New Hope Network is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Sitemap


Articles from 2020 In March


IdeaXchange

How the Upcycled Food Association is making environmentalism profitable

upcycled-food-association.png

Provide me a forum, and I’ll gladly wax on about how upcycling is a revolution obsessed with creatively challenging tradition. I’ll argue that we should always hold our food system subject to improvement regarding the way in which we value resources. That we can (and should!) elevate our standards to always seek “best” use in times of increasing constraints. 

As my grandfather never hesitates to point out, though, the practice of upcycling is traditional wisdom with a trendy rebrand. He reminds me that it has always made both dollars and sense for food producers to do more with less. That waste is money, and nobody at the heads of both the kitchen and boardroom tables likes wasting money. This is why we have broth (from bones), “baby” carrots (from full-size carrots too ugly to sell as is), whey protein (from cheese’s byproduct) and less savory examples such as hot dogs (from everything but the squeal!).

Somewhere along the "whey" though (forgive the pun), the system got inverted. Instead of canning tomatoes to preserve their shelf-life, we started growing tomatoes specifically for the purpose of canning. Now there are dairy processors whose primary product is protein powder and byproduct is cheese. 

If you ask me, it’s not the tactics, but rather the philosophy that makes “upcycling” a relevant and compelling movement. When done authentically, upcycling is environmentalism that happens to be profitable. Profit is the means, protecting our planet’s precious resources is the end. 

With this in mind, we’ve made it our mission at ReGrained to champion Upcycled Food as a paragon for sustainable consumption. We are proud to be among the first to tout the model, and to have coined the phrase “Edible Upcycling,” to distinguish rescuing overlooked and undervalued foods from the term's origins in hardgoods (from crafting used bicycle tubes into wallets to sinking decommissioned subway cars to become artificial reefs). Recently, the “Upcycled Food” industry was valued as a $46.7 billion prize, an impressive sum considering its nascency, but one we would argue is underestimated. 

Helping to found the newly minted non-profit Upcycled Food Association takes our commitment to the cause to the next level. When Turner Wyatt, the CEO, approached me with the concept, I was on board before you could say “circular food systems." It felt like fate.

In 2016, I authored a thesis on cross-sectoral strategies for supporting the development of upcycled markets to fight food waste for my Sustainable MBA—forming a trade association was a top tactic. Barnana were already onboard, sooned to be joined by our other friends and peers at Renewal Mill, Imperfect Foods, and more. We’re now coming up on 100 members globally, and we’re only just getting started. 

The central objective of the Upcycled Food Association is to further the development of markets for upcycled food products that elevate food that would otherwise be wasted to higher uses, and have tangible benefits for both the environment and society. In practice this includes activities such as collectively improving our messaging so that the value of consuming food that would have otherwise gone to lower uses (waste) is understood by our customer… without “yucking their yum," so to speak.

At ReGrained, we have tested countless ways to communicate to consumers the value of upcycling food from the catchy (albeit confusing) “Eat Beer” hook to the new Upcycled logo we debuted in 2019 (a modified version of which we donated as the association’s logo). Upcycling effectively requires educating the market, and we strive to lead by example.

From our early days at farmers markets, to in-store product demonstrations, record-breaking crowdfunding campaigns, social media, the TEDx stage, speaking at conferences, on podcasts, to press, bloggers, influencers, the universe of social media, and frankly, to anyone who would listen... we have always held our messaging subject to improvement.

Thanks to the NRDC, ReFED, and other champions’ collective efforts to mainstream the food waste problem and opportunities, our movement is no longer just an esoteric campaign of champions—it has officially entered the global zeitgeist. In Washington, D.C., efforts have been encouragingly bipartisan, although practical policy solutions are still needed. 

As an industry, innovation has been accelerating in exciting ways. Upcycling food is a business model that transforms “waste” into value, or, more crudely put, trash into cash. We’ve seen brands emerge to seize the opportunity of novel supply chains, as well as the typical crop of “me-too” business models that a healthy market can support. 

As an organization, our mission is clear: build a food system in which all food reaches its best use. We cannot and do not want to do that alone! Whether you are a food producer that could use upcycled ingredients in your products, a product developer looking for an innovative edge, an investor interested in tracking the space, a retailer open to merchandising upcycled products, or an entirely different type of stakeholder—we want you in. 

Next up, we will be developing standards, a certification process and a number of other exciting initiatives that we’ll be sure to keep you posted about. 

For now, though, we hope the upcycling movement provides you with a bright spot during these often bleak and uncertain times.

Have some big ideas or thoughts to share related to the natural products industry? We’d love to hear and publish your opinions in the newhope.com IdeaXchange. Check out our submission guidelines.

IdeaXchange

Natural products industry on front lines of coronavirus crisis

Steven Hoffman, managing director, Compass Natural

From the moment in early March when New Hope Network first announced the postponement of Natural Products Expo West— what Forbes.com contributor Douglas Yu referred to as the "Super Bowl of natural CPG"— to mid-March, when UNFI CEO Steve Spinner joined a group of food, retail and distribution leaders at the White House to help ensure that America's grocery shelves stay stocked— no small feat during the panic buying rush of the past few weeks— the COVID-19 pandemic has put the natural products industry on the front lines of the coronavirus crisis.

There have been many challenges and a few opportunities associated with this position. Stores find themselves short-staffed and have had to cut hours to deep clean and restock empty shelves.

