STELLARTON, NOVA SCOTIA - Sobeys' parent company, Empire Company Limited, released a robust Q2 2015 financial report on Friday, December 12th, 2014, revealing across the board double digit increases in sales, EBITDA and net income. The impact of the recent acquisition of Safeway Canada played heavily into these gains, according to Marc Poulin, President and CEO of Empire.

"We are pleased with our second quarter results and our progress year-to-date,” he shared. Growth in consolidated sales in the second quarter of 35.8 percent and in adjusted net earnings from continuing operations of 53.7 percent largely reflects the impact of the acquisition of Canada Safeway combined with Sobeys' sales and merchandising initiatives, including new and innovative commercial programs as part of the Company's purpose to help Canadians Eat Better, Feel Better, and Do Better.”

"We realized synergies from the Canada Safeway acquisition of $31.5 million in the quarter and are on schedule with our integration plan,” Poulin continued. “We remain focused on the ongoing promotion of our food-focused culture, while continuing to secure operational efficiencies and cost reductions across the organization."

Some highlights from Empire's financial report include:

• A 35.8% increase in sales to $5,995.1 million.
• A 64.8% increase in EBITDA to $324.3 million, compared to $196.8 million from last year.
• A 49.6% increase in adjusted EBITDA to $332.2 million compared to $222.0 million from last year.
• A 93.2% increase in net earnings from continuing operations, net of non-controlling interest, to $116.9 million compared to $60.5 million from last year.
• A 53.7% increase in adjusted net earnings from continuing operations, net of non-controlling interest, to $128.2 million compared to $83.4 million from last year.
• A 13.9% increase in adjusted EPS from continuing operations (fully diluted) to $1.39 compared to $1.22 last year.

Regarding Sobeys' performance specifically, some highlights from the Q2 2015 report include:

• A 1.7% increase in same-store sales.
• A 49.1% increase in gross profit to $1,480.9 million.
• A 58.6% increase in Sobeys' EBITDA contribution to Empire to $301.5 million (5.03 percent of sales), compared to $190.1 million (4.30 percent of sales) in the same quarter last year.
• A 49.5% increase in Sobeys' adjusted EBITDA contribution to Empire to $309.4 million (5.16% of sales), compared to $206.9 million (4.68% of sales) from the same period last year.
• A 78.3% increase in net earnings to $100.4 million compared to $56.3 million in the same period last year.
• A 50.7% increase in adjusted net earnings to $111.7 million compared to $74.1 million from the same period last year.

Congratulations on this strong showing in Q2, Empire and Sobeys!

Empire Company Limited

Sobeys

NORTH DAKOTA – A jury in North Dakota is deciding the case against Aaron Johnson and Derek Johnson, two brothers accused of defrauding the federal government out of about $2 million.

As we previously reported, the brothers, who operated the North Dakota potato company Johnson Potato, were charged with conspiracy and making false statements. The defendants are accused of applying chemicals, including a substance known as "Rid-X" that's designed to dissolve solid materials in septic systems, while also adding spoiled and frozen potatoes to their stored crop. The actions resulted in the potatoes rotting.

ABC News reports that prosecutors claimed the brothers exploited the federal government’s crop insurance program, which is meant to help farmers recover from losses due to naturally occurring events like bad weather and the wet breakdown of inner potatoes after harvest.

Several farmers who grew near the brothers testified at the 8-day trial that they had good potatoes that did not spoil during the time the brothers were being reimbursed. Speaking to the jurors, Assistant U.S. Attorney Clare Hochhalter said, “They looked for weaknesses in the system when the farmers who testified looked for faith in the system.”

At the trial, defense attorneys told jurors that prosecutors have no hard evidence against their clients and claimed that the key witness against the brothers is a convicted felon with no credibility.

For now, it is up to the jury to decide. Stay tuned to AndNowUKnow as we continue to follow this case.

WENATCHEE, WA - With KIKU® apples set to return this coming January, Columbia Marketing International (CMI) shared the story of how one longtime fan lost 42 pounds just by eating one KIKU® apple every evening.

“I absolutely love these super sweet apples,” said Melinda Geda of Florida, noting that their flavor also helped control sugar cravings all while delivering beneficial nutrients. “I know drinking a lot of water helped me on my weight-loss journey, but KIKU® apples were the answer.”

