MINNEAPOLIS, MN - Investors and analysts alike were surprised this week as Target Corp. beat the street with its third quarter of fiscal year 2016.

“We are very pleased with our third quarter financial results, which reflect meaningful improvement in our traffic and sales trends and much stronger-than-expected profitability,” explained Target Chairman and CEO Brian Cornell in the report. “Favorable gross margin mix and efficient execution by our team drove third quarter EPS performance well beyond our guidance. We also continued to gain market share in key Signature Categories and saw unexpectedly strong sales in the Back-to-School and Back-to-College season.”

Highlights for the quarter included:

• Earnings GAAP EPS from continuing operations of $1.06, up 40 percent from Q3  
• Adjusted EPS of $1.04, up 22 percent from Q3 2015
• GAAP EPS from continuing operations of $1.06 and Adjusted EPS of $1.04 were both above the high end of guidance
• Third quarter comparable sales decreased 0.2 percent, near the high-end of the guidance range of flat to down 2 percent
• Comparable sales growth in Signature Categories outpaced total comparable sales by more than 3 percentage points
• Digital channel sales increased by 26 percent

Target also noted that it returned $1.2 billion to shareholders in the third quarter through dividends and share repurchases, and its stock reflected a healthy 6-plus percent boost upon the announcement.

“As we move into the biggest quarter of the year, we are pleased with our inventory position and confident that our team will deliver a great guest experience as they bring our merchandising and marketing plans to life throughout the holiday season,” Cornell said of the retailer’s future moves.

Cornell said in an earnings call following the release that there is much more work to do despite meaningful progress in the company’s efforts to improve traffic in sales compared with the second quarter. The retailer even raised its expectations for fourth quarter comparable sales, expecting growth to 1.0 percent.

Recently, we reported that the retailer’s Senior Vice President of Grocery, Anne Dament, departed the company. A replacement has not yet been announced, but Cornell said her department is still an area of improvement for the company.

As the retailer's plans for its food and fresh businesses continue to solidify, AndNowUKnow will keep reporting.

Target

ORLANDO, FL - With consumers and retailers both looking for ways to bring strong flavors to the plate, California Sun Dry is well-positioned to capitalize. I spoke with Loucy DeAtley, Head of Administration for the company, about the ways in which the brand is working to educate retailers on the enormous sales potential and ample culinary possibilities that sun-dried tomato offers to consumers.

“Most are not familiar with how rich, how diverse, and how flavorful a sun dried tomato can be—especially after the fresh tomato season," remarked Loucy at the well-attended PMA Fresh Summit. "It can add flavor to soups, to stews, to meatloaves, and especially to the things we have on our website.”

California Sun Dry’s website offers a wealth of nutritional facts and product information, as well as a variety of recipe ideas that retailers can reference to better acquaint themselves with the versatile dried fruit. 

For more details on California Sun Dry and the delicious possibilities sun-dried tomatoes can offer, watch the full video above.  

California Sun Dry

SACRAMENTO, CA - Today, House committee legislators will be voting to approve or deny a California irrigation bill that would forgive $375 million worth of debt owed by one of the nation’s largest farm-focused irrigation districts, Westlands Water District.

Approving the plan would, essentially, relieve the federal government of its obligation to provide drainage for each farm in the 600,000-acre Westlands district. According to The Sacramento Bee, the estimated overall costs to the federal government of providing these drainage services is $3.5 billion and counting.

In exchange for taking up the drainage responsibilities, Westlands will be forgiven for the rest of its capital cost debt owed for construction of the Central Valley Project irrigation facilities—now upwards of $375 million. 

“In order to move forward with the settlement agreed to by both Westlands and the U.S. Department of Justice last year, this bill has to be passed by Congress,” Republican Representative David Valadao told The Bee prior to the vote. “Doing so will be a positive step in resolving a long-standing drainage dispute and will ultimately save taxpayers billions of dollars.” 

Several other provisions are also a part of the proposed 10-page settlement plan, including the following: 

• Westlands will pay for a class-action lawsuit filed by farmers against the Interior Department for failure to provide drainage for land
• Westlands will retire at least 100,000 acres of farmland
• Westlands will gain ownership of the federal pipes, canals, and pumping plants serving the district 

Today’s vote by the House Natural Resources Committee will likely be approved by House republicans, The Sacramento Bee reports, but the bill will also need to pass through the Senate.

With an initial Congressional vote set to take place today, stay tuned as we continue to cover the developing deal.

SALINAS, CA - Amidst transitioning its processing facility from Salinas, California, to Yuma, Arizona, Taylor Farms has announced that it is adding to its foodservice offerings with five new items.