Restaurants and food service operations have had to shut down, putting many out of work. Long lines and controlled entry have been reported in some stores. Many retailers are dedicating senior hours—dedicated times to give elderly people a chance to have access to products before the stores open to the general public.

On the other hand, retailers are hiring, often providing jobs for laid-off restaurant and food service workers. Natural products grocers including Whole Foods Market and Natural Grocers are offering interim incentives on top of current hourly rates to keep and recruit labor. In addition, Whole Foods is partnering with Amazon to expand resources and capacity for door drop and home delivery.

Kroger CEO Rodney McMullen told CNBC in late March that the Cincinnati, Ohio-based grocer, which operates 2,800 stores in 35 states, hired 2,000 people in March to keep up with increased demand and still has 10,000 openings to fill. Walmart announced it wants to hire 150,000 temporary workers through May, and Amazon is hiring an additional 100,000 workers.

Sales, too, are through the roof for natural products retailers and CPG stores across the country, as people stock up on a month's worth of groceries and staple goods instead of a typical week's worth. Sales of staples soared in March, Food Dive reported, indicating that consumers were preparing for the long haul. Add to that the fact that, with the closing of restaurants and cafes in many states, and with the call for social distancing, people are now eating at home, putting further strain on conventional and natural foods retail markets.

'You need to get out on the floor and stock shelves!'

Mustard Seed Market & Cafe, which has two full-service natural foods supermarkets and a bakery in Ohio and renowned for its restaurants and catering, the stores have pivoted to offer in-store take-out meal solutions, Gabe Nabors, CEO said. The state of Ohio on March 15 ordered the closing of bars and restaurants. Mustard Seed has been promoting this expanded service on social media, and recently posted the steps it is taking to sanitize its stores, ensure product availability and protect workers and customers.

"We are packaging our most popular soups from our restaurant in 'fresh or freeze' containers and are ramping up in-store prepared foods," Nabors said. "We're pivoting from banquets and catering to contacting assisted living homes, local nonprofits, hospices and elsewhere to let them know we have healthy prepared foods available for takeout.

"We're also in talks with Instacart to expedite the launch of a delivery service. A large percentage of food sales in America is through restaurants and food service; with that closed, it puts added pressure on the grocery stores. As such, our entire team has been stocking shelves—if you have an office job and it's not mission critical, you need to get out on the floor and stock shelves!" he adds.

At Natural Grocers, the focus has moved to staples, produce and perishables, said Alan Lewis, director of public policy for Natural Grocers.

"Our stores have been the calmest, most organized places to shop and our customers have been exemplary in not hoarding and helping create a sense of calm and the feeling that we are all in this together," Lewis said. "People have been so cordial and kind to each other and thanking everyone in the stores for making the food available.

"Currently, there is plenty of food ready to be delivered in the supply chain. The outages are not shortages," Lewis said. To ensure steady supply, food workers, from agriculture to manufacturing and retail, should be termed essential workers, meaning their production is critical to the health and wellness of the country.

"We've been in conversation with the Colorado Department of Agriculture and others asking them not to stop essential agricultural workers," he said. "As a result, CDA has notified law enforcement officials, requesting that agriculture workers be able to travel to and from work."

Errol Schweizer, a veteran of food retailing, agreed.

"People working overtime in delivery, back of house, stocking shelves, cashiers, e-commerce fulfillment—they are now critical infrastructure to keeping this country running," he said. "We should be cognizant of the stress on store staff and provide more resources to help them, for example, living wages, free child care, paid sick leave, collective bargaining rights, proper protective equipment, etc.

"The cooks, clerks, packers, loaders—the folks that often are poorly paid, overworked and invisible— how often have we heard pundits refer to them as unskilled? Now that everyone sees how crucial— and skilled—they are, we need to assure they are treated with dignity and respect," said Schweizer, who previously served as the head of grocery purchasing for Whole Foods Market.

Industry responds to heightened demand

For distributors, which have received generally positive reviews in responding to the crisis, sales are up dramatically, too. Leading natural products distributor UNFI's stock rose from closing at $5.97 a share on March 2 to closing at $11.93 a share on March 18. (On March 30, it closed at $8.50 a share.)

"It is important for all Americans to know that they can continue to count on companies like ours to keep stores well-stocked with a variety of food and wellness products during this critical period," Spinner said in a statement released March 16. "In addition to having business continuity and safety plans in place to help keep America fed, UNFI is supplementing its coordination with federal, state, and local government agencies by now collaborating directly with the White House and industry peers. We firmly believe that increased levels of public-private collaboration can further enhance UNFI's around-the-clock efforts to meet our customers current and future needs."

Natural and organic products manufacturers, too, are scrambling to satisfy increased demand. In a LinkedIn post, Wayne Wu, general partner of VMG Partners, wrote, "We're hearing many shelf stable food, beverage and supplement brands are generally doing well in brick and mortar stores as consumers stock up, but also seeing a 50%+ sales lift in the past couple of weeks in their e-commerce or grocery delivery channels, such as Amazon, Walmart.com, DTC or Instacart, as consumers are potentially pantry loading, but may lead to more permanent behavior change in how they purchase their more consumable-type products that they've traditionally purchased at a brick and mortar location to a more permanent lift online for these type of consumable items."

