Food Trade News
Trump Administration Proposes Cuts to Supplemental Nutritional Assistance Program
The Trump administration proposed a new rule that will cut roughly 3 million Americans from the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. All this in a bid to save taxpayers around $2.5 billion a year.
The U.S. Department of Agriculture (USDA) sent out a press release about the proposed rule in which a loophole that allows states receiving minimal Temporary Assistance for Needy Families (TANF) benefits automatically eligible to participate in SNAP would be closed.
“For too long, this loophole has been used to effectively bypass important eligibility guidelines. Too often, states have misused this flexibility without restraint,” stated U.S. Secretary of Agriculture Sonny Perdue. “The American people expect their government to be fair, efficient, and to have integrity – just as they do in their own homes, businesses, and communities. That is why we are changing the rules, preventing abuse of a critical safety net system, so those who need food assistance the most are the only ones who receive it.”
Under the proposal, in order to be automatically eligible for SNAP, a household must “receive TANF-funded cash or non-cash benefits valued at a minimum of $50 per month for at least 6 months,” or be eligible for other non-cash benefits like “subsidized employment, work supports, or childcare.”
Giant Food, Stop & Shop To End Shared Merchandising Services
When Ahold Delhaize USA implemented its decentralized merchandising plan on January 1, 2018, some merchandising and related activities for its Giant Food “brand” (primarily dry grocery) were not fully autonomous. Instead, merchandising services in those categories were shared with its largest “brand” Stop & Shop, Quincy MA.
Effective at the end the third quarter of 2020, that agreement will end and the Landover, MD division will become a fully autonomous merchandising entity, joining Stop & Shop, Giant/Martin’s, Food Lion, Hannaford and its Peapod digital platform.
Those details were revealed below in an email to the retailer’s vendors and signed by Tonya Herring, senior VP-merchandising for Giant Food, and Mark Messier, executive VP-merchandising for Stop & Shop.
Dear Valued Supplier,
Since early 2018, Stop & Shop and Giant Food have been operating under a merchandising services agreement through which Stop & Shop provides merchandising services for the Giant Food brand. Based on a review of the program, Stop & Shop and Giant Food have decided to discontinue this agreement. The transition will take place in phases between Q3 2019 and the end of Q3 2020.
This opens an exciting new chapter for the Giant Food merchandising organization, which will stand up its own category, promo entry and cost & deals teams. As part of Giant Food’s newly launched Great Food Made Easy brand strategy, these strategic shifts give Giant Food greater customization in food selections and strategically positions Giant Food to respond to its diverse market demand with greater agility and flexibility, while delivering on its three-pronged brand promise: ease, assortment and experience.
This will also enable Stop & Shop to more fully focus on reimagining its brand and delivering an omnichannel experience that is truly Right for “Liz,” Stop & Shop’s target customer. This strategic work is a key U.S. critical priority.
Both of our brands are excited for this change and feel that this decision is in the best interest of both organizations and will enable more competitive, strategic and responsive promotional planning and ad development, increased regional relevance and independent commercial planning, among other benefits, resulting in increased value for both of our brands and our supplier partners. One aspect of services Stop & Shop will continue to manage and provide to Giant Food through an agreement between the two brands is fresh procurement.
As this transaction is happening in phases between Q3 2019 and the end of Q3 2020, there are no changes to vendor contacts now. We will let you know, as appropriate, of any changes as the transition takes place.
As always, we thank you for your partnership. If you have any questions, please don’t hesitate to reach out. We look forward to continuing to collaborate with you, our valued suppliers, to drive value for our businesses and for customers.
Specialty Distributor DPI To Close Its Mid-Atlantic Division
DPI Specialty Foods, the large distributor of gourmet, ethnic, organic and specialty foods, will be closing its Mid-Atlantic divison based in Upper Marlboro, MD in late October.
The company, in an internal memo issued by Mike Rodrigue, CEO of the Ontario, CA-based organization, stated:
“Having been informed of some major customer decisions and after a detailed strategic review, it is with deep regret that we announce the closure of the Mid-Atlantic facility, effective October 26th, 2019. The Mid-Atlantic division has been an important part of the DPI organization for nearly 20 years, serving our customers with pride and integrity, and for that, we are truly grateful. Unfortunately, after very careful consideration in conjunction with our shareholders and board of directors, a difficult decision has been taken to discontinue our retail operations on the East Coast. We are acutely aware of the impact on the DPI personnel at our Mid-Atlantic division and their families. We sincerely thank all of our colleagues at DPI Mid-Atlantic for their efforts and contribution over the years. As much as this saddens us to have to take this action, it is the correct decision for the long-term health of our business. At this moment, the timeline for final shipments and in-store merchandising activities is being established. In the coming days, we will follow up with information on expected timelines and more specific details on an individual basis. Your continued support is genuinely appreciated.”