“Fall is the season of change, so we are taking this opportunity to change up our offerings with the addition of five fresh, colorful new items,” stated Tanya Mason, Vice President of Business Development for Taylor Farms California.

The newest additions include:

• Mirepoix Kit: diced onions, carrots, and celery
• Cauliflower Pearls: bite-size cut cauliflower
• Spinach & Beet Salad: spinach, beets, carrots
• Kale & Beet Salad: kale, beets, carrots, red cabbage
• Just Beets: shredded red beets

“The beet trio, consisting of Spinach & Beet Salad, Kale & Beet Salad, and Just Beets, are a wonderful addition to any fall menu,” Mason continued, according to a press release. “Our Mirepoix Kit is a fresh mix of diced onions, carrots, and celery, the flavor base for most turkey stuffing, and is perfect for the holidays. Lastly, our cauliflower pearls are a wonderful substitute to mashed potatoes and are nutritious, on-trend, and gluten free.”

The new items are currently shipping out of Taylor Farms California’s Yuma facility, where the company transitions every year in November in conjunction with the seasonal change in growing regions from the Salinas Valley to the Yuma area.

“Our team is made up of mechanics, technicians, refrigeration engineers, and a wide range of experts on vegetable growing, production, and processing,” said Marcus Shebl, Vice President of Operations for Taylor Farms California. “We are moving hundreds of pieces customized equipment in a very short time frame. Everyone on the team plays a critical role in making the move a success.”

It takes a team of over 200 people to complete the transition in less than 56 hours, according to the company, moving 1,400 tons of production equipment 571 miles from Salinas to Yuma. This means that everything must be unbolted from the floor, taken apart, loaded on 72 trucks, driven to its destination, then unloaded and re-built.

Once everything is completely cleaned, sterilized, and prepared to start processing produce, Taylor Farms is able to process its value-added products within hours of harvesting by centralizing processing facilities in close proximity to the fields.

The company will make its transition back to Salinas in March. AndNowUKnow will continue to report on Taylor Farms and other members of the industry as they follow the seasons.

Taylor Farms

JACKSONVILLE, FL – There are some big changes coming to the Southeastern Grocers banners, as the company looks to hone in on just how to serve its customers best in the tight buy-side environment. The company announced that 73 stores have been unveiled under the Harveys Supermarkets  banner, with some converted from the Bi-Lo and Winn-Dixie chains.

“We know that a number of our customers are cash strapped. They’re shopping on a budget. We want to try to make sure that we give them the best value we possibly can,” CEO and President Ian McLeod stated, according to FirstCoast News, of the strategic decision.

The 73 stores will open their newly christened doors as Harveys Supermarkets today, according to the TheState.com, throughout Georgia, South Carolina, North Carolina, and Florida. The company stated that this multi-state conversion came after months of listening to customers, who named pricing as the ultimate deciding factor as to where they shop. 

At the forefront of this shift towards accumulating further consumers, comes a focus on fresh and reduced pricing. McLeod stated that the new Harveys stores will feature an expanded produce section, featuring the fresh fruits and vegetables of over 90 local farmers. The chain will also boast more than 3,000 items in the store with ultimately lower prices. 

McLeod stated that in tandem with the conversions, the physical stores have received upgrades and remodeling. The chain also focused on tailoring store specifics to its surrounding demographics, in order to appeal to the consumers living and shopping in each locations areas. The new Harveys will now boast a fresher, brighter, and cleaner environment to further appeal to the price-conscious consumer.

As Harveys supermarkets offer a different market proposal than the Winn-Dixie or Bi-Lo brands, the company expects consumer traffic to increase in this banner. This new Harveys concept was initially tested in Jacksonville, FL, and Charlotte, NC. Southeastern Grocers stated that each test store was a success and boasted an increased number of customers.

McLeod stated that the while the company is ramping up its Harveys banner to fully engage a less-affluent segment of consumers, Southeastern Grocers is not abandoning its Winn-Dixie brand. 

As Southeastern Grocers and other companies within the buy-side sector continue to zero in on new strategies to increase consumer traffic, AndNowUKnow will have the latest.   

Southeastern Grocers Harveys Supermarkets

WENATCHEE, WA – Most retailers have noticed that holiday consumers tend to snatch up the biggest fruit on supermarket shelves. But, CMI noted recently, many retailers may not know that the sales opportunity on jumbo apples is significantly larger than they may think, extending beyond the holiday season into Valentine’s Day.

“The data shows that supermarkets featuring jumbo apples over-perform in both dollars and volume for the segment and the entire category,” said Steve Lutz, Vice President Marketing for CMI Orchards, in a press release.