Working from home is not stopping Steve Wangler, vice president of sales for The Good Crisp Company, maker of all-natural canister chips. Working with Presence Marketing as its broker, Wangler said, "We've been in contact with every single field and accounting rep of Presence Marketing. Even sidelined, together we are engaging with retailers virtually, keeping them apprised of stock situations, asking what they need, etc. The entire Presence team has been very proactive, highly responsive, highly engaged, and looking for ways to support retailers and brands. Also, we are attracting consumers that are new to our brand through our online efforts, and we're hoping we'll keep those consumers once they experience our product." 

Noticing a trend accompanying consumers' response to the coronavirus crisis, Eric Schnell, cofounder of the marketing collective BeyondBrands and mood33, a cannabis- and CBD-based beverage line, was informed by his Florida distributor that mood33's top-selling CBD SKU, Energy, was replaced by its Calm formula in March. "It's an indicator of how stressed people are feeling right now," Schnell noted.

"As a service provider we are doing our best to support our natural products clients, and on the brand side, we are seeing an immediate uptick in sales," he said. "Every manufacturer I've spoken with is still operating at full capacity, including supplements, beverages and food, to meet demand from both brick and mortar and e-commerce."

'Unity in the community is key'

The BeyondBrands team, like other natural products brokers, distributors and service providers throughout the country, is rising to the challenge and doing its best to help partner brands deal with retail demand. 

"Rather than going into stores to sell items, we are recommending going into stores and offering to help stock shelves," Schnell said. "Connection and collaboration are key right now. More than ever, it feels like people need unity in the natural foods community. Whether you are on the service, brand or retail side, we are all in this together and we have to see ourselves through this, together."

At Dr. Bronner's, demand for soap and hand sanitizer has spiked, and the company is doing its best to fulfill the increase in orders, David and Michael Bronner said in a statement published on March 16. "In spite of our best efforts, constraints prevent us from fully meeting orders: our hand sanitizer, for example, can only be produced at FDA-licensed drug manufacturing facilities, and is being produced at 600% our usual rate."

In addition, the Bronner brothers wrote, "We are allocating a reserve of 2% of all hand sanitizer production to donate to at-risk communities and the organizations that serve them, so they have access to our hand sanitizer, as well. Please also buy only what you think you need, so that everyone who needs our products can obtain them. This is an important time to remember that we are all connected and need to look out for each other, now more than ever."

As for New Hope Network, after announcing that Expo West was not just postponed but cancelled for 2020, the company that leads communications efforts in the natural industry announced in a video update on March 20 that it would provide assistance to small businesses hurt by the decisions.

"Due to the decision to cancel voluntarily and without being asked to do so by local, state or federal edict or other force majeure circumstances, our insurance provisions were not triggered and significant costs and liabilities were incurred by New Hope," said Carlotta Mast, New Hope's senior vice president of content. "To help support those most impacted by the Expo West cancellation, our parent company, Informa, has established a $5 million fund that will be disbursed under the guidance of an independent advisory council made up of 20 industry leaders. The advisory council is working on this task now and is aiming to have its guidance delivered to the New Hope Network leadership team by the week of April 6," she said.

New Hope Network is focusing its energies on the upcoming Natural Products Expo East, slated for Sept. 23-26, in Philadelphia, Pennsylvania. The company is issuing a full credit for any Expo West exhibitor or sponsor, which can be applied to Expo East, Expo West 2021, or to its media and market research publications. Expo West badge registration and education fees also will be fully refunded in the coming weeks. New Hope also announced a free product directory listing for 2020 Expo West exhibitors along with upcoming webinars and education, and referred further questions to its Expo West FAQ page.

In closing, John Mackey, CEO of Whole Foods Market, summarized how our industry has risen to the occasion in serving community, workers and customers during the coronavirus crisis. In an email, he wrote, "If you've shopped our stores in recent weeks, you've experienced our team members' dedication and diligence to serving your community during a time of uncertainty. None of this is lost on us…

As a company, Whole Foods Market is adjusting to the current circumstances that all of us are facing during this unprecedented time. We believe that the service we provide as a grocer is an essential one, and we are committed to continuing to serve our customers in a safe and responsible manner, both in our stores and through delivery. Thank you for your kindness and patience as our team continues to work hard to serve our customers and communities. Please take care."

Steven Hoffman is managing director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic and sustainable products businesses. Contact steve@compassnaturalmarketing.com

Have some big ideas or thoughts to share related to the natural products industry? We’d love to hear and publish your opinions in the newhope.com IdeaXchange. Check out our submission guidelines.

How one Expo West Pitch Slam semifinalist continues to rise without taking outside capital

BrandNewBlueprint.png

Even before the complexity and impacts of COVID-19, fundraising has always been a mystifying topic and source of constant attention for CPG brands. For many, fundraising is a large part of the brand’s evolution. So at a time when raising money may be even more complex, can brands drive epic velocity and value without venture capital investment?

Natural Products Expo West 2020 Pitch Slam semifinalist Sadie Scheffer, founder and CEO of Bread SRSLY, a gluten-free sourdough company in Berkeley, California, tells the impressive story of building her brand without raising any outside investment (and still clearing millions in revenue). This full story was originally featured on Smoketown’s Brand New Blueprint podcast.

Here are a few pieces of brand-building advice Sadie shared.

Baking (and running a business) is all about balance. It is chemistry and creativity–get comfortable with the calculations of both.

“Everything has taken a lot of patience. I’m a patient person, but I’m also an impulsive person, so it’s been an interesting balance.”