Rodrigue also serves as operations consultant for Arbor Investments, the Chicago-based private equity firm that acquired a majority interest in DPI from Ornua Co-Operative Limited (formerly the Irish Dairy Board) in late 2015.
None of the other DPI operating divisions based in Ontario, CA, Tualatin, OR and Henderson, CO are affected by this announcement.
According to sources, Arbor Investments made its decision based on anticipated capital expenses needed to support its retail customers in the Mid-Atlantic, some of which work with DPI on a SBT basis (scan-based trading is the process where suppliers maintain ownership of inventory within retailers’ warehouses or stores until items are scanned at the point of sale). Current DPI Mid-Atlantic customers include Giant Food, Giant/Martins, Weis Markets and Kroger (all stores east of the Mississippi).
Approximately 250 DPI associates will be affected by the company’s decision to withdraw from the Mid-Atlantic. Also closing will be the distributor’s large 285,000 square foot distribution center which was built in 2004.
DPI’s Mid-Atlantic roots date back to 1963 when legendary perishables distributor Herb Halperin began his own DSD company. Former owners the Irish Dairy Board acquired the Halperin organization in 1989. In 1997, the Irish Dairy Board purchased C&G Distributors, another locally based DSD firm that was founded in 1973 by Tom Coyle and Joe Galiazzo that focused on center-store driven specialty foods.
NAFCO Breaks Ground On 70,000 Square Foot Cold Storage Freezer Facility
On July 16, NAFCO broke ground on a new cold storage freezer facility adjacent to its current seafood processing and distribution facility at the Maryland Market Center. The groundbreaking ceremony was attended by Maryland Lt. Governor Boyd Rutherford, Howard County Executive Calvin Ball and Dr. Donald Darnell, executive director of the Maryland Food Center Authority.
ARCO Design/Build Industrial was chosen for the construction of the new frozen seafood logistics building bringing their total footprint at the center to over 160,000 square feet.
Located at 7775 Chesapeake Bay Court the single-story building is being constructed on 6.6 acres of undeveloped land at the current facility owned by Stanley Pearlman Enterprises, Inc. the parent company of NAFCO and Congressional Seafood Company.
“We are very excited to be breaking ground on a new cold storage facility which will allow us to grow our business in the Mid-Atlantic,” said Stanley Pearlman, president of Stanley Pearlman Enterprises. “Howard County has been our home for the past 30 years and we’re happy we are able to continue to call this home and to bring over 50 new jobs to the region.”
NAFCO is a full line fresh and frozen seafood processor, wholesaler and distributor. They process over 115,000 pounds of fishery products daily using state-of-the-art equipment and deliver to over 1,100 grocery and club stores. Their fleet of refrigerated trucks enables daily pickups from fish docks, all major airports and cold storage warehouses throughout the Mid-Atlantic region.
The project is expected to be completed in early 2020.
Ramping Up Its E-Commerce Biz, Giant Opens 100th ‘Direct’ Unit
Giant/Martin’s earlier this month announced a milestone in its e-commerce strategy: Giant Direct, Powered by Peapod, its online grocery service that offers pick-up and delivery, is now available at 100 Giant stores and Martin’s Food Markets, under the Martin’s Direct banner, across four different states.
On July 12, Giant/Martin’s president Nicholas Bertram and store manager Tim Dinsmore celebrated the opening of the 100th store to offer Giant Direct with a ribbon cutting at the Giant store located at 255 South Spring Garden Street in Carlisle, PA. In celebration of this e-commerce achievement, Giant presented a $1,000 donation to Project SHARE, a Carlisle-based organization that provides groceries and other essentials to more than one thousand local families in need each month.
“As our customers become more and more interested in ordering groceries online, it’s critical that we offer a solution that exceeds expectations, and Giant Direct is that solution,” said Bertram. “Not only does Giant Direct allows us to meet the needs of our customer through a simple, easy-to-use and personalized digital experience, it positions us for future success in the ever growing digital landscape.”
In related news, the division of Ahold Delhaize USA announced that it will open its newest Giant Heirloom Market in the University City neighborhood of Philadelphia on August 2. The 9,950 square foot store, located at 3401 Chestnut Street, will be the second Giant Heirloom Market in the city.
“The opening of our second Giant Heirloom Market store reaffirms Giant’s continued commitment not only to the Philadelphia region, but also to our strategic investment in the city’s urban core,” said Bertram in announcing the opening. “We’re thankful for the community’s enthusiastic response to our first Giant Heirloom Market in Graduate Hospital and look forward to introducing this innovative design and concept to University City next month.