Sales for the apple continue to be strong and shipments have already begun from CMI's growing partners. According to a press release, shoppers are willing to spend more to purchase premium KIKU® apples despite an average retail price approximately 40% higher than the category average for all apples.

In fact, data from the Nielson Perishables group indicates that sales for the KIKU® apple skyrocketed by over 300% between January 1 and February 1, 2014. Sales maintained momentum into February and remained at peak levels through mid-March. Last year, KIKU® sales did not fall back to the levels of early January until the first week of April.

Shipments are set to begin starting the second week of January. As CMI gears up for another successful year, Steve Lutz, CMI’s Vice President of Marketing, shared his excitement regarding this most recent crop. “Overall we are very pleased with the flavor profile of this year’s KIKU®,” he said. “Consumers will be happy with the vibrant red striping that they have come to expect with KIKU® and their incredibly sweet flesh.”

CMI notes that North American availability along with KIKU® apples available out of the Southern Hemisphere in the Spring and Summer months may eventually lead to a year-round program with tonnage increases as new orchards begin to produce more fruit each season.

CMI expects to ship U.S. grown brand KIKU® apples through March this season.

CMI

IRWINDALE, CA – Ready Pac Foods, Inc. has named Cary Okawa as its Vice President and Corporate Controller. In this role, Cary will be responsible for the accounting operations of the company and will work closely with Ready Pac’s Chief Financial Officer, Sally Erickson.

According to a press release, he will also ensure quality financial reporting and the safekeeping of accounting records and company assets as well as maintaining internal controls and budgets.

Most recently, Cary served as the Vice President and Corporate Controller at Newport Corporation. In that role, he assumed global responsibility for financial reporting, planning and analysis, SEC/GAAP compliance, shared services and enterprise risk management.

He is joining Ready Pac with more than 24 years of finance and accounting experience, having developed his skills with companies like Newport Corporation, Ceradyne, Advanced Medical Optics and Tektronix.

He earned a Bachelor of Business Administration with a major in Accounting from the University of Hawaii. According to a press release, when he obtained his accounting certification, the results of his CPA Exam earned him the #1 ranking in the State of Hawaii.

Congratulations on this new position, Cary!

Ready Pac

CINCINNATI, OH - Kroger's Chairman of the Board, David B. Dillon, has announced his intention to retire from his position at the end of the year. When he steps down on December 31st, putting a capstone on 38 years of exemplary to the retailer, CEO Rodney McMullen will be assuming Dillon's former position as Chairman.

"For Dave, Customer 1st– which truly put our customers at the center of how Kroger runs its business – was more than a successful business strategy," McMullen shared. "It was a philosophy that he believed and lived through his actions every day, and as a result he inspired thousands of our associates during his many years of service to Kroger and Dillons Companies. He understood that Kroger's greatest asset is the trust that our customers, associates and shareholders have in our company. We are all the beneficiaries of Dave's extraordinary leadership."

This was the second major change to Kroger's Board of Directors announced that day. According to a press release, Nora A. Aufreiter was also elected to the Company's Board of Directors during this period of decision making. 

"We are delighted to welcome Nora to Kroger," Dillon shared. "With her broad business experience and consumer and digital expertise, Nora will be a great addition to Kroger's Board."

McMullen, who has served on Kroger's Board since 2003, has worked closely with Dillon over the course of his career with the retailer. During their time together, the two were instrumental in crafting Kroger's Customer 1st Strategy through their creation of a long-term price investment strategy for the retailer. This strategy allowed Kroger to deliver sustainable business growth and shareholder returns, while saving shoppers $3 billion annually through price cuts. This laid the foundation for the growth plan Kroger revealed in October 2012, which expands the Customer 1st Strategy by:

• Accelerating growth in Kroger's core business
• Improving customer connections
• Expanding Kroger's retail presence in new and existing markets
• Innovating in order to foster unique competitive positioning going forward

Dillon also worked to establish Kroger as a leader in sustainability, working to reduce energy consumption in stores by 35% since 2000 and its carbon footprint by 4.4% since 2006. Today, over half of Kroger's manufacturing facilities are zero waste operations.