When it comes to running her business, Scheffer learned from the art of baking—the process is fairly forgiving and can tolerate levels of imprecision and trial. From starting her career at MIT to transitioning to her gluten-free baking business built on a love story with her now-husband, Scheffer has learned that in engineering and business, both have levels of problem solving and forgiveness that she has learned to become quite comfortable balancing.

Rely on connection and integrity to drive loyalty.

“We put a ton of work, time, effort and money into customer service. Our customer service [and listening] is as good as our product.”

In order to build a strong connection with her gluten-free tribe, Scheffer developed a love affair with a very nourishing and emotional food—sourdough. She attributes much of the loyalty and love that she has been able to cultivate to really listening to her consumers and delivering on not only a product level but also a personal level that fills a deep need. Embracing wild fermentation, leading with integrity and taking care of her customers is a crucial part of the brand’s success.

Win with calculated, regional and intentional growth.

“We run our business the sourdough way. It’s slow and it has to be slow. You cannot make sourdough quickly, and we are running our business the same way.”

Bread SRSLY is in 200 doors, which is traditionally not a huge reach for a business that closed $2 million in revenue in 2019. But for Scheffer, velocity is what really counts, as does building strong relationships with key accounts.

Know thy numbers (on a daily basis).

“It came down to growing at the rate of our cash flow, and that was really as fast as I knew how to grow. I wasn’t forced to grow faster than this ... It’s easy to feel like you are getting bossed around by the numbers, but you can boss the numbers around, if you know what they mean. Understand your profit and loss statement … numbers are a storytelling tool.”

From a nearly vertically integrated supply chain to self-manufacturing and distribution, Bread SRSLY has not taken an inexpensive route to market. Because of this, Scheffer has had to rely on risk tolerance and a deep understanding of her financials to stay self-funded.

In terms of owning your financials, “It’s something everyone can learn to love or figure out.” One "aha" moment she had is that financials are a living and breathing project, not something you look at once. It’s a vital part of the business that is scary but also extremely crucial (and freeing).

Take the long view.

“Right now in particular, we’re having a cashflow hiccup. But there are so many options that are not equity. Equity is so standard and expected. There is so much social pressure around what money is smart and what money is "not." You have to have the discipline to not care about people criticizing you [based on your own decisions]."

The transition from co-packing to self-manufacturing in 2017 was an extremely stressful change for the business. The company had to find a gluten-free kitchen on short notice, hire a team overnight and purchase equipment. The capex for this was far beyond anything Scheffer expected and caused a great deal of focus, pause and questioning to continue the path of self-funding. Through a variety of exercises in exploring various options at that time and again now, when cashflow is top of mind for every brand, she recommends taking the long view of how different types of capital affect your business growth over time.

A few resources Scheffer finds helpful:

Catch the full episode and many more incredible brand stories from Smoketown’s Brand New Blueprint podcast.

5 natural products that represent the 'plants elevated' trend

Quinoa

NEXT Trends 2020 series: In an effort to help support retailers and brands, we will be publishing regular brand features for the next few weeks. Brands are selected from those that registered to exhibit at Natural Products Expo West 2020 and were curated as great examples of one of 50 trends New Hope Network is monitoring in the marketplace.

These trends are part of New Hope Network's NEXT Expo Guidebook and trend hierarchy.

Today, we look at five companies that are innovating in the "Plants Elevated" trend within the Plant Wisdom macro force. No matter how convicted consumers are in their food-based values, nothing sells unless it delivers a good experience. When it comes to vegan and vegetarian innovation, the original bar was set low. But gone are the days of bland tofu scrambles and dense bean burgers. Today’s plant-based consumer expects intense flavor, satisfying crunch and umami-like tastes. Brands are not just meeting the need for alternatives to animal-based products; they’re winning over long-time vegans, new converts and flexitarians alike in their R&D approach and creating really good-tasting (sometimes artisan, small-batch even) plant-based options that conjure a cult-like following.

Nubocha, Pop Zero

1. Nubocha

What is it? Boasting the “cleanest gelato label ever,” almost all of Nubocha’s recipes are made from nuts, spring water and allulose. They hand-roast and vacuum-grind whole nuts themselves.

Innovation: Nubocha is “the world’s only vegan, low sugar, low calorie, gelato” made from whole food and sustainably sourced ingredients. Nobucha claims to be the only gelato that uses just allulose as a sweetener, a nearly calorie-free, low-glycemic, premium rare sugar found naturally in foods like figs, with no aftertaste.

2. Pop Zero

 What is it? Pop Zero uses a combination of three core ingredients—popcorn, algae oil and sea salt—to create a simple popcorn that’s nutritious and flavorful.

Innovation: This very low calorie snack comes in interesting flavors like Chili Lime and is made with unusual kernals like the “mushroom” kernel, as well as algae oil and algae flour, to make it healthy and delicious.

Foodies Vegan, Crunchsters, La Colombe

3. Foodies Vegan

What is it? Burgers made from artichoke hearts and cashews.

Innovation: The maker of Pumpfu, Foodies Vegan’s pumpkin seed tofu, also makes a line of artichoke burgers and frittatas—all made without fillers, preservatives, concentrates or flavorings. 

4. Crunchsters

What is it? Crunchsters is a new kind of snack made with sprouted mung beans (what bean sprouts are made from).

Innovation: Crunchsters uses sprouted mung beans as an alternative to popular snack grains like wheat and corn.

5. La Colombe

What is it? La Colombe's coffee beverages stand out for the company's ethical, long-term trade practices with growers.