Giant introduced Giant Direct earlier this year to accelerate the company’s e-commerce strategy. In February, the company opened a 38,000 square foot Giant Direct e-commerce hub in Lancaster, PA that serves as a central shipping location for online delivery orders in the region. The hub also permits customers to place orders onsite via iPads allowing for pedestrian pickup as well as the traditional car curbside pickup.
The e-commerce evolution has continued over the past five months, as Giant has added Giant Direct to stores across its network. Giant Direct provides customers with a wide assortment of products, at great prices, with the same quality and service, they have come to expect from their local Giant and Martin’s Food Market, now combined with the technology of Peapod, to deliver a seamless online grocery experience to the customer.
Online customers can shop thousands of items including private label products, national products, fresh produce, meat and seafood, deli meats and cheeses, natural, gluten-free and organic foods, household items and even rotisserie chicken. By linking their Bonus Card, customers earn Gas Extra Rewards on qualifying purchases and can redeem their digital coupons to save even more on their groceries. All orders are carefully hand-picked by associates.
To place an order with Giant Direct, customers can use any device to visit the Giant/Martin’s website, www.giantdirect.com, or the Giant app, enter their zip code and begin shopping. Before checking out, they’ll be asked to select how they would like to receive their order – delivery or pickup.
“Giant Direct has had fantastic feedback from customers and that’s largely due to the team of Giant associates who’ve worked diligently to bring Giant Direct to market,” added Bertram. “I’m incredibly proud of the team that has helped us reach this milestone in our e-commerce program and look forward to the continued success of Giant Direct as we continue the rollout and enhance the experience.”
Through openings to date and additional locations planned for the remainder of the year, customers across 90 percent of the company’s footprint will have access to online grocery ordering and delivery services.
Village SR Reportedly In Talks To Buy NYC’s Gourmet Garage
According to multiple sources, Village Super Markets, the second largest member of Wakefern Food Corp., is in serious discussions to acquire Manhattan-based upscale specialty retailer Gourmet Garage.
Gourmet Garage currently operates three stores in Manhattan – Soho (Broome Street), Tribeca (West Broadway and Lincoln Square (Broadway and Amsterdam Avenue). The perishables-oriented merchant has downsized in recent years (it once operated as many as five units in Manhattan) and sources told us the company has been looking for a possible exit strategy for several months. That speculation increased when CEO and co-founder Andy Arons exited last month. Arons had piloted the company since it opened its first store on Broome Street in 1992 and he was a co-founder of the initial iteration of company – Flying Foods International, a restaurant distributor of high-end fresh foods which was sold to Kraft in 1987. Five years later, Arons and partner Adam Hartman opened their first Gourmet Garage. Hartman remains an active owner of the company.
As for Village, the only publicly-traded member of Wakefern, the Springfield, NJ-based merchant is no stranger to expansion. A year ago, it opened its 30th store in the Bronx (and first in New York) and in 2011 it entered the Baltimore-Washington market by acquiring two former A&P/Super Fresh stores in Maryland. Previously, Village acquired five former Starn’s ShopRite stores in southern New Jersey in 1987.
All told, Village operates 30 stores – 26 in New Jersey, two in Maryland and one each in New York and Pennsylvania.
An original Wakefern member in the mid-1940s, Village was founded by two Greek immigrants, Perry and Nick Sumas in South Orange, NJ in 1937. The company went public in 1965 when it operated only six stores and has grown steadily over the past 50 years, primarily in New Jersey. Today, Robert Sumas (Nick’s son) serves as CEO; Bill Sumas (Perry’s son) serves as chairman and John P. Sumas (Perry’s son) is secretary of the retailer whose annual sales in fiscal 2018 were $1.61 billion. A third generation of Sumas also has leadership roles: Nico Sumas (son of Robert and grandson of Nick) and John James Sumas (son of former Village CEO, the late Jim Sumas and grandson of Nick) are both co-presidents of the company and are seen as future leaders of the organization.
In its most recent operating period ended April 27, Village posted earnings of $4.97 million for the 13-week quarter on flat sales of $395.5 million.
If the Gourmet Garage deal is consummated, Village would be the first Wakefern member to operate urban high-end small format specialty stores which would even be a clearer delineation from one of Wakefern’s other perishables-oriented banner, traditional supermarket Fresh Grocer, of which there are currently 11 stores operating in the Philadelphia area (nine by Pat Burns and two by Jeff Brown). It would also give Wakefern its first member-operated stores in Manhattan. On the wholesale side, the cooperative distributor currently supplies independent retailer Morton Williams’ 14 Manhattan stores.