Lutz’s analysis of national supermarket scan data shows big apples drive big dollars for supermarkets that seize this opportunity, offering a unique incremental sales boost. The evidence, CMI said, seems to suggest that shoppers purchase with a specific number of pieces of fruit in mind, usually based on the number of members in a family.

“Supermarkets selling jumbo apples drive success two ways,” said Lutz. “Jumbo fruit just looks impressive on display. It captures the attention of shoppers bringing new consumers into the category and it drives dollars because only two or three pieces of large fruit will generate a significant transaction at check out. It stands to reason that the bigger the fruit, the higher that ring will be at the register.”

Despite the potential for sales, most supermarkets appear not to be fully leveraging the opportunity. Lutz said Nielsen data revealed that less than 20 percent of retail supermarkets carried jumbo apples last year during December and January.

“The conventional wisdom is big fruit only fits a narrow window during the holidays,” said Lutz. “It’s true that December is a great month for selling jumbo apples, but what many retailers miss is that January is even stronger than December and is actually the strongest month of the entire year for jumbo apple sales. A lot of retailers are leaving dollars on the table by failing to sell jumbo apples, or if they do, failing to continue to push the items into late January. Featuring jumbo fruit is a great way to differentiate an apple display—yet many supermarkets never put the items on the shelf.”

Steve Castleman, Senior Vice President of Sales for CMI Orchards, said that fruit size in Washington State is significantly larger than normal this year, and retailers can capitalize on the abundance of jumbo apples.

“There are a lot of years when Washington State simply doesn’t have an abundance of large-sized fruit to support retail partners,” said Castleman. “Regardless of variety, this is the year for retailers to grab this special opportunity.”

Lutz added, “On December 1, we’ll start the eight-week peak season for jumbo apples. Don’t miss it.”

For more on amply-sized apples, fulsome fruit, and plentiful produce, check back with us at AndNowUKnow.

CMI Orchards

DELANO, CA - As the fall grape harvest ramps up in Delano and Arvin, California, Columbine Vineyards is bringing growth, flavor, and innovation to the company’s retail partners as we move into the holiday push.

With Thanksgiving just around the corner, Sales Manager Anthony Stetson and Lauren Olcott, Marketing Representative, join me to discuss this busy time of year and what Columbine is doing to bring more value to the produce department.

“This fall, we have an excellent supply of both red and black seedless grapes,” Anthony tells me. “Demand is very good, especially for our proprietary Holiday® Grape.  In addition to this seasonal favorite, we are also harvesting the ever-popular Autumn Royal, Red Globe, Scarlet Royal, Crimson, and Black Globe® varieties.”

Anthony also shares that prices are very attractive right now to promote both red and black seedless. All of Columbine’s fall varieties are in their peak of production, sweetness, maturity, and freshness.

If you know anything about Columbine, you know that the company never sits still for long, as Lauren Olcott shares.

“Columbine Vineyards is continuously improving and moving forward in technology and growing practices through product innovation,” she says. “Currently we have several new proprietary grapes in development but they still need a little more TLC before being released.”

Last year, Columbine introduced its Petite Bag, which holds 1.25-1.5 lbs. in high graphic bags, with 15 bags per 19 lb. box.

“These petite bags have taken off at the retail level for stores that have used the bag as a ‘grab-n-go’ item. This bag also appeals to stores’ end-consumer who is looking for less than the conventional 2 lb. bag,” Lauren adds.

In addition, Columbine has several different point-of-sale signage options that talk highlight the company’s 90th year anniversary, 4th generation family farmer, proprietary grapes, flavor profile and how to incorporate Columbine grapes in any of our favorite family recipes. Along with the POS signage this year, the company has also been testing recipe cards at the store level as well, to help drive purchases.

So, what is Lauren’s go-to?

“My favorite is the dual recipe card with the Holiday® Popper and Holiday® Grape Popper salad. These three-ingredient recipes are simple, easy and delicious with our Holiday® Grape!” she says.

Situated in the fertile soils of the San Joaquin Valley, the Caratan family has been shipping grapes since 1926 with a dedicated team to carry Columbine into 2017. Columbine grows more than 18 varieties of table grapes, available from July through December, including its own proprietary varieties as well as traditional consumer favorites.

Columbine Vineyards

SAN FRANCISCO, CA - With the inventive hub and thriving streets of San Francisco set as its backdrop, BrandStorm has closed its second annual gathering and secured its place as a must-attend event for industry marketers. Challenging, productive, and exhilarating, here are some moments that inspired me as I went through the whirlwind two days exploring fresh produce brand success.