Innovation: La Colombe positions its Oatmilk Draft Latte as “better for everyone” and is plant-based and clean label. The company also makes the first texturized cold latte served in a can or on tap. It’s naturally sweet with no sugar added.

Walter Robb talks about recovering from COVID-19 and crisis leadership

Expo West 18 Afternoon inspiration with Walter Robb In Session

Walter Robb knows a little about managing a crisis. As Co-president of Whole Foods Market during the Great Recession, he had to manage plunging in-store sales just as e-commerce was finding its stride in natural products. Now he knows something about the coronavirus. We reached Robb days after leaving the hospital as he recovered from COVID-19 infection with the coronavirus. We talked about the virus, the economic crisis and what leadership will mean as the natural products industry and the world face both.

You’re recovering from COVID-19 right now. What do people need to know about it?

Walter Robb: I think different people take it a different level of seriousness, but I'm here to tell you it's real. I'm a healthy, strong dude, pretty tough, but this thing took me to my knees. I had been at home, just powering up on supplements and building up my immunity and trying to tough it through, thinking my body would fight. Then, finally on March 23, they wanted me to go the hospital, which I did for three days to stabilize. My personal physician was able to get the drug hydroxychloroquine that was proven to work in China and South Korea. And I was pounding supplements—vitamin D, vitamin C, zinc, magnesium, just the whole suite—because my doctor is a functional medicine doctor. It still hit like a ton of bricks. My fever was 103. Each day's been a little bit better. I'm isolated a home for a few more days, even from my family. I would just say ‘Look, take this thing seriously. It's real.’

Do you have a sense of how the natural products industry is reacting to the coronavirus?

WR: We’re doing what we always do, which is trying to find a way to pull together. Gary Hirschberg is setting up some webinars with different entrepreneurs. Various folks have held calls with CEOs to help them share and think this through. My sense is that folks are finding a way to stay connected in some way shape or form to share the stories, share encouragement, share tips and ideas about how to navigate through this.

Some of this, of course, is health care stuff, like you know what do you do, what do you know, what does this thing look like, what does it actually do? Some of it is financial around steps you need to take for your business. And some of it's just leadership: your responsibility for your team and to the community. Those sorts of conversations are helpful, because as we’ve isolated, we're still human beings and we want that connection. I think it's difficult not being in touch with one another. Everybody is Zoom’ing up a storm. I think staying connected, whether it's on Instagram or whether it's on any sort of platform is helpful to feeling like we're going to find our way through this together.

What do you think companies need to know about leadership during this crisis?

WR: I think leadership is everything. I think leadership is essential. In any different time, a moment will call for leadership, but you never know exactly when that moment will come. Leadership's a wonderful thing day-in and day-out, but in these sorts of moments, leadership is that ability to provide an uplift for example, a caring. That’s just essential right now. Those who have that quality and that ability, they need to lead in terms of helping their own team understand what steps they are going to take. The team needs to see the calm. They need to feel like somebody's got a sense of where they're going and is thinking about their well-being, thinking about the well-being of the company, thinking about the well-being of the country, so they can have some confidence that you know we're going to find our way through this, as dark as the days may seem sometime and disorienting as it may be. This is the time you must find the strength and leadership. It's really at the core of everything I'm here in whatever role that you're in.

Retailers are playing a huge role in a radically transformed American Life. What would you like to see them do?

WR: In our business, we're in the healthy food business, the healthy products business and the healthy supplements business and our premise is that if you use our products you will lead a healthier life and therefore you will have greater human immunity, greater health and greater strength. So, whether you're a brand, whether you're a retailer, whether you're a distributor, however you play a part in this, your job is to continue to remind people that these things that we're doing can help them build that greater proactive health strength. I think the retailer’s job is to provide these products at a fair price, to provide the information associated with the products and to provide the service.

Can you recall a challenge that tested you in terms of leadership? What did you learn from that?

WR: The nature of the business is that it’s not a straight line. You wake up in the morning and you are by nature looking to see what’s going to come at you from left, right or behind you. That’s just the way the world works. If you think otherwise, you’re not really experienced in business. I think about the Great Recession. I never knew where the bottom one was. In other words, the sales kept falling, and falling and falling. We were a pretty large company, and we had to try to sort out what decisions do we make and how do we make them. This is where you put your pure values. We knew we had to do something, because the world had changed. Our revenue was not the same. We didn't have folks coming in and no one had the money anyways, so they weren’t spending. We tried to put ourselves on the line first. We cut our own salaries and froze our benefits. We said we weren’t going to reduce jobs in the store, but we did reduce jobs at the headquarters. We looked at any other way we could cut costs. And we stopped building stores, which was a big savings for cash. You have got to manage for cash, you’ve got to keep your liquidity in place, in whatever fashion that you do that. Thinking back to that experience, we had to make a bunch of hard choices and we had to make them quickly. We had to continue to make them until we could get to a place where we felt like we could sustain ourselves, even at the lower sales level. That challenges you to the core because one easy place to cut in a business is your team. In our industry, which has some values, people tend to think differently about it and be creative—‘What other business can I create so that I don't have to do that?’ In the end, leadership is doing what's best for all the team members.

How does crisis challenge teams and working relationships, and what are some of the opportunities in that?

