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    FRONT END: Grocers doing some 'Fancy' footwork

    Either supermarkets are getting fancier, or fancy foods are going more mainstream -- but the two are definitely playing well together, as evidenced by the latest Fancy Food Show.

    Either supermarkets are getting fancier, or fancy foods are going more mainstream -- but the two are definitely playing well together, as evidenced by the latest Fancy Food Show.

    The National Association for the Specialty Food Trade's (NASFT) 52nd Annual Summer Fancy Food Show, held July 9 through July 11 at the Jacob K. Javits Convention Center in New York, was the first to be completely sold out, according to outgoing NASFT president John Roberts, due to "a flood of new domestic and international exhibitors."

    To be sure, the requisite smorgasbord of candies, cookies, cheeses, condiments, juices, oils, sauces, snack foods, teas, and other products was on display at the event, at which most of the exhibitors who spoke with Progressive Grocer noted rising interest in -- and from -- the mainstream supermarket channel.

    It's proving to be a symbiotic phenomenon. Oakland, Calif.-based Numi Tea, for example, has risen to become the No. 1 organic tea sold in supermarkets, according to Anna Wasserman, public relations manager. Safeway is in part responsible for that achievement, as the chain carries Numi in its Organic Marketplace sections.

    New from Numi this year are a line of iced teas in various flavors and an assortment of its popular flowering teas in accessible tea boxes, says Wasserman.

    Conventional retailers eager for a point of differentiation are beginning to flock to specialty products. "Everyone want to compete with Whole Foods," notes Seth Novick, v.p. of The Kitchen Table Bakers, a Syosset, N.Y.-based producer of all-parmesan cheese gourmet wafer crisps, including a new Everything variety. Novick adds that he's seen "definite interest" from such operators. What's more, both Wegmans and Wild Oats are carrying the line in their cheese departments.

    Even such a basic item as water can come in for the specialty treatment, as shown by Icelandic Glacial water, produced in Thorlakshofn, Iceland by Scottsdale, Ariz.-based Icelandic Water Holdings ehf. The water, billed as one of the purest on the market, made its U.S. debut in November 2005 in 150 SuperTarget stores across the country, making it the first superpremium bottled water to be available to consumers via that mass market retailer. Icelandic's v.p. North America, James Tonkin, says that the company is currently backfilling into other Targets, and the product is also available in Trader Joe's and Wild Oats.

    Icelandic Glacial has a new 24-ounce bottle due this month, and it's also planning to roll out such products as ready-to-use ice cubes, with its ultimate goal "to keep products growing in number and our fan base happy," says Tonkin. As a result sales at Icelandic Water Holdings have been rising on a monthly basis "pretty dramatically," he notes.

    Of course, a crucial ingredient in many grocers' specialty food lineups is ethnic cuisine. Celeste De Armas, president of North Miami, Fla.-based Nueva Cocina, which produces a line of easy-to-prepare pan-Hispanic dishes and is hoping to further tap into the "richness" of Latin American foods by introducing Peruvian and Colombian-inspired selections, among others, notes that her company has received "a tremendous amount of interest from mainstream supermarkets with an upscale clientele."

    She attributes this heightened interest to a "more well-traveled" consumer with "a more sophisticated palate." Noting the increasing visibility of such products on conventional retailers' shelves -- Nueva Cocina is already carried in such stalwarts as Publix, Food Lion, and Giant Eagle -- De Armas asserts, "We'll be part of that growth."

    The Fancy Food Show was also the setting for such special events as a tasting seminar intended to clear up misconceptions about some well-known European Union food products, and raise awareness of a few unsung items.

    The seminar, "The Familiar Giants and Undiscovered Gems of the European Union," was sponsored by the European Authentic Tastes (EAT) campaign and hosted by Ari Weinzweig, co-founder of Zingerman's, an Ann Arbor, Mich.-based purveyor of high-end foods.

    Along with helping attendees sort out the differences among the various designations applied to EU products, the seminar afforded tasters the opportunity to sample an array of top-quality products from across the EU.

    While famous items included Parmigiano Reggiano cheese from Italy and blue Stilton and Roquefort cheeses from England and France, respectively, among the obscurer selections were queijo de Azeitao, a cured, runny sheep's-milk cheese from Portugal, and Styrian pumpkin seed oil from Austria, which is often used in its home country to dress salads, pasta, and other dishes, and whose health benefits include an ingredient that assists in prostate health.

    Weinzweig proved a knowledgeable and enthusiastic host, eager to inform attendees of "the story behind the food" and its designations, which he termed an "authentication of uniqueness." Each sample was briefly discussed by a representative from the food's country of origin, or an importer intimately familiar with the item's history.

    An interesting point made during the seminar was that historical food designations shouldn't just be confined to the EU. Dr. Franz Mitterrutzner, the representative who spoke about Speck Alto Adige ham from northern Italy, opined that such American products as Vermont maple syrup should be granted a Protected Geographical Designation of Origin, which denotes foods that must be produced, processed, and prepared in a specific region, using traditional production methods. "It would be an important step to internationalize the whole program," noted Mitterrutzner. "Wonderful products should be protected."

    --Bridget Goldschmidt

    Supervalu tags $1B for cap ex purse

    Supervalu, Inc. is allocating $1 billion in capital expenditures for its retail operations in fiscal 2007, to revamp existing stores and build several new ones amid continuing integration of the stores it acquired from Boise, Idaho-based Albertsons, Inc.

