkets in the Minneap- their shopping cart. Plus, they and customer service tools forolis/St. Paul area, will pilot a will have access to a personal- the stores.1-to-1 customer engagement ized version of the product cat- Phil Lombardo, chief market-platform to drive unique online alogue, which presents the most ing and merchandising officerexperiences for its shoppers. relevant items for the shopper in for Lunds & Byerlys, said theOver time, shoppers will have each department. platform will give his customersaccess to a 1-to-1 personal- Shop by Attribute: Customers the best possible experienceized homepage and personal- can organize and browse prod- online.ized product recommendations ucts based on attributes such as “Their focus on providingacross their entire shopping organic, local, gluten-free and consistent and highly relevantexperience. more. customer experiences across Complex Promotion Support: all channels differentiates themIncluded in the omni-channel Customers can access all in-store from anyone we evaluated,” hecustomer experiences are: specials, including complex pro- said. “This combined with their1-to-1 Personalized Home- motions, within the eCommerce expertise specific to the grocerpage: Customers can easily experience. Discounts and offers category gives us the utmostaccess a 1-to-1 personalized are incorporated into the esti- confidence that the outcomeslist of the most relevant spe- mated cart total. of this partnership will delivercials based on their purchase Order Management: The grocer even stronger shopping experi-history, their most frequently staff can manage online orders ences for our customers.”purchased items and targeted through a dashboard.content from Lunds & Byerlys. Content Targeting: The grocer1-to-1 Product Recommen- can target and manage promot-dations: Customers will be ed content to their customers.presented with product recom- The program will be powered bymendations across the online Unata, an omni-commerce pro- Source 7

Retailer News June 30 Is Deadline For Retirement Of Coupon Barcodes The Connecticut Food Association has reported that Food Marketing Institute and members of the Joint Industry Coupon Committee are urging retailers to prepare for the retirement of UPC Prefix 5 barcodes from manufacturer coupons. These symbols will no longer be used after June 30, as manufacturers shift to exclusive use of the GS1 DataBar format for coupons. To ensure readiness, retailers may simply need to enable the functionality in their systems. In some instances, software and/or hardware modifications may be required. Source Wegmans on its first urban supermarket in Boston Construction of a Wegmans supermarket in the Fenway neighborhood of Boston -- the first to be built in the city proper -- is expected to be complete by 2018, the compa- ny said this week. The Rochester, New York-based grocery chain told the Boston Business Journal that Wegmans will be a “central piece” to the $500 million renovation and expansion of the historic Landmark Center on Park Drive. “We are still committed to the project ... and are making great progress,” Wegmans spokeswoman Jo Natale told The Journal. Natale said design plans are still in the making, but that the supermarket will likely be similar in size to the Weg- mans in Chestnut Hill, which opened in April 2014. Wegmans has locations in Northborough and Burlington, and is slated to open a 122,000-square-foot store in Westwood this October. There are just over 80 Wegmans across the Northeast, according to the Washington Post. The Wegmans in urban Boston will serve as anchor for the food court on the ground level of Landmark Center. The renovated complex will feature hundreds of new apartments, offices and retail spaces once complete. Wegmans, known for its fresh produce and reasonable prices, has been named the No. 1 grocery store chain by Consumer Reports each year for the past decade.8 Source

Retailer News 9 Meijer builds connections with MillennialsMeijer has been able to connect with Millennial consumers because much of its culture meshes wellwith these younger shoppers, JK Symancyk, the retailer’s president, said in a presentation Thursday.The 218-store retailer was founded during the Great Depression as a local operator, and that ongoingfocus has come full circle with this generation, he said during a session at The Global Summit 2015,presented by The Consumer Goods Forum in New York.“Local connections is what we thought was important in 1934, and it’s also something that happens tobe very important to Millennials,” he explained.While this generation represents the fastest growing group of customers, Meijer avoids the temptation ofviewing Gen Y as a uniform entity, he said.“Don’t think of them as one group,” he explained. “A lot of them haven’t decided what they want to be.Don’t judge them. Listen and learn.”Despite the wide belief that younger consumers are the ones focused on transparency and trust, that’stoo simplistic, he asserted.“It’s less about size and more about public versus private,” he said. “The fewer constituents you serve,the truer you can be to your mission. When you have responsibilities to investors and shareholders aswell as customers, you have to decide which group to be right for. To have the freedom to be focusedon customers 100% of the time is a blessing.”Symancyk urged the industry to keep the people factor in mind as companies grow their businesses.Meijer employs some 66,000 team members across its regions.“It comes down to your people,” he said. “Don’t lose sight of psychology and behavior as you work tocatch up to technology. We want to invest in our people to be stewards for customers.”Symancyk made his remarks both in a short speech and during a one-on-one, on-stage interview withquestioner Mark Batenic, president and CEO of IGA. Source Kroger’s President And COO RetiresThe Kroger Co.’s president and COO, Mike Ellis, has retired after 40 years with the company.Ellis joined Fred Meyer in 1975 as a parcel clerk at age 16, and went on to servein a series of operations and merchandising leadership positions in stores, divisionmanagement and as a corporate officer. He was VP of Fred Meyer’s food groupbefore joining The Kroger Co. as a senior officer in 2004. He returned to lead FredMeyer as president in 2006. He was promoted to SVP of retail divisions in 2012,leading five operating divisions, as well as Kroger’s jewelry and convenience storebusinesses, and became president and COO on Jan. 1, 2014.Ellis’ successor will be named at a later date, according to Kroger.“We’re very grateful to Mike for his contributions over the past 40 years, and we wish him all the bestin retirement,” said Rodney McMullen, Kroger’s chairman and CEO. “We have long taken a teamapproach to leadership and together our highly-experienced team of operators and merchandisers isfocused on delivering on our aggressive growth goals.” Source

Retailer News Southeastern Grocers To Donate All July 4 Profits To Wounded Warrior Project Southeastern Grocers will donate all profits generated at Bi-Lo, Harveys and Winn-Dixie stores on Saturday, July 4, to Wounded Warrior Project’s Independence Program. The Independence Program is designed to help warriors who need to rely on their families and friends for support due to injuries they have suffered, such as brain injury, spinal-cord injury or other neurological conditions. Individualized plans are created with goals to provide a future with purpose at no cost to the warriors or their support teams. “Winn-Dixie, Bi-Lo and Harveys operate in states with some of the highest active duty military populations in the United States,” said Ian McLeod, CEO and president of Southeastern Grocers. “While we recognize on Memorial Day those soldiers who paid the supreme sacrifice and give thanks to those who have served on Veterans Day, the sacrifice and needs of those who are severely injured visibly or invisibly is not necessarily fully understood. I am honored that we are running this program and am thankful to the military men and women and their families for their service and sacrifice. “We believe we all have a responsibility to care and contribute to the lives of those who have served and sacrificed for the nation, which is why we are committing every cent of every dollar of profit generated this Independence Day across all of our Bi-Lo, Harveys and Winn-Dixie stores to help support the Wounded Warrior Project’s Independence Program,” he added. “We felt it is the right thing to do, and our 70,000 associates do, too.” Steven Nardizzi, CEO of Wounded Warrior Project, said, “Continuing our work with Bi-Lo, Harveys and Winn-Dixie in the spirit of supporting our lifelong commitment to serving our nation’s veterans is exciting. Dedication to our injured service members is evident in the sincere efforts of companies like Southeastern Grocers, and the support we will be receiving from them is vital to our mission to honor and empower our Wounded Warriors, and Independence Day is the perfect time to celebrate.” In addition to shopping at the stores on July 4, other ways in which customers can support the cause include: l By donating during checkout through July 5; l By wearing the “I Donated” sticker that cashiers will hand out on July 4 to all customers to encourage friends and family to do the same l By liking, following and sharing Bi-Lo, Harveys and Winn-Dixie Facebook posts and Twitter feeds with #AllForHonor; and l By honoring a veteran or service member by posting a dedication on a special Facebook page, facebook.com/allforhonor.10 Source

Shows & EventsShow Location Date Brookshires / UNFI Show Tyler, TX July 1, 2015 Arlington, TX August 5, 2015 Associated Wholesale August 5, 2015Grocers Ft. Worth Fall Show Dallas, TX August 12-13, 2015 Kansas City, MO August 13, 2015 Southwest KeHE Tabletop Amarillo, TX Valu Merchandisers Company Fall Show Affiliated Foods Fall ShowMidwest KeHE Tabletop Minneapolis, MN August 19, 2015Southwest KeHE Tabletop St. Louis, MO August 26, 2015KeHE Natural Show Long Beach, CA September 9-10, 2015Associated Wholesale Oklahoma City, OK September 10, 2015Grocers Oklahoma Fall ShowGreat Lakes KeHE Tabletop Bolingbrook, IL September 16, 2015Expo East Baltimore, MD September 16-18, 2015Midwest KeHE Tabletop Milwaukee, WI September 23, 2015Haddon House Fall Show Uncasville, CT Sept 30 - Oct 1, 2015 Associated Grocers Fall Baton Rouge, LA TBD September 2015 Show Orlando, FL October 2, 2015Southeast KeHE TabletopNorth East KeHE Tabletop New York, NY October 7, 2015Great Lakes KeHE Tabletop Fort Wayne, IN October 14, 2015Kosher Fest Secaucus, NJ TBD November, 2015 ORTUNE Natural Specialty Bakery 11