WR: Crisis will challenge teams. Any sort of tensions, any sort of disagreements or any sort of shortness of temper or patience will come out in those conversations. But they can also bring teams together. They can also tie people together in a greater common cause and they can bind teams together. This is our sense of belonging. The team has become the way that you help to define yourself and keep your social identity intact. It’s not about any one person. It's about the team itself and I learned that lesson. During times like this, take advantage of working together, drawing on the different people strengths, bringing people closer together, deepening the sense of purpose and reason that you are working toward and dedicate yourself to serving your people.

You have introduced many people in natural products to the concept of authentic leadership. Can you offer a quick definition?

WR: Authentic leadership becomes easier as you get older. You begin to accept yourself more because you've been through some ups and downs. Life has kicked you around a little bit, and you've deepened. Authentic leadership for me is being a leader who is authentic. People on your team and the people in your company feel like you are a person who can relate to the things they have going on in their life. If they don't feel like you can relate to them, why would they follow you? Authentic leadership at the core means being authentic to yourself.

Why is authentic leadership so important during a crisis?

WR: One of the number of lessons I've learned as a leader is that in times like these the most important thing is the communication, communicating constantly, frequently, openly, honestly and truthfully. Team members in my experience can handle it. If you will tell them the truth. That means the good and the bad. If you will tell them the truth, and you tell them that you care, and you give them the information, they will do the work around processing it and they will accept it. It's when you give them half truths, not the right information and not on time, and you do it from a place of not really caring, that’s when organizations split apart. Authenticity simply means that you've done your work as a person to become authentic, to become someone who knows who they are, and you're not trying to be somebody else and you stand true to that in the way that you lead. They will listen to you and they will follow because they believe you’re being authentic.

Are you seeing examples of authentic leadership right now?

WR: What I'm telling you is true at any time, for any, any leader. But if someone's been inauthentic, they’re not going to all of a sudden become authentic now. You see some of those folks who have real gifts but they're very flawed as leaders. I don't think it helps to mention any particular names, but you're seeing a lot of flawed leadership out there right now, stuff that is self-centered leadership. It's not authentic and it's not helpful. And yet, you also see who people respond to, like Dr Fauci. They're responding to the dude because he just kind of shoots straight and he knows what he's talking about him. So there's an example of somebody leading authentically right now. He is just up there again himself and being pretty consistent. 

Are there examples in the natural products industry?

WR: My friends at Hungry, which is an office catering company in Washington, DC supporting local chefs, pivoted to doing ‘hungry at home.’ Kirsten Richmond at Revolution Foods makes affordable healthy food for school kids and she pivoted to serve kids in the inner cities. Again, part of what I think sets our industry apart is that we have always had an ability and a willingness to serve and to do good things from a mission perspective. I hope you will tell some of the stories of how companies even in the tough times are finding ways to serve and support the greater sense of community.

How do you see the natural products industry emerging from this in X number of months.

WR: X is the key there. History is on our side. Our fundamental thesis is correct. I started in 1978 in this business with my first little store. So, I've seen the time it takes for this to become accepted, but I would argue that the idea that food and the quality of food matters to your health has now become a mainstream idea. Your lifestyle is the most powerful thing you have if you desire a healthy future. Do you want to take it into your own hands and take care of that or do you want to go with the other way and bounce around the health care system which is extremely expensive and not that effective, certainly no replacement for keeping yourself healthy. We now have a new generation of entrepreneurs that are ready to give brief life into that and bring reality to that and keep bringing their brands and their products and experiences to market. There was an article on CNN basically reminding people that one of the ways you build immunity is through your healthy diet. I'd like to see us as an industry not only making sure we're looking after our own, which is to say somebody's staying on top of these programs and making sure all the information is available to our membership to help them through these times with their business, but that we are also thinking about how we reemerge with a message around the power of natural foods, broadly speaking, and a healthy lifestyle.

5@5: Big Meat's pandemic profit margins spark investigation | Whole Foods sickout strike begins

supermarket meat.jpg

US senators scrutinize meat packers' big profits during pandemic

U.S. cattle ranchers have noted that the surging meat prices brought on by hoarding consumers aren't being translated into higher cattle prices. This has led senators to call for U.S. Department of Agriculture, Department of Justice and Commodity Futures Trading Commission probes to determine why ranchers aren't benefiting from the skyrocketing demand for meat.  Read more at Reuters

 

Organizer of Amazon warehouse walkout fired, Whole Foods sickout strike begins

While Whole Foods employees had originally planned their sickout strike for May 1, International Workers' Day, concerns over the spread of COVID-19 moved the date up to Tuesday, March 31. Additionally, former Amazon warehouse worker and organizer of the warehouse walkout Christian Smalls revealed that he had been terminated by the company and is considering taking legal action against it. Read more at USA Today...

 

How does the Coronavirus Paid Leave Act affect small businesses?

The Families First Coronavirus Response Act, otherwise known as the "Paid Leave Act," requires companies with under 500 employees to give workers affected by the pandemic two weeks of paid sick leave at either the worker's regular rate of pay or two-thirds of it. The law goes into effect April 1, 2020. Read more at KNWA

 

Regulatory challenges in sourcing organic herbs and botanicals from China

While some of the most efficacious ingredients in the world are sourced from China, farmers there are attempting to grow their plants in "a healthy, sustainable manner in an increasingly contaminated environment." Meeting organic requirements, then, is far harder from a U.S. standpoint, and buyers are encouraged to work with suppliers that are thoroughly testing Chinese herbs specificall for both identity and purity on a consistent basis. Read more at Natural Products Insider

 

Companies that stock and deliver food are on a hiring spree

Millions have lost their jobs amid the COVID-19 crisis, but grocery stores and food delivery services have swung the opposite way entirely and will launch thousands of job positions as the weeks go on. Post-pandemic, it is expected that many nations will report never-before-seen unemployment rates as a part of the global economy collapse; the U.S. could see unemployment rise to 31.2% according to the St. Louis Federal Reserve Bank. Read more at Quartz

Bankrupt Lucky’s Market to sell 23 stores, distribution center for $29M

Lucky's Market Luckys Market-store opening.jpg

As part of a court-supervised auction, bankrupt Lucky’s Market plans to sell 23 stores and its distribution center for about $29 million to 10 winning bidders, including its founders and Publix Super Markets, Aldi, Southeastern Grocers, Schnuck Markets and Dollar General.