As Mary Coppola, Senior Director of Marketing Communications at United Fresh, told the gathered group of anticipatory marketers during the opening remarks, this year's BrandStorm 2016 was an extensive opportunity to focus on the "intangibles" of the field. By exploring word of mouth marketing concepts, lasting identities, and brand ambassadors, United Fresh cultivated the event to uplift over 100 fresh produce companies and their brands, as well as the industry as a whole. 

“This second annual BrandStorm Conference once again proved the power and creativity when marketers gather together! The program was content rich and cutting edge, and I think we are all going home more motivated, inspired, and intelligent,” Mark Munger, Vice President of Sales and Marketing at 4Earth Farms, told me after two days filled with speakers, workshops, and interactive projects. 

Kicking off Day 1, the industry was treated to an opening session with Brian Wong, CEO and Co-founder of mobile advertising network Kiip. With a flash of humor and eye fixed on advertising trends, Brian talked us through focusing on the four steps to establish an effective brand identity; innovation, the people, the industry, and yourself. A story infused with produce is a lasting concept that we all took home, as consumers soon will also. 

The day’s second session was led by the enigmatic Ted Wright, CEO of global word of mouth marketing company Fizz. Ted illuminated attendees as to the strength consumers find in word of mouth marketing, and with stats like 19% of consumer brand choice coming from recommendation, he held the crowd in fascinated attention with his advice on staying authentic in your brand story, and starting the conversation with consumers.

"It's exciting to attend a conference where I'm able to collaborate with individuals from other industries and gain different insights as to non-traditional forms of marketing," Gabriela D’Arrigo, Director of Marketing and Buyer for Organic Produce at D’Arrigo Brothers of New York, told me of the lasting and fresh impression left on her by BrandStorm.

Tuesday led off with a marketing-packed bang with a panel of retailers who shared tips and insights as to what grabs the attention of their consumers. Consisting of Nugget Markets’ Director of Produce Adam Bazarnik, Northgate Gonzalez’s Director of Produce Alfonso Cano, and Andronico’s CEO Suzy Monford. With each retailer placing fresh at the top of their lists, attendees were treated with an inside at the produce department from the buy-side point of view. 

From there, marketers were led into a series of three workshops focusing on the issues and options which are congruent with developing a brand identity. Wittily given the option between “green” and “seasoned” sessions, attendees could choose each workshop based on whether they were new or old to the marketing game, or whichever workshop piqued their interest. The list, and noted guest speakers, were as follows: 

• Consumer Workshop, Green: Influencing the Influencers, led by Kale & Caramel Founder Lily Diamond
• Consumer Workshop, Seasoned: Foodservice Trends Straight off the Menu, led by Duda Farm Fresh Foods Brand Ambassador and Corporate Chef Todd Fisher
• Communication Strategies, Green: Social Media Strategy led by Tatu Digital Media CEO Janet Fouts
• Communication Strategies, Seasoned: Managing Your Brand Reputation, led by The Caliber Group CEO Linda Welter
• Branding and Packaging, Green: Fresh Ideas, led by Hatch San Francisco Director of Client Services Kat Karpati, and Co-Founder/Creative Director Joel Templin
• Branding and Packaging, Seasoned: Building a Brand Strategy for Success, led by Freytag Group Founder and Principle, Leslie Freytag

"BrandStorm 2016 was a success by all measures. We gathered more than 100 companies and over 180 attendees for two days of energized speakers, inspired case studies, and networking events. We're very pleased with the overall feedback we're receiving, and looking forward to continuing the tradition of BrandStorm in 2017," Mary Coppola divulged to me, pinpointing the event’s reach into the marketing heart of our industry.

A well-earned lunch was rounded out by the insights of Marc Pomerleau, Global Strategy Vice President at brand agency FreemanXP. Giving marketers the inside scoop on how to be adaptable in their brands, and truly engaging the consumer in a lasting way, Marc touched on the key elements of science, technology, environment, and people as a pattern for success.

Throughout each General Session and Workshop, United Fresh had something new and refreshing to offer BrandStormers; an interactive case study. As we all split into groups, marketers from each company delved into prospective marketing challenges for new brands and social media angles, collaborating as peers and accomplished professionals to achieve the perfect marketing plan. And, as the event went on, it was interesting to see how each plan shifted and streamlined after new information was gained from the workshops and general sessions provided by BrandStorm. 

The two days of marketing, creativity, and new concept consideration was brought to end with Alexandra Watkins, Founder and Chief Innovation Officer of brand naming and consulting agency Eat My Words. Among many insightful tidbits and examples, Alexandra drove home that a good brand name makes consumers want to S.M.I.L.E., with a moniker that is suggestive, meaningful, has imagery, legs (to expand), and emotion. 