    Although some of the $1 billion purse will be spent on new stores for the acquired banners as well as for some of Eden Prairie, Minn.-based Supervalu's legacy banners, most of the funds will go toward remodeling acquired Albertsons-bannered stores.

    At its annual meeting, in Fargo, N.D., Supervalu said it would deploy its "robust, focused" retail capital budget -- which represents 3 percent of its $34 billion of retail revenues -- to the markets most in need. The nation's third-largest retailer further said that it would leverage strong market positions and excellent retail locations as it focuses on honing the in-store experience.

    Supervalu c.e.o. Jeff Noddle said that his company plans to put a greater emphasis on remodeling than Albertsons traditionally did in the past, particularly in the important Chicago market, where Supervalu plans to open six new Jewel-Osco stores and remodel 18 others. In New England, where Supervalu picked up 210 Shaw's and Star Market stores in the Albertsons deal, it intends to open five new stores and remodel 14 in fiscal 2007.

    Supervalu is planning other improvements to its new and existing banners, including:

    --For Cub Foods, two new stores and 10 remodels in the Twin Cities;

    --For Albertsons stores, six new units and 13 remodels on the West Coast;

    --At Farm Fresh, five new stores and three remodels in North Carolina and Virginia;

    --For Shop 'n Save, four new sites and two remodels in St. Louis;

    --Acme will get two new stores and 11 remodels in Philadelphia;

    --Shoppers Food & Pharmacy is slated for two new stores and seven remodels in Washington, D.C. and Baltimore;

    --For Save-A-Lot, 35 new stores nationally;

    --At Sunflower Market, five new stores, two in Columbus, Ohio and one in Chicago (sites of two additional locations have not yet been announced); and

    --For Bristol Farms, four new stores in Southern California.

    New formats: Fry's does Hispanic; Giant Eagle goes upscale

    The Kroger Co. and Giant Eagle are the latest supermarket chains to unveil new formats to serve their diverse customer bases.

    Kroger-owned Fry's last month opened a new concept store in Phoenix that's designed to serve both the growing Hispanic population in Arizona as well as non-Hispanics who enjoy authentic Mexican and Latin American foods. Called Mercado, the concept will be the new prototype for all new Fry's stores, Cincinnati-based Kroger says.

    "With 115 stores in the Phoenix area, we want to provide special service and quality products to our Hispanic customers," notes Maria Fernandez, manager of the new store. All employees will be bilingual or will speak Spanish.

    The 66,284-square-foot store is designed to offer Mexican shoppers products they grew up with, and provide other shoppers with new foods presented with preparation ideas by a friendly staff. The butcher shop showcases items used in traditional cooking, from marinated and seasoned meats to family packs for those who wish to buy larger quantities for extra savings. The produce department features popular Hispanic items, and the center of the store offers traditional grocery products as well as spices and seasonings required for home-style Mexican cooking. A party center is also available, featuring the assistance of a party consultant.

    Departments have Hispanic names, such as La Fresca Cosecha (The Fresh Harvest) for the produce department and La Pesca del Dia for the seafood counter.

    The new prototype also helps local Hispanic merchants sell their wares. A mini-market lining the west wall of the building, called the Avenida de los Arcos, features seven shops operated by independent merchants. The stores offer men's and women's clothing, shoes, boots, hats, western wear, jewelry, bridal wear, and accessories. The area also includes a barbershop and a music store.

    Mercado will also offer sit-down dining inside and outside the store. Inside is Mi Cocina Favorita (My Favorite Kitchen), a restaurant serving traditional Mexican foods for dining in or carryout. Dos Fuentes (Two Fountains), slated to open after the store's grand opening, will provide an outside dining experience that features charcoal-roasted chicken. In addition, Mercado will have a tortilla factory and bakery with all products baked from scratch on the premises.

    A complete Farmacia de Fry's (pharmacy) is adjacent to the spot reserved for the Clinica, which will open in coming months to offer medical services.

    Across the country, in Pittsburgh, home-based Giant Eagle is reaching a different group of shoppers with its new upscale concept, Market District.

    The new Market District units, located at 7000 Oxford Drive in Pittsburgh's South Hills region and 5550 Centre Avenue in the city's Shadyside neighborhood, are expected to draw customers from Pennsylvania, Ohio, and West Virginia, say company officials.

    The format features a Brazilian-style churrasco at which fresh meats, seafood, and vegetables are spit-roasted over an open flame and carved to order. It also has a charcuterie showcasing domestic and imported cured meats from countries such as Italy and Spain, as well as products like Saucisson pork from the mountains of France.

    Other special offerings include cooking demonstrations; ethnic products from 19 countries, including Thai, Latino, African, and Hispanic foods; an on-site coffee roaster; thousands of organic and natural products; an extensive produce department featuring more than 500 items; a barista and beverage bar; a salsa bar; and dry-aged certified Angus Beef. The stores are staffed by a contingent of highly trained associates.

    Market District is the "perfect choice for those passionate about food," notes Kevin Srigley, Market District s.v.p. The stores simultaneously satisfy the customer's need for a full weekly shopping trip and the desire for a wide array of freshly prepared foods made in store every day, he adds.

    At 117,000 square feet, the Market District in the South Hills area is significantly larger than the typical Giant Eagle; the Shadyside Market District is 68,000 square feet, however. The larger size allows for additional offerings, including a baby section, a toy section, office products and housewares, bulk foods and spices, and a candy rotunda featuring freshly made fudge and chocolate bark.

    Srigley says the format won't be rolled out in every neighborhood the way current Giant Eagle locations are.

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