According to a press release, Dillon served as Kroger's chairman from 2004 to 2014 and as CEO from 2003 to 2013, before which he held a variety of executive positions with Kroger and Dillons Companies. Kroger and Dillons Companies merged in 1983.

AndNowUKnow would like to wish Dillon the best in this next exciting phase of his life!

Kroger

HOUSTON, TX - A New York Post report released today claims that Sysco is selling assets worth $5 billion to Performance Food Group in an effort to win regulatory approval from the Federal Trade Commission (FTC). This is equal to approximately one-quarter of US Foods’ revenue.

According to New York Post, Sysco had initially agreed to sell assets with $2 billion of revenue in the December 2013 merger agreement.

Rumors had initially suggested that aside from Performance Food Group, Sysco had also been in negotiations with Reinhart Foodservice and Gordon Food Service to buy assets.  

Last month, Sysco announced that its impending merger with US Foods would be delayed as a result of the FTC discussions, but the company is still expecting to complete the merger before the end of the first quarter of 2015.

Stay tuned to AndNowUKnow for continuing updates.

Sysco

US Foods

TRANSINNE, BELGIUM – Locus Traxx Worldwide EU has appointed Sales Agents in Italy and Spain to head its operations in those countries. These appointments are part of the company’s strategy to bring its business closer to growers in important fruit and vegetable producing nations.

According to a press release, Locus Traxx reached an agreement with fresh produce industry veterans Tomás Rosatto and Domenico Pistolesi. Under that agreement, the appointees' years of experience and extensive contacts as Sales Agents for Spain and Italy, respectively, will work to boost the service Locus Traxx is able to offer.

“This is part of our growth strategy; to implement a direct presence with comprehensive understanding and knowledge for the fresh produce industry in two of the largest producers of fruit and vegetables in Europe,” said Locus Traxx EU Managing Director, Ray Hoffman.

“We think that Tomás’ and Domenico’s relationship and close contacts with growers and shippers will allow us to have a better insight into the needs of our customers.  Our direct presence will allow us to quickly adapt our offer to provide them with the best possible service,” Ray added.

Tomás is a fruit and vegetable importer-exporter with over 27 years of experience in the fresh produce sector. His previous experience includes the role of Director of Quality and Distribution in Utrecht, the Netherlands for Brantina, as well as Export Manager for Asia, South Africa and Canada.

He also has extensive knowledge of quality control and logistics in the fresh produce industry along with a solid network of contacts in Spain that will allow Locus Traxx to have closer contact with the players in the Spanish fruit and vegetable sector.

Similarly, Domenico has over 30 years of experience in the Italian fruit and vegetable sector with knowledge of all stages of fruit and vegetable production, as well as the logistics related to the industry. His experience and comprehensive network will allow Locus Traxx to serve the players in the Italian fresh produce sector as well.

Aside from these new appointments, Locus Traxx has also announced the launch of a new version of its SmartTraxx GO device monitoring fresh produce shipments. The new improvements and new features for 2015 include a light sensor to provide security alerts when the doors of a trailer or container are opened and an accelerometer and extended battery to cover all seafreight shipments.

Congratulations on these new positions, Tomás and Domenico!

Locus Traxx Worldwide

SANTA MARIA, CA – Kalettes™, the new vegetable hybrid of kale and Brussels sprouts, are receiving praise from consumers and media outlets.

Fine Dining Report has named them on its 12 Food Trends Coming in 2015 list. They were also named in Elle Magazine’s 25 Things You Need to Know About This Fall list.

The new vegetable was also the featured photo in a Thanksgiving dinner article printed in the New York Times as well as a string of articles throughout the fall including:

• Women’s Health
• Good Housekeeping
• Prevention
• Shape
• Self
• EveryDay with Rachel Ray
• Family Circle

This publicity has increased consumer demand for Kalettes. According to a press release, supply is increasing as several growers have started harvesting and selling Kalettes but continues to be limited with some of the other growers. Production is expected to increase in the coming months.

“We are thrilled with all the positive attention Kalettes have received from these reputable media outlets and the consumer demand has grown with each story,” said Kraig Kuykendall, Sales Manager of Tozer Seeds America. “Supply is finally increasing and soon consumers can find Kalettes on store shelves across the country.”