Niwot, Colorado-based Lucky’s said Friday that six stores will continue to operate: North Boulder and Fort Collins, Colorado; Cleveland and Columbus, Ohio; Traverse City, Michigan; and Columbia, Missouri.

Lucky’s reported on Jan. 21 that it planned to shut 32 of its 39 stores and file for Chapter 11 bankruptcy protection to facilitate the sale of its remaining locations and assets.

About a week later, the better-for-you food retailer announced stalking-horse bids from Aldi and Publix for 11 stores. And the next day, Lucky’s said it entered agreements to sell its remaining seven locations to co-founders Bo and Trish Sharon. That was followed in early February with an announcement that seven Lucky’s stores that had been earmarked for closure would be sold to Southeastern Grocers, Seabra Foods and Hitchcock’s Markets.

Lucky's Market founders Bo and Trish Sharon won bids for two leased stores in North Boulder and Fort Collins, Colo., that will continue to operate. In January, Lucky’s said it entered agreements to sell its remaining seven locations to the Sharons.

Under the auction results reported March 27, Publix won bids for five leased stores in Florida for $11.5 million. Locations include Naples, Neptune Beach, Clermont, South Orange (Orlando) and Ormond Beach.

Hard discount grocer Aldi is slated to acquire six stores, all in Florida, for a total of $7.8 million. Those properties include one owned site in Oakland Park and five leased stores in Coral Springs, Sarasota, Vineland, Colonial Landing (Orlando) and Venice.

Also due to buy Florida Lucky’s stores is Southeastern Grocers, with successful offers for four leased locations—Gainesville, Melbourne, Fort Meyers and Lake Mary for a purchase price of $2.4 million.

Meanwhile, Lucky’s Market founders Bo and Trish Sharon, doing business as LM Acquisition Co. LLC, ended up winning bids for two leased stores in North Boulder and Fort Collins, Colo., for $1.16 million. Those Lucky’s locations will continue to operate under the banner.

The Lucky’s distribution center in Orlando, Florida, will go to Dollar General for a purchase price of $1 million.

Results of the auction are subject to a final sale hearing, scheduled for March 30. Other winning bidders include Dave’s Market for two ongoing leased stores in Cleveland and Columbus, Ohio, for $1.72 million; Seabra’s Market for a leased store in Hunter’s Creek, Florida, for $1.25 million; Schnuck Markets for an ongoing leased store in Columbia, Missouri, for $860,000; Oryana Food Cooperative for an ongoing leased store in Traverse City, Michigan, for $860,000; and Hitchcock’s Market for a leased store in St. Petersburg, Florida, for $275,000.

Lucky’s added that a leased store in Bonita Springs and an owned property in Panama City, both in Florida, may be put up for sale in another auction.

Employment offers will be made to the approximately 500 employees at the six continuing Lucky’s Market locations, the retailer said.

“While our mandate is to maximize value, we are pleased that these stores and jobs will be preserved, particularly as they serve so many families and communities during this critical time,” Scott Moses, managing director and head of food retail and restaurant investment banking at PJ Solomon, said in an email Friday. New York-based PJ Solomon is serving as M and A investment banking adviser for Lucky’s.

Lucky’s financial position became unstable after The Kroger Co. said in early December that it would divest its stake in the grocery chain. In April 2016, Cincinnati-based Kroger announced a strategic partnership with Lucky’s that included an undisclosed equity interest.

supermarket news logoThis piece originally appeared on Supermarket News, a New Hope Network sister website. Visit the site for more grocery trends and insights.

Natural Products Expo

Natural Products Expo West hotel and vendor update

expo-west-logo.png

Group Show Director for Natural Products Expo Lacey Gautier shares an update about hotel and vendor partners of Natural Products Expo.

“Anaheim has been home to Expo West since its inception 40 years ago, and we have partnered with many of our Anaheim hotels and vendors for many, many years to put on this event for the natural and organic products community. We believe that our longstanding relationships will help us navigate these difficult times and that our hotel and vendor partners will strive to prioritize our customers and your sustained success, even as they navigate their own business losses due to COVID-19.”

Watch the video to learn more.

 

INFRA founder Shindelar reminisces on the natural products industry

Independent Natural Food Retailers Association (INFRA) founder and President/CEO Corinne Shindelar stepped down from her role on March 1

Independent Natural Food Retailers Association (INFRA) founder and President/CEO Corinne Shindelar stepped down from her role—one she held for 15 years—on March 1. We asked her to reflect on the early days of INFRA, the transformation of independent retailing and what’s left to do.

What was the state of independent natural retailing when you started INFRA?

The challenges of retailing 15 years ago were similar to what they are today. Independents were all individually trying to determine how best to navigate the rapidly increasing competition in their space. Supernatural chains owned by venture capital and private equity were multiplying quickly. Private label organic products were showing up at retail where they didn’t before, and basically most independents were without the depth of resources to be able to weather the upcoming wave.

You know, in 2004-2005 Expo East and West, respectively, many in the industry said that INFRA couldn’t be done and that independents would never collaborate. The biggest need that I filled, which I was not aware of at the time, was building a community of like-minded people.

What are some of the biggest changes in independent natural retailing you’ve seen over your time at the helm of INFRA?

Most independent natural and organic food retailers are in the business of selling groceries that matter and make a difference. The biggest transformation and change that I have seen in the members of INFRA is how they approach their missions and visions.

Over the past number of years, I have seen many of the members of INFRA adopt and adapt because of their association with each other and the expertise that is available to them through being a member. Members are better prepared to grow their businesses, operate on tighter margins, have succession planning in place and maintain their relevancy in their communities by working smarter through the collective brain power of the association.

How do you see the role of independents changing going forward?

I have always stated that if independents can keep their heads above water, make good choices and decisions, and meet their customers were they are at, independents will win in the organic and natural food space. Our economic models are set up in such a way that you either need to be really big (think Amazon and Kroger) or you need to be nimble (think independents and co-ops), yet you still must deliver on your promise. That promise for independents is going to look different, depending on the need that they are filling in their communities. The relevance, however, is critical, as the next generations are more interested in supporting companies for their mission relative to climate change, sustainable economics and community health, versus accumulation of goods and wealth.

What's next for you?

I am planning on freelancing in different areas in the supply chain. I plan to continue my advocacy work and serving in cooperation with the Non GMO Project, Climate Collaborative, Organic Voices, Hirshberg [Entrepreneur] Institute and others. I am hoping to continue to build collaborations across retailer communities, specifically cooperatives and independents, as there are very few people out there that have the level of insight to these communities that my 38-plus years of retailing and organizing has provided.

For me, what is next is pretty exciting because I can push buttons and boundaries and not have to worry about conflicts of interest in that process. I want to continue to help build sustainable business models that include compassion, transparency and integrity in a way that having those values and making decisions on those values is considered good sound business practices.

Yep, I am going to continue to have fun in the industry challenging the thinking and fighting the good fight for organic health.

Honest Tea founders launch Eat the Change Impact grants

Seth Goldman and Julie Farkas

Seth Goldman and Julie Farkas have a sterling track record as mission-driven natural products entrepreneurs. After co-founding iconic brand Honest Tea, now under the Coca-Cola umbrella, Goldman became executive chairman of Beyond Meat while Farkas co-founded plant-based eatery PLNT Burger in Bethesda, Maryland. But beyond their business savvy, the married couple holds a deep commitment to advancing social and environmental causes. Their innovate new venture—Eat the Change—combines commerce with education and activism to help consumers make more planet-friendly dietary choices.

“Climate change is real—it’s a fact—and so is our power to act,” Goldman says. “However, people feel anxious about climate change and don’t realize there are steps they can take every day. Our goal is to connect the dots and help them understand that they can take action and show them the choices they have today.”

To accomplish this mission, Eat the Change consists of a for-profit enterprise, a launchpad for plant-based food brands and restaurants (PLNT Burger is the first), as well as a nonprofit arm to support organizations working to inform and inspire consumers to take action.

“When we were founding PLNT Burger, my son came up with the phrase ‘eat the change,’ which struck me as both a powerful call to action and a brand idea,” Goldman says. “It’s always been my firm belief that brand ideas are best when they are causes as well. It’s just that in this case, the cause is coming out ahead of the packaged food. I’m still thinking of brand ideas but realized we could move very quickly on the nonprofit part because we already had the resources in place.”

Today, the Eat the Change Impact grants program officially launched. Over the next three years, Goldman and Farkas have pledged to donate $1 million ($335,000 per year) to dozens of national and community-based nonprofits from funds they’d set aside from the sale of Honest Tea. This year alone, they expect to award eight grants of roughly $20,000 to national organizations dedicated to research and education, along with 15 to 20 grants of $5,000 to $10,000 to local organizations focused on educating and mobilizing consumers.

Grants will be awarded based on applicants’ potential to promote four core values: eating with intention, fact-based science, democratizing planet-friendly diets and innovation. Organizations can submit applications for this year’s grant cycle from April 1 to May 15, and the funds will be awarded by August 1. “We made a special effort to ensure the application isn’t onerous,” Goldman says. “We want information, but this doesn’t need to be a senior thesis. We’re looking for concise and succinct answers and clear statements of mission and need.”

While the term "planet-friendly diet" may have a slightly different connotation to different people, in Eat the Change’s view, it means no meat. “There are certainly more climate-friendly approaches to raising animals for the meat industry, but as we see it, they are lower in focus,” Goldman says. “We would rather focus on higher-impact areas, so we don’t expect to invest in any approaches to animal-based diets.”

Although our world is currently experiencing major disruption at the hand of the COVID-19 pandemic, Goldman believes that supporting those who work toward protecting the earth through food choices remains vital.

“We never anticipated living in the world we are currently in with this pandemic,” he says. “Obviously, this crisis has taken a lot of attention—as it deserves to—but now these organizations are really challenged. These causes still need to be addressed and people still need resources to continue their work, so there is an urgency to get these funds out. We are so excited to get this program up and running, and we look forward to seeing some really cool ideas get the funding they need.”