From exploring the most effective marketing concepts, to analyzing the best way to tap in on influencers to secure a lasting brand, BrandStorm 2016 was an indisputable success. As new and old friends and partners in the marketing field celebrated an inspiring congregation of some of the best in our industry, I was left feeling awed by the talent and keen minds of our fresh produce marketers, and titillated at the brand innovations sure to come. See you next year, BrandStorm! 

Keep close with AndNowUKnow as we provide you more BrandStorm coverage in the coming days.

United Fresh's BrandStorm

IRVINGTON, NY - New York-based grocer Mrs. Green’s Natural Markets, subsidiary of Natural Markets Food Group, has announced a shakeup that includes the closure of five stores and the stepping down of current CEO, Pat Brown.

The retailer said it is turning its focus to core Westchester stores in Yorktown Heights, Briarcliff, Mount Kisco, Eastchester, and Larchmont, according to news source Westfair Communications.

“Mrs. Green’s Neighborhood Market has been a part of the fabric of the Westchester community for three decades and this announcement demonstrates our long-term commitment to providing our customers with the locally-sourced produce and healthy-living products they love,” a release stated yesterday, Nov. 15th, according to the report. “While the closure of any location is difficult–especially because our customers and communities have supported us–they are also necessary as we focus on our core, profitable stores.”

With those core store listed, this leave up for closure:

• Rye
• Tarrytown
• Manhattan’s West Village
• Fairfield
• Stamford
• Connecticut

The West Village and Stamford stores will close immediately, a spokesperson told the publication, while the Rye, Tarrytown, and Fairfield locations will be closed by week’s end.

In regards to the outgoing CEO Pat Brown, who took up his position in October of 2014, existing management will step in to take over his duties. While the company did not comment on a replacement, or when an announcement on a replacement will be made, it thanked Brown for his service over the last two years.

As a result of the restructuring, plans to expand in Dobbs Ferry, New York have been terminated. A spokesperson added that, despite being a part of Natural Markets Food Group, owned by Toronto-based equity firm Catalyst Capital Group Inc., only Mrs. Green’s is planned to be affected by this latest move.

Other grocery chains owned by Catalyst and operated under Natural Markets Food Group include Canadian grocery chains Planet Organic and Richtree Natural Market.

The company plans to provide severance packages and transition services to all associates and managers affected by the closures.

Natural Markets Food Group Mrs. Green's

WENATCHEE, WA – Stemilt’s innovative new management program Fruit Tracker™ has launched Fast Facts—a new video series that shares analysis of retail scan data with retailers.

“Our Fruit Tracker program has provided retailers with category analysis for 12 years, and this new video series is a modern way for us to break down hard-to-understand data into key takeaways. The Fast Facts video series will be quick to watch and timely so that retailers can react to the news of the data and make positive changes to a particular category in the months ahead,” said Brianna Shales, Stemilt Communications Manager.

The first episode of Fast Facts looks at apple category performance from September 2016—a time in which year over year dollar sales increased 3.2 percent from 2015.

The East Coast led all other regions with a 9.1 percent increase in dollars, according to a press release, in large part because bags were unavailable due to a late apple harvest on the East Coast. As a result, retailers purchased more apples in bulk from national providers.

Bulk apples saw a 4.2 percent increase in volume sold in September, while bagged apples decreased by 5.2 percent. Bulk apples made up 66.2 percent of apples sales, while bags took the leftover 33.8 percent. Average bulk sale was $0.30 more per pound than bags at $1.72.

“Bulk apples are the backbone of every high-performing apple category, and September was a great start to the season for apples at retail across the country. As retailers look ahead in their apple planning, it’s important to keep the emphasis on bulk with multi-variety promotions at least once a month,” said Shales.

Gala apples were the most popular variety of apple this September, Stemilt noted, making up 32.9 percent of the category by volume. Honeycrisp took a distant second with 13.7 percent, but they had the highest average retail price at $2.69 per pound. Fuji and Red Delicious tied in fourth with 11.2 percent of the category each.

Shales added, “The data in September reaffirmed that apples are a vital part of the produce department throughout the year, and that will continue to be true in the coming winter and spring months. We just wrapped harvest in Washington State and have great supplies of high-quality bulk apples to continue to bolster apple sales in the months to come.”

Apples made up 6.4 percent of produce department sales nationally, with the Central region leading other areas at 8 percent.

The data for the September 2016 video was provided by Nielsen. For more on apples and data-driven solutions to produce needs, stay tuned to AndNowUKnow.

Stemilt Growers