Kalettes are not genetically modified and were developed by cross-pollination, according to a press release.  Tozer developed the kale-brussels sprout hybrid after more than a decade of research and is working with several cooperators to grow and market Kalettes. 

As we previously reported, Tozer Seeds has entered into exclusive marketing agreements with six companies to grow and market Kalettes. The companies included are: 4Earth Farms, Classic Salads, Mann Packing, Ocean Mist Farms, Southern Specialties and WP Rawl.  Also in the agreement, Kalettes seeds are sold by Johnny’s Select Seeds to small farmers and home growers.

With all of the buzz that has been building, it will be interesting to see if Kalettes will be one of the next big produce trends in 2015. I will certainly be tracking this as their nationwide release nears.

Kalettes

Tozer Seeds

WISCONSIN, UNITED STATES - Rumors have swirled around Roundy's concerning whether the retailer is preparing to abandon the Wisconsin retail market. Roundy's operates over 100 Wisconsin-based stores, including:

• 91 Pick 'n Save locations
• 25 Copps locations
• 4 Metro Market locations

A divestiture of this magnitude would significantly shift the balance of power in the region. The question is, however, how much truth is behind the rampant speculation and rumors?

Roundy's Spokesman, James Hyland, unequivocally denied any validity behind these rumors when questioned by The Street's Sarah Pringle.

"Any rumors or innuendos regarding Roundy's selling its Wisconsin stores is 100% false. There is no sale of our Wisconsin stores," he explained.

One hears a different story when speaking with DJL Research Supermarket Consultant and Analyst, David Livingston, however.

"They're not getting anywhere in Wisconsin," he shared, explaining why he believes that virtually all Roundy's locations north of the Illinois state line, save its Metro Market line, are on the table. "Same-store sales continue to plummet. There's tons of new competitors. Everybody's looking at them."

David told The Street that he expects Roundy's to begin selling off store locations in small bunches every few months.

A fellow analyst with Moody's Investors Service Inc, Mickey Chadha, disagreed with David's view somewhat. He shared with The Street that while he agrees Roundy's executives are paying close attention to the proper regional makeup of their stores, he isn't confident a Wisconsin asset sale is the focus.

"Roundy's has been in more of a consolidating mode of evaluating store profitability based on where they are located," he said. "Obviously I think there are going to be more closures, but it depends on how many to [achieve] the optimum level store base."

If Roundy's does choose to sell its Wisconsin assets, The Street notes that Festival Foods, Whole Foods, Trig's and Piggly Wiggly could all be possible buyers.

Only time will tell how this situation will develop. Be sure to stay tuned to ANUK, however, to find out the latest.

Roundy's Inc.

UNITED STATES - Key data from the U.S. Department of Agriculture reveals that women are becoming a growing force in the agricultural community. Between 1970 and 2012, for example, the number of female-run farms in the United States has tripled to nearly 14%.

According to NPR, this statistic likely understates the importance women play on America's farms. Womens' labor is often not included in the official USDA numbers because of the way in which farm businesses are structured. One third of farms are operated by married couples, but men show up in demographic data more often because these farms are often in their name.

"Women have always worked in agriculture, historically. I think a key issue is whether or not it's counted," explained Julie Zimmerman, a Rural Sociologist at the University of Kentucky. "If you see working on your farm as being part of your role as the spouse or the wife, as helping out, then you might not even recognize it as being 'working on the farm,' even if you're doing it all the time."

Women like Mary Kraft, the Owner, CFO and driving force behind Badger Creek Dairy outside Fort Morgan, Colorado, are changing this perception in the industry, however.

"In the past you had to be this big, burly guy with forearms the size of a post in order to turn a tractor, because they didn't have power steering," she shared with NPR. "It used to be you didn't inherit if you were a girl from a farm family. And I think [now] people are going, 'I want somebody who's going to carry on the farm. So if it's the young lady ... awesome.'"

These numbers also do not count the increasing number of women working in a professional capacity behind the scenes for some of the biggest brands in produce. Women fill key roles on executive boards as well as on marketing, sales and retail staffs, many of whom AndNowUKnow works with on a daily basis.

It will be fascinating to see how these demographic numbers continue to grow and evolve over time. After all, who knows where the industry will be another 40 years from now.