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Progressive Grocer hosted a roundtable discussion, “Driving Deli and Bakery Sales with Innovative Packaging Solutions,” on June 2 during the 2013 International Dairy-Deli-Bakery Expo in Orlando, Fla.
The panel consisted of (pictured below, from left) Byron Hanson, director of deli/bakery and foodservice for Minnesota-based Lunds/Byerly’s; John Rose, bakery category manager for Texas-based Brookshire Grocery Co.; Misty Abella, bakery specialist for Arizona-based Bashas’; Doug Larson, EVP of sales for Lenexa, Kan.-based Robbie Fantastic Flexibles; Jacquelyn Moskalik, deli/foodservice category manager for Brookshire’s; Jim Dudlicek, editor-in-chief of Progressive Grocer; Heather Turner, director of in-store executive for Kansas City-based Price Chopper Enterprises; and Irv Robinson, Robbie’s co-founder and CEO.
The following is a complete transcript of the discussion; an edited version appeared in PG’s September 2013 print edition.
DUDLICEK: Good morning, everybody. I’m Jim Dudlicek, editor-in-chief of Progressive Grocer, published by Stagnito Media. I’d like to welcome you here this morning and thank you very much for joining us for this roundtable, “Driving Deli & Bakery Sales with Innovative Packaging.” It’s no mystery to anyone sitting at this table that the face of the supermarket deli has changed drastically over the past few years, as the focus has shifted more towards prepared food and serving people’s needs for convenience, freshness and restaurant-quality alternatives that they can buy in the store and take home. As part of that equation, packaging has become more and more important.
Prepared foods have continued to top the charts in importance, in particular, rotisserie chicken programs and daily specials for food that need particular packaging to showcase the food and preserve its freshness and portability. We’re looking forward to getting everybody’s insight on this very important growth area of the supermarket channel. Why don't we go around the table and have everybody introduce themselves and tell us a little bit about your background, and then we’ll get started.
LARSON: I’m Doug Larson, currently the executive vice president at Robbie, responsible for the sales, both domestically as well as internationally.
TURNER: Heather Turner – I’m with Price Chopper out of Kansas City. My title, it’s kind of odd: director of in-store execution. Bakery/deli has been my background. Previously, still working on that side, but also working on more the marketing and advertising side now, facilitating the messaging to the stores and special promotions. Prior to that, I worked at Associated Wholesale Grocers out of Kansas City for seven years in the back bakery/deli. And previous to that, I was with Kroger in the billings division for a very long time, so all in bakery/deli and store management.
ROSE: I’m John Rose, category manager for Brookshire Grocery Co. I started in the business in ’75 at Interstate Brands at the time, and then the last almost 27 years for Brookshire. So I’ve been pretty much a bakery guy from the ground up.
MOSKALIK: Jacquelyn Moskalik. I am the deli/foodservice category manager for Brookshire’s out of Tyler, Texas. I’ve been in deli/bakery for 16 years. I started out in wholesale, crossed over to the dark side in retail at Minyard’s. That was a local chain in Dallas/Fort Worth. And then I went to Meijer from there, then AWG in Fort Worth, and Brookshire’s.
ROBINSON: I’m Irv Robinson. I’m the co-founder and CEO of Robbie. We started with my father 42 years ago and it’s all been in flexible packaging and a series of innovations in that wonderful industry that we’re in. And I’m really looking forward to hearing what everyone views and sees for the future in the deli/bakery areas.
ABELLA: My name is Misty Abella. I’m the bakery merchandiser for Bashas’ in Arizona. I’ve been in bakery for over 26 years. I come from a scratch background. And I got hired from Paul Chapman, his bakery merchandiser, Ashley Zimmet [phonetic]. When he relocated to Spartan, I’ve been doing his job in merchandising.
DUDLICEK: This is going to be sort of a very casual, interactive, free-form discussion. The questions we have here are mainly guidelines. We’ll pretty much let the spirit and momentum guide us where we go. Let’s just kick it off with a general overview: As a deli and bakery manager, what are the most important attributes that you look for in packaging for the deli and bakery in prepared foods and foodservice?
ROSE: A very important thing is visibility of the product – can the customer see what they’re buying? So we’ve tried different things. For example, years ago, I believe it was for the Christmas season, we tried a cookie in a tin. You obviously can’t see that product and it was the biggest bomb we ever had, so we never did that again. But [for] customers, it’s very important. If they can look in there and look at the size, the attributes, as a baker, all of those things. So visibility is huge. And we found that, too, with labeling. We finally began moving our labeling down on that package, so it wasn’t label, label, label. Somewhere in there is a product. So that’s a big deal, I think probably one of the biggest things we look at.
MOSKALIK: In deli, it’s partly labor, too, so you don’t want to bring anything that’s too complex that takes them forever to put together, especially if it’s in a production item like rotisserie chickens.
TURNER: I agree that No. 1 is the presentation on the product. I’ve found some great packaging, but it just doesn’t showcase the product once you utilize it. I’d also say something easy to merchandise, because sometimes they come up with some great packaging, but it just doesn’t merchandise well for stacking. I hate octagon containers and the way that sometimes they sit onto the tables. They just don’t fit right. Also making sure it keeps the product fresh. I love the look of boxes but haven’t had much great luck with box packaging and product quality.
ROSE: How that product seals, too, that’s a big deal.
ABELLA: The packaging being sturdy enough to stack, not only on the tables, but also in the freezer, and also that it locks, that all the locking mechanisms work real well. Sometimes you get packaging and it will do really well for a while and then you’ll get a bunch that don’t click. Also, you’ll get packaging that will click in the front, but in the back, it won’t seal real well and that will cause problems with keeping things fresh.
ROSE: We had a Danish container years ago that was like that. It seemed to lock ...
ABELLA: But not the back?
ROSE: … and in the back you had some gaps. So, you know, pretty soon this stuff’s drying out. We went to a four-corner lock. Everything got better real quick. But it was such a simple thing to fix and, actually, we should have caught it when we first looked at it. You’re just looking at that front so, you know, it’s kind of a big deal.
ABELLA: And, then, if you’re looking for a bakery manager’s point of view, too, it’s the box that it comes in, too. If the box is not sturdy enough, in the process of it getting shipped there, the edges will get bent or damaged. Or coming from the warehouse to the stores, the bottom part will be bent. So if the packaging that it comes in, is not sturdy enough, that also affects the stores. And you get those little losses in there that don’t help anybody’s bills.
DUDLICEK: So you’re getting shrink and you’re not even at the food yet?
ABELLA: And we haven’t even opened the box yet.
DUDLICEK: What do you see as being the most pressing needs of your shoppers? What are you learning from them about products for the deli and bakery? When they pick up that package, what is it that they need to find?
MOSKALIK: In deli, they definitely like products that are microwaveable, oven-safe, things that they can actually store a product in, in the refrigerator, without it going bad.
TURNER: I think they’re liking the tamper-proof packaging.
TURNER: We’ve been doing really well with that.
MOSKALIK: Big time.
ABELLA: And they let us know that the product is sliding around inside. They want it to make it home without damage and they don’t want it to leak on them out of the bag. They don’t want it to leak inside their refrigerator. They want everything to be pretty sturdy inside and fit really well. Otherwise, it will slide around, bang into the sides of the box, and they just want their product to make it to where they’re going safely.
ROSE: And they want resealable, too.
ABELLA: Yes, resealable items.
ROSE: That’s a big deal.
ABELLA: Yeah. We had that little locking mechanism that has the tape to close the bread.
ROSE: Oh, yeah.
ABELLA: We had a lot of complaints on that. They don’t seal. They would rather have the old-fashioned twist ties because then they can repackage what they have.
ROSE: We had a package a while back where they finally changed it to where you could seal it back up. Everything was great at the bakery point of sale. It packaged up well. Everything was great. But there were difficulties getting the darn thing resealed again. So it was almost that you better consume this …
ABELLA: Right away.
ROSE: … all at once or you’re on your own, buddy.
DUDLICEK: It didn’t have a lot of expectation for going in and out frequently. It was, you know, one or two tries.
ROSE: No. It was kind of a one-way, it’s yours, you’re on your own, that sort of thing. But we fixed it where you could go back and reseal it with ease. It wasn’t a cumbersome deal. Otherwise, the customer was stuck having to over-wrap this thing at home or stick it in another bag. And I don’t think their patience level is quite up there. They were like, “Hey, just make it work.” That’s something we ran across with that.
ABELLA: In bakery, we have a lot of icing and everything to deal with, and they don’t like it if the icing touches the top or the sides [of the box]. So the packaging has to be high enough that whether it’s moved around or not in the basket that it doesn’t touch.
DUDLICEK: You don’t want that little stool they put on top of pizzas.
ABELLA: Exactly, with the little table.
DUDLICEK: What are your expectations from a packaging supplier that you’re dealing with, as a deli/bakery manager, at arriving at a solution? You’re coming up with the issues that you have back of house, with the issues that your customers have. What kind of working relationship are you looking for from a packaging supplier?
ROSE: That’s a big deal. In my mind, this buyer has to be very invested in what it is you’re trying to do as a solution focus, rather than, “This is what we’ve got and this is what you need to make work.” But, rather, reverse the process and say, “What are you trying to do?” And then go backwards. We work back.
ROSE: Does that make sense? I think that makes sense. “What are you trying to do?” Rather than, “This is what we’ve got.” Because that’s just changing constantly, what that customer expects and what they’re looking for. The buyer comes in solution-oriented and we’re here to do what you need to do and we’ll work back. We’ll figure out the back-room stuff. We’ll figure how to get that thing to you. Rather than just, “This is what we’re seeing,” and we’ve had those discussions with a couple suppliers. Clamshell versus kraft, a box or what-have-you. That’s something I’ve run across. Maybe you guys have, too.
ABELLA: I look at that, the quality and the cost. I expect to be able to get a decent cost on things but still have the quality.
TURNER: I would love to see more versatile packaging … where we have less packaging in the back room but more uses for what we are carrying. That’s always a problem, having all that packaging in the back room. And I know we have stores that sometimes are running out of something because they have so much packaging back there in inventory, that they’re holding off on other things and sometimes not making the right decision on that. So I think packaging that can have multiple uses and multiple purposes, and be able to present it that way: “Here’s the ideas we have behind this packaging.” I think that’s a big win.
ROSE: We just did a program – it’s kind of a signature cupcake we call a Yums. We had a box and we decided to take a little different approach and really take it to the next level in the marketplace. So we got some people involved, an internal committee, and they looked at that box and said, “We need a whole new design with this box. It’s got to be completely different. So we brought in a packaging supplier, and they did just what I was describing earlier. We said, “This is what we’re trying to come up with. This is how we want it to look and this is how we want it to work,” and so forth. And so multiple prototypes, back and forth, which was kind of – it’s arduous. But then finally they said, “OK, we can’t do everything you want because the darn box will cave in, too much window, so on and so forth, but we can do this.” And so we met at a happy medium. We found something that both could live with. They could build a box that would stand up and it would have integrity to it, and we had what we wanted. And then we went from there to the mind-bending process of back-and-forth checking every detail. The end result was a box that worked so much better than what we had, because it’s one of those kind of boxes that you go like this and, boom, there it is. You put your insert in, put your cupcake in, the lid, done. But what was so cool about that company is they went back and figured out a way to make that, although not exactly what we wanted, but everybody won. And that was a very cool process, to see how everybody worked together on that, and it was a big success. It took forever to do it. I assure you, the people around us said, “This is going on and on and on. Come on. Are we ever going to get off of, you know, square one? Please, please, do something.” But it worked. But it was really a collaboration in the truest sense of the word. We both found something that would work for both of us. And now we’ve asked that company to look at some other things we’re doing. And it will be mind-bending. It will go on and on and on, but it was worth it.
MOSKALIK: I think innovation is key, too. So, as a retailer, if we have a sandwich program or something like that, you want packaging that sets your program apart from your competitor, because I think people buy with their eyes. So it’s kind of cool if you have a new program and it’s totally different; it appears fully different in the case. It showcases your product. And customization, if you have the volume, that they’re willing to print on the bag or something like that, to tell the story better.
DUDLICEK: I think in this particular arena to set yourself apart from a competitor, because the prepared foods area is in such of a growth mode now, you have to say, “Come to us because we have this and you can’t get it anywhere else.”
MOSKALIK: Right. That’s kind of neat.
ABELLA: We like to have our name on there, too, and then we created some stickers that go on packaging that says “hometown,” you know – “Hometown Grown.” Everything is local. That’s a big thing. People put that on the table and there’s our advertisement.
DUDLICEK: Especially in those areas like the bakery and the deli where I know Bashas’, in particular, and a lot of other grocers are going out of their way to prepare these unique offerings, bringing in executive chefs to develop these recipes. You want to be able to showcase them to their maximum potential. And that’s where the relationship with the packaging supplier could definitely come in handy even, if it’s that long, arduous process.
ROSE: What was fun was we got into part of it – and this was where the supplier really helped us see what we needed –and we wanted to put logos on each side. And, thankfully, he said, “Well, you’re not going to like this because you’re going to have a logo that is disjointed.” I said, “Well, then, how do we fix that?” He said, “You need a box that actually kind of comes together from the bottom, not the sides. Then your logos won’t be all messed up.” So then they came up with another way to do that, but this is where he was saying, “We get what you want, but you’re not going to be happy. Wake up.” So it was very cool – the design they came up solved everybody’s problem, and it helped us to see a problem that we didn’t even see coming, in particular me, because I’m thinking, logo, logo. We’re good. Uh-uh. We weren’t good. So that’s where the collaboration was so cool, where everybody’s working together. He’s telling me what we’re going to really need, in a sense, because he could see this thing at the end going – it was very helpful. The guy knew his stuff.
DUDLICEK: How do you prepare your associates to handle shoppers’ needs in the deli and bakery? Those front-line people who are dealing with the public and taking their recommendations – their complaints, in some cases. How do you prepare them to deal with questions they might have about packaging or anything else so you can get these problems solved down the line?
MOSKALIK: Well, in our deli, we arm them with that. So if a customer asked them why we changed something, they know how to explain it to the customer. So you don’t just get, “I don’t know – corporate did it.”
TURNER: Heard that one.
LARSON: That actually happens?
MOSKALIK: Oh, yeah. So, you know, any time we make any changes in deli, we overcommunicate those changes: why, the benefits, things like that. But it’s constant training and communicating on our side. Very repetitive, but it helps.
ROSE: That’s important, just providing it. As Jac said, just providing front-loading, if you will. This is what we’re doing. This is why we’re doing it. Here’s the latest and greatest. Maybe it’s a package that is, if you will, a fad in nature. It’s the latest thing out there. Or perhaps there’s some other things that are attributes to it. Say, “This is really what we need to be doing.” I know a few years ago we switched – we have a 10-count gourmet cookie program and it was just in a nice package. We found one that kind of shingled it automatically and it just helped present better. So we switched over to that package because it was a little better, a little more protective of the cookies, but it was so cool the way it automatically shingled them. You put them in. Boom, there it is. So everybody liked it. It was just so much easier to, you might say, go to market or go to the table with this really nice appearance that happened sort of automatically. And just letting them know what we’re doing, it was pretty well-received. So, like Jac said, if you can kind of get out in front of the story, I think, as the saying goes, frame the issue and get it out there and go for it.
MOSKALIK: That, and if you pilot packaging, too, and it performs well, they tend to listen to their peers. So that helps a lot, too, in the stores. I test everything, because I find that they’ll listen to each other more so than me.
ABELLA: I’ll test it in a store for a couple weeks, a month, and then I’ll bring in, say, six other bakery managers and we all stand around and talk and everybody comes in and it’s amazing how fast that gets out there.
MOSKALIK: Oh, yeah.
ABELLA: And then everybody becomes a lot more supportive.
DUDLICEK: How have the packaging choices that you’ve made impacted the repeat sales of products in the deli and bakery? Is it something that really can make or break a product?
ABELLA: I think so.
MOSKALIK: Absolutely. Especially, if it’s customer-centered. We launched a pizza program that we make in-store. And we thought we would save the customer a step so we make them in these foil pans, and all you do is stick it in your oven. That was the first program we actually got positive feedback from customers on, how easy it was. They just take the lid off and stick it in there. You don’t have to make pizza pans dirty or anything. Just stuff like that. Just little things.
TURNER: The presentation, too. Some of the new packaging has better presentation to it. If it’s a cookie tray and it’s something that the consumer feels comfortable taking to a party and just being able to put right out on the table, I think is very important as well.
MOSKALIK: And green packaging, that’s huge, too. So have something that states that it’s green packaging, it’s recyclable.
TURNER: They’ll pay more for it, too.
MOSKALIK: They’ll pay more for it. They feel better about buying it. It’s a good thing.
DUDLICEK: Let’s talk a little bit more about that. How has sustainability impacted the way that you’re presenting your products in the deli and bakery? I know that’s huge across the board right now.
ROSE: One time, we were looking at our clamshell line, which is, obviously, the bulk of our packaging. And we were talking to a supplier about one that was made from cornstarch. The issue we ran into internally was that, in Texas, that warehouse exceeds 110, 120 degrees in the summer. And the packaging guys said, “That’s going to melt. You won’t even get it out of the warehouse. You’re going to have just a big glob in that box.” So we haven’t solved that yet, because we really wanted to move all our clamshells to the cornstarch-based product. I think it works fine if you’re in Minnesota or something.
DUDLICEK: Because the PLA has a certain shelf life and they expect the product to be used before it starts breaking down. But I expect that that kind of high heat might accelerate its lifespan and cause it to break down prematurely.
ROSE: We were kind of disappointed, actually. We really wanted to move towards that. Corporately, that’s been sort of the direction. We’re trying to find sustainability in a lot of things we do. But we kind of ran into gridlock there. Then we looked at kraft-type boxes, which are very cool, but the sealing part of it is the toughy, keeping that product fresh. We even looked at cornstarch windows in some of our boxes that had windows, but [we had] the same [heat] issue. So we haven’t solved that. We’re hoping somebody comes up with something to solve that. And it’s a little cloudy, too.
DUDLICEK: Irv, I smell a challenge here.
ROBINSON: Absolutely a challenge. But it will get solved.
ROSE: Some genius will figure it out, but the last we heard, it wasn’t. I noticed, too, personally anyway, it seemed like when the economy was rocking along well – I almost relate it to Maslow’s hierarchy of needs. But it seemed like there was a lot of focus out there and a lot of talk in the industry about that. And then, when it tanked, I don’t know if that went off the radar, but it didn’t seem as important. It kind of went down. Price became bigger and how the heck it gets packaged is something else. It seems like there’s some swings there that are somewhat related to how the economy is rocking along. Because people, as you say, they’ll pay more. But that’s just a personal view. I don’t know if there’s really any stock in that.
DUDLICEK: Well, elasticity definitely varies by the product it is and if it’s something people just have to have, they’re going to shell out. But if it’s something that’s like, I don’t care what kind of box it comes in –
ROSE: Yeah, just give me the product. The Whole Foods customer, that’s probably more – I’m just guessing – pre-eminent for them.
ROSE: But it seemed like we saw less and less of that discussion playing out in trade pubs as the economy was struggling. And maybe that will change as it starts turning the corner.
DUDLICEK: But, like you say, I think it depends a lot on the challenge. People are already shopping in places like Whole Foods and they’re already predisposed to spend on that, and other factors are not going to be as much of an impact on that.
ROSE: So whether they’re getting their organic foods, it doesn’t matter. That’s what they’re going to do. Versus the one that’s maybe heading back over there when things are doing a little better. But, again, I say it’s an observation. Packaging people know more about that than me.
(Byron Hanson entered the room and was seated.)
DUDLICEK: Byron, welcome. Based on what I know about what you’ve been doing at Lunds, you came in at a good spot in the discussion. We shifted our discussion into sustainability in regards to packaging in deli and bakery and how important that is to your shoppers. So if you want to get your feet wet right on that, please jump right in, unless you want to get a feel for the water first.
HANSON: Let’s get a feel for the water.
DUDLICEK: OK. Misty, I know that natural and organic and local are huge things for Bashas’. How has that carried over into packaging?
ABELLA: Right now, it hasn’t gone over so much into our packaging in the bakery. We’re doing a lot of that in produce and everything, and it’s going into the deli. And I think we’re going to be one of the last to get over there. But [to Rose], the same things that you’re working with. We have Arizona heat – 110, 115 degrees. There’s a lot of discussions back and forth, looking over packaging all the time.
ROSE: Where’s your warehouse? Out in Phoenix?
ABELLA: In Chandler.
ROSE: So super-super hot in July, August?
ABELLA: Oh, yeah. Triple digits. It gets pretty warm.
DUDLICEK: How green are things in Kansas City regarding packaging?
TURNER: You’re seeing more of that in Whole Foods or the Hen House Market right now. We do have a little bit of the green packaging more in the deli, not so much in the bakery yet. But it’s something we’ve been kind of looking at. Not sure we’re quite ready for the move on that yet. I think we have some stores that it would go over really well in, but then, obviously, there’s some stores we have that the consumer would not pay extra and recognize or appreciate the green packaging, so...
DUDLICEK: So it kind of depends on where the store is in the neighborhood, what its demographic is.
TURNER: Yeah, I think so.
DUDLICEK: That’s really common, as well, among other grocers. Byron?
HANSON: I think we’re known for being an upscale provider pretty much and our consumers are educated, so they do demand eco-friendly packaging more and more. We’re getting a lot more. I actually had a customer mail me all of their containers for a month that they had put in a box, saying, “What do I do with this?” So it’s interesting. I got a box like this (indicating size) ...
DUDLICEK: What was the box made out of?
HANSON: Cardboard, so she did follow that. We have different stores. We try to run them all the same, our 22 stores, but some are much more in what I call a younger, urban, hip [area] – that will take some of the inconvenience of some of the packaging. I think the biggest challenge is getting eco-friendly packaging that will perform in deli-type foods and hold the oils and the gravies and sauces in without leaking. So we do the BioPak in some stores. We do that one. We do the paper bag for rotisserie chickens in about half of our stores. We’ve had some issues with temping of the grab-and-go cases too close to the front door with the Minnesota winter. So we’ve actually had to switch back to plastic that will keep the temp.
DUDLICEK: You’re looking at the opposite problem with Arizona and Texas.
HANSON: Yes, we have the opposite problem. So we switched to all compostable packaging on the salad bars, which the consumers demanded. We switched to all compostable flatwear. It’s made of potato starch. So all of our flatwear in our cafes are compostable. So, yes, they’re getting much more demanding for the eco. And bakery is the challenge. So much of that product is in clear plastic. They have to see it to buy it, so how do you make that eco? Central Markets has done a good job; they do the cardboard with the cellophane window so you don’t have this whole container of plastic clearness – that sea of tubs, I call it. But, the challenge is, how do you find a container that isn’t going to leak in the car, or the sauce, because our customers demand that we clean the car then, or their coats, or whatever it happens to leak on. How do you balance that?
DUDLICEK: Or in the case of the [Lunds] Hennepin Avenue store [in downtown Minneapolis], their bicycle.
HANSON: Yes. That was a surprise for us. That parking lot really is all foot traffic. But, yes, they’re demanding it and I think that they have to step up on some of this compostability. And, the really sharp ones that find out that there’s only two places in the entire city that will accept the compostable into the compost. And so when you get into it, sometimes that consumer is not willing to trade. They want it that way, but they’re not willing to drive it to actually live it. So that still is the issue for us.
DUDLICEK: So, then, as a retailer, do you find yourself under pressure to get in on that end of the game and provide those services?
HANSON: Yes, absolutely. Our stores all have recycle booths now. That was almost five years ago. [to others] Are your guests demanding it?
TURNER: More in our Hen House Market than in the Price Chopper stores. So we’re seeing more changes on the packaging on that side.
DUDLICEK: What is the message that you, as a retailer, want to convey or impart to your deli and bakery shoppers? And how does packaging help you get that message out about the food, whether it’s fresh, its uniqueness or whatever it happens to be?
ROSE: Freshness is king. It’s got to tell our story, what we call “Focus on Fresh.” And it’s got to say, “Something was done with this here.” Cooked here, baked here, decorated here, whatever it might be. It wasn’t just something we pulled out of a case pack somewhere and slapped a price sticker on it. And lots of clarity so they can see that package. Then, the thing that really tells it is the labeling in that they see an in-house label on it. And they can easily pick up on the difference between the two, between that and the manufacturer’s label with all the stuff on it. And that really makes a difference. And we put a little sticker on there that says “Fresh Baked,” and it has our little logo. And that’s a big deal, because they know they’re getting something from their bakery. And that’s been our big focus: fresh, fresh, fresh, fresh, fresh. And it’s really worked. Customers have rewarded us with repeat sales. They know what they’re getting. It’s not complicated. And it’s working.
DUDLICEK: Has there been a difference in the strategy between the regular Brookshire stores and the new Fresh by Brookshire’s banner?
ROSE: A little bit, in that Fresh by Brookshire’s, our fresh store prototype, has kind of gone back to hard-core scratch. It’s a scratch bakery. They’re making everything, just amazing stuff. A little different than, say, our traditional Brookshire’s stores, which rely more on RTO products. But we still wanted all of our stores to scream, “We make it fresh!” I think people at the Fresh by Brookshire’s store kind of get that that’s a very intense scratch operation just by looking at all the equipment and all those people running around back there doing some cool stuff. But it’s just the one store and we’re in a three-state area, so a lot of our customers may be aware of it, but have not visited it just because it’s a distance away. So a little different model, and I think customers pick up on that.
TURNER: I just think simplicity in it, too. You know, some of that new packaging and on the bags, to me, have a little bit too much design going on. I’d prefer just a clean, simple look. It needs to convey the freshness and quality or in-house, but not so much of all the pretty graphics. I think it’s distracting and it kind of takes away from the product.
ABELLA: We want the product inside to show that we specialize and we do quite a bit of scratch, so we want to specialize and know that people can look inside the package and see what we bake. If there’s too much distraction, too many labels and everything over it, they get the impression that we shipped it in. So it’s really important that they get that impression that we are different than what they can get on the shelf … that they know that it’s made there and hand-baked in some way.
ROBINSON: How important is seasonal packaging in the bakery or deli and what role does that play, or should it not play?
ABELLA: Our product shows the season itself, the colors, you know, the types of items that are out there. So the packaging, it doesn’t really change with us that much. It’s just the product inside of it.
ROSE: We’re the same way, whether it’s holiday cupcakes, round cakes, holiday cookies, whatever it might be. They just look at the package and get it. There’s a change in color and design on the particular cake or cookie; the package is still the same package.
MOSKALIK: I think it’s important to brand your packaging where you can, especially if it’s going to be for an advertisement like party trays or special-order cakes, where you’re going to an event and people try the product. They say, “Oh, where did you get this?” And you have a signature box or a tray. “Oh, I got it from Brookshire’s.” That’s important in deli. We like to put our name on stuff we’re proud of.
ROSE: We’re redesigning our cake boxes. It’s going to be another long-term project. But, again, although not holiday related, it will still say – you bring that cake to a party and everyone likes it. Where did you get it? We want it to be quite obvious. Here’s the box. It’s fresh baked. It’s Brookshire’s or it’s Super 1.
DUDLICEK: Super 1 is your warehouse discount format?
ROSE: Yes. And we’ve been using a box that is just a bakery box. It’s identified – we call it Tasty Bakery – but it doesn’t really differentiate between which brand. So in a city where we have both banners, it’s not clear where it came from. So we’re working on to shift that to where they know they got it at the Super 1 or they got it at the Brookshire’s. But we definitely want them to say, “Boy, we know where that cake came from,” or those special-order cookies, or whatever that box contains. That’s a big deal.
ABELLA: We have boxes that have our name on it. We have the small “Hometown Grown” label on there that says Bashas’, but we have larger ones, too. And every single order that goes out, our employees are instructed to place that on top of the item. So if it’s going to a party, it’s a special order or anything, it has that name right on there in nice big letters.
HANSON: We tend to be a banner brand because of our niche in the marketplace. If they sell it in Byerly’s, usually, they just sell it and they’ll often take that as a selling point. So, yes, we want to have that logo on there so that they know it came from Lunds and Byerly’s. It makes a big difference to people. In party planning, it’s a point of differentiation. So most of our things are logoed. Our deli scales – all the labels that come out of the scale machine are logoed with our deli or our bakery, Lunds and Byerly’s, and even a lot of our packaging in the stores, as well as specialty printed itself. It’s very much a traveling billboard for us.
LARSON: Would it be fair to say that freshness is certainly paramount in everyone’s mind? I mean, you’re projecting that image? Has that, in turn, created different expectations of your packaging suppliers? Have you changed your thinking or your demands around their packaging, their supply view of package – in other words, the specifications or the shelf-life capability, anything at all? Or are you strictly just buying the same thing you bought before and you’re, in fact, putting a fresh push on just your product?
ROSE: We just did some packaging changes, with this emphasis of moving the label from, say, the top of the package down to the sides and just enough to where it identifies the product and then goes underneath it. Some of the packaging we were getting was sort of fluted and our stickers weren’t staying put.
TURNER: They won’t stay.
ROSE: Yeah. And they’re flipping off there. So you’re standing by the table and you’re putting it back on. So it was a simple thing to get with the supplier and say, “Can we just have these flat all the way around instead of these little flutes? And here’s why: It’s not anything you did. It’s what we did. We changed – we moved our label.” And they looked at that and the guy says, “Oh, I see what you’re doing. You guys used to just stick it right on the top in the middle and covered up the product. So now you want it down here? Yeah.” So they did it. It was very simple for them. They just started producing lids that were flat around the edge. It stuck right on there. Boom. Done. So it’s kept with our focus on fresh and, yet, still gave us the functionality of a label that stays put, because we sure didn’t want it flipping around and all this. And it was very important to do that. In years past, I’d just slap it on there. Somewhere is fine. No big deal. So that was a big change in the model. So that kind of adjustment immediately comes to mind, because, of course, the buyer’s thinking, “Oh, my gosh. What’s wrong with my package? It worked for the last years.” It did, but we changed. So that’s one example where the packaging guys had to come in and really help us with that, and it worked out great.
MOSKALIK: In deli, we spent the last two-and-a-half years reimaging the deli, reinventing the entire department, just making it more modern, and we redid probably 75 percent of our packaging to go with the direction we were taking deli. So we wanted the product to be the showcase and less branded – if anything, with our brand only. So we definitely had dated packaging, for sure.
LARSON: They did need some new ideas.
MOSKALIK: Definitely needed new ideas. And any new program we roll out, we bring a specific package for it, so that separates us from our competition and just stuff like that. And then we actually brought in different packaging for multiple uses. Because when I started at Brookshire’s, we had something like 500 packaging SKUs. Also, it’s a lot easier to control costs when you have fewer packaging SKUs.
LARSON: So when you suggest that you’re bringing multiple-use packages, that you had mentioned it before as well, does that still mean you’re looking for branded packaging? Or you’re willing to look more at a plain, generic concept?
MOSKALIK: For me, it depends on the program. So, say, for rotisserie chickens, I would want that branded. My pizza program, I want you to see the pizza. I don’t want a bunch of stickers on it, other than heating instructions. It just depends on the program.
LARSON: Got it.
MOSKALIK: Our new sandwich program, which we are rolling out right now, it is branded, but you still see the whole sandwich.
LARSON: So when you say “multiple use,” within that, you’re referring to different – maybe a salami sandwich, or –
MOSKALIK: Yeah. And they use that sandwich bag –
LARSON: -- for a chicken sandwich or something.
MOSKALIK: -- for other things as well. Like for our prepared foods. We just sourced new entree packaging, and we try to put a lot of different things in that package to drive volume to reduce the cost of goods.
LARSON: Do you create that multiple use in your mind when you’re sourcing?
MOSKALIK: Yes. Even when you develop programs, you think, “Is there an existing packaging SKU that we can use.”
LARSON: Do you expect or would you appreciate or even allow access to a supplier that would come in and do maybe an audit, if you will, of store packaging that would allow you to gain knowledge about that?
LARSON: In other words, be able to look and be your eyes and ears. Does that work? Or do you want to manage that yourself?
MOSKALIK: I think at the end of the day, you still manage it. I’m definitely open to suggestions from packaging suppliers. I am far from an expert in packaging. In fact, recently, I had my first vendor; we go through a distributor for packaging. But he came and called on me direct. They had all these items that I had never seen at IDDBA or anything. And it was crazy that they had all these options. As a retailer, you don’t know that if you go through a distributor all the time.
LARSON: Yeah. Sometimes you see what they want you to see.
MOSKALIK: What they want you to see, which I get. You know, they can’t warehouse everything. But we ended up finding our sandwich packaging from them and it’s totally different than anything I’ve ever seen.
MOSKALIK: So let’s hope it goes well.
LARSON: [to Hanson] Would that be similar at your chain?
HANSON: We have a supplier that will work with us and actually create packaging for us if we have the need. So when we went into the grab-and-go, take-and-bake pizza, we had not been in that previous to about four years ago and we wanted to do something different than just the cardboard that’s over-wrapped. So we were using this eco bamboo packaging and it came in a round. But what they found was it would not – the crust wouldn’t crisp up.
TURNER: I’m so glad you said that. We did the same packaging, had the same problem.
HANSON: So they recreated that for us. We said, the crust is not working. We want the consumer just to put the pan in the oven. And so they put the little bubble dents on the bottom, and that crisps it up now. So now you just take that package and put it in the oven. So he designed the package for us and then we’re OK with them sending it out to other places because, with 22 stores, we know they can’t just manufacture it for us. The other thing is sizes. You know, we want to do something with a little divider in it and everything you look at is either three compartments, or it’s so standardized that you can’t custom do it or make it like it’s uniquely yours. So, again, having them work with you to design something is – the big wish, I’m sure, is you wish you could get all your packaging from one company, don’t you? Because you find out that you’re in this line and, all of a sudden, you’ve got this new thing that comes along, because delis aren’t static and neither are bakeries. And your packaging man usually gets angry with you for switching again. But there’s usually this one thing that you can’t find except for that one company. And you just so wish that there was one company that could fit all your needs and if they would just either focus on deli and be a deli or a bakery provider. I think there’s always that one thing you can’t find.
ROSE: It’s the one-off.
HANSON: It’s the one-off. And packaging, the challenge of it is you get into the stores, you don’t have the room any more to store cases and cases of packaging. And, unfortunately, packaging comes in huge packages. You want one box … and you’re dealing with urban stores that don’t have a lot of storage room. And we’ve done a lot of lean work where we actually measure out before we build now, how many of this and what is the exact product you’re buying. And you go and change it and you’ve messed up the store design. So, yeah, having a supplier that would work with you on your needs – and we can’t be offering that many different kinds of foods or that many different styles. It just seems it would be nice not to have the three or four oddball things that you have to get.
LARSON: And it would seem valuable to become almost a partner –
HANSON: A partner.
LARSON: -- to understand the demands, expectations, where you’re going, and then being consistently able to deliver something.
HANSON: Actually, I think the refrigerated cases have gotten to that point. They come in. They work with you. You design the cases. All the stores are probably the same. And they’ll put the bend in or the strange angle that you want at this point to draw a point of interest and they design the cases for you, Hussmann and Barker. And if packaging could work with us as partners that way, I think that that would be phenomenal.
MOSKALIK: Nothing is more frustrating when a supplier comes in your office and they clearly have not been to your stores and they’re trying to sell you something you can’t use.
HANSON: Right. Thank you. Yes.
LARSON: I just had that happen to me.
HANSON: You flew here and you’re going to go to my store and you’re showing me this why?
LARSON: Or worse yet, in your case, not living in Minnesota and understanding, when the door is open, there’s the cold air that rushes the hot case.
HANSON: It’s darn cold, yes.
DUDLICEK: I think that’s just another layer to the whole idea that there are so many different players competing for the same grocery dollar than there was a couple generations ago. The grocery store is not just a big box where mom and grandma buy what they need because they know all the recipes. You have to be an educator, a facilitator, a solutions provider. And every individual grocer has to have that kind of bond with their supplier to say, OK, how can we make what we’re offering unique and special to these people, and convey a sense of, “Yes, you can do it and here’s why we can help you.”
HANSON: Something as simple as taking – you’ll probably think this is really silly, but taking a square and oblong container and putting in some kind of invisible crease in it where you could turn it into a pizza slice, instead of having to now buy a whole pizza slice box, where your slice of pizza will fit in. If it was multi-use, to be inventive like that, where you can actually transform it.
DUDLICEK: I hate to use the government as an example, but it’s like those envelopes that you get – that I get, at least, from the state of Illinois to mail back a payments. You fold it this way and that way, and it becomes a whole new envelope now. It’s like the old commercial, taking the pizza box and turning it into origami.
What are the most pressing challenges that you all are facing in delivering on shoppers’ needs and their expectations from your service deli and bakery? And I guess peripheral to that, how can packaging help you solve those issues?
ROSE: In my mind, if you’re going to market with a particular product line or whatever you’re doing, it does go back to somewhat our discussion earlier, where the customer wants to come in and they don’t have to do a lot of research to find what you’re trying to do. So when they look at that package, be it cookies or scones or whatever it is, they have the assurance that it’s integral. The product is going to hold up there. It’s going to keep the shelf life. It’s going to keep the freshness in that package. They can see what they’re getting. They make the decision and they move on, rather than complicating things with, “What am I doing? What is this? What do I have to learn now? So can’t I just buy this product and go home and it will work?” I think, if anything, it’s got to work when they get it home. It’s got to work later after they’ve got it home, rather than just something that worked for us. I think Misty mentioned earlier the little bag. I think it was something like that. But you went to twist ties. It’s just got to work and it’s got to be fresh. It’s got to stay intact. So we made changes with that over the years, too, where we saw something that worked for us, in a certain sense. But, then again, it didn’t work for us, because the customer went home. Gosh, it’s all dried out. It didn’t keep it fresh. And we wonder why it doesn’t sell anymore. So it didn’t work for us in a sense. And that’s a big deal. Going back to the example of the little fluted, very simple thing, just the flutes around a package. That’s where we asked the supplier to come in and said, “Would you go out into our stores, because we really don’t remember what all we have out there, and look for that problem with every package you’ve got, identify those for us, and bring those back in and let’s see if we can come up with a comparable solution?” And so the guy did. He went and he found, I think it was, about six, eight different packages we had out there that potentially we would have that problem with. And he didn’t just come back and say, “Well, here’s your problem. Have a great day.” He came back and he says, “Well, here’s what we’ve got. It’s basically the same thing, but it’s flat, instead of fluted. This will solve it.” In fact, he went a step farther and said, “We also have some that’s actually made a little bit better. It’s a little stronger package than what you’ve got. And would you like, since you’re making a change, would you like to kind of go all in and improve not just the package but the way the label applies?” And that was very helpful. Because he did all the footwork on that. He was very nice. And he obviously knows his packaging better than I do. And he came in with solutions. It was a very short order, step by step from there. And those problems just went away. Of course, it takes leg time in your stores for all that to happen, but it was helpful to have him doing that type of homework for us. But he knew what we wanted to do and then came back with solutions. So that really helped. It was very important to us.
TURNER: I think integrity of the packaging is important as far as, you know, if we’re going to sell a $20 cake – I know at one point, we go through a distributor as well. And every now and then, they can make some packaging changes due to not having supply on our current product and going to a store, and an 8-inch double-layer cake that you’re charging $18 for and, all of a sudden, I’m not sure what happened. There’s a lot less plastic and then you go to grab it and it crunches in on the sides. And I think it’s important for the customer that when they get home with that $20 cake that they can take it out of that package and still have it look the same as when we first put it in there. They’ll put it on a cake plate and serve it and be proud of it. And they’ll say they got it from your store. The same with the cake box, you know, making sure that they’re able to take it apart easily, set it out and present it, without any problem If they’re going to pay a premium price for some of that product, I think they deserve premium packaging for that product.
TURNER: And sometimes I know we’ve made some changes on that because we didn’t have a lot of that going on. It was more about what’s the cheapest packaging we can put this in. So we’re kind of trying to divert from that some.
MOSKALIK: Our biggest challenge is consistency. So when you walk up to a deli case, two years ago, it was mismatched packaging. You’d go from one store to the next and they all used whatever they wanted in packaging. I don’t know if you guys have that issue.
TURNER: Oh, yeah.
MOSKALIK: So I would find sandwiches in turnover containers and just random things. So I imagine the consumer would get frustrated, too. You get used to buying something one way; if you change stores or go to that store tomorrow, packaging for a consistency standpoint is challenging. It’s gotten better because we reduced the SKUs so they no longer can pick and choose whatever they want, but...
DUDLICEK: I think it sort of weakens the customers’ image of your brand in their mind, because they think, well, you don’t care.
MOSKALIK: Absolutely. It is really hard to brand a program when they decide to change the packaging in the store, so we’ve had to crack down on that a lot in the last two years.
LARSON: Does that go all the way out to the store level then? In other words, when you’re creating this information for the store, for the employees … do you then discuss the packaging as part of that?
MOSKALIK: Yeah. We do pictures with all communication now. So, in deli, we have all these how-to sheets and it’s in big, bold print: This is the only approved packaging that this item goes in. This is a picture. This is a picture of the packaging with the product. Everything’s about the packaging, because that was one of our biggest challenges when I started there.
LARSON: You go all the way, then, to make sure that that brand is safe, if you will, all the way through.
MOSKALIK: Very protective.
LARSON: When you launch a new item like that and you work that hard to put all that information together and it starts selling and it’s moving to the consumer level, do you have a vehicle to understand, if the product is not successful, whether or not that product is the issue or is it the package? Do you go that far to understanding that?
MOSKALIK: Oh, yeah. I think we’re one of the only retailers on the SAP in the United States --
ROSE: As far as I know.
MOSKALIK: -- so we have access to data that just blows my mind. I can usually tell within one to two weeks if a program is going to fail or not. And if it’s struggling – because we pilot everything. I don’t just launch things. I learned that the hard way. You talk to the store guys or our ops team and ask them, you know, what about the program is difficult. And they’ll give you feedback. So if it’s packaging, that’s –
LARSON: You could find out that?
MOSKALIK: -- somewhat easy, but if it’s the program, then you have a bigger problem.
LARSON: That all covers your in-store. Do you work on a consumer level to understand that as well, or do you just trust the in-store instincts?
MOSKALIK: I trust the numbers. So if I have high shrink or the units aren’t what I thought they would be to warrant the space that the program is taking up, I trust the number part of it. And if it is struggling, the people in the stores are going to know why quicker than I would, unless it’s a product problem. Then we would catch that quicker.
LARSON: Sure. Would that be similar, for the rest of you, that you have kind of a routine that you go through, a process you go through, that allows you to identify success and failure of new launches and what that may look like with respect to packaging?
ABELLA: Yeah, we do. I think, with us, one of our most pressing challenges is the change of seasons, with the extreme heat, and we have snowbirds and they leave. Snowbirds want smaller packages. So we have to have packaging for different demographics. They want half pies. They want sugar-free. You know, they want different items. And we get such a mix of different demographics from one store to 10 miles away, one of our affluent stores. If we’ve got our senior stores, they want smaller packaging and everything. So we have to get into all this single-serve packaging for them, and they’re real specific about what they want. And a lot of times that comes in great big boxes, and that can cause difficulties there with purchase to sales, things like that, for inexperienced bakery managers. And then we go to our reservation stores and family stores and value stores, and it’s more bulk items. It will be the same product, but we have to have different packaging for the same product. So, in a value store, I may have them merchandise completely different from a store 40 minutes away that’s a total senior store, so there’s a lot of flexing of packaging of just one thing. And one store, they might not sell double layers at all. But if it’s a senior store, they’ll sell single layers or they want only single-serve cakes. So we have to adjust the same product in all different packaging, depending on where we’re at. Because the temperature change is so different from Flagstaff and the reservation stores, down to Scottsdale. So that’s our biggest pressing problem that I see when it comes to packaging. And then trying to educate your bakery managers to give the customer what they need but still make sure you’re controlling costs. So those are our pressing problems, our challenges.
DUDLICEK: And your audience is going to vary widely, whether it’s AJ's or Food City or a regular Bashas’ banner. You get a lot of variation.
ABELLA: Yeah. Because you’ve got your AJ’s that are more affluent. But our affluent stores, they ask for more specialized items, more specialized cake orders. They want more scratch. So you can have the same product, just all put in different packaging, depending upon where they’re at. And that’s the only way to get the sales in the area, but you have to adjust to what they want. So our thing is to please the customer. But I really try to educate. We group them together into clusters and we’ve done a lot of setting, especially the bakeries. Since right after Christmas, we’ve reset almost every single bakery and went in and we grouped them in clusters and everything. And we actually taped the tables and everything and went over exactly what kind of packaging they were going to use. You are a family store. You’re a value store. You’re going to do 15-count mini croissants. This is the packaging that you’re going to use. Then I go to an affluent store and we set their bakery. They’re going to have single-serve croissants inside their case and they’re going to want waxed bags that keep the moisture and lock freshness in. So those are the challenges that I’m faced with when it comes to packaging.
HANSON: E-mail has helped the customer be very connected to the stores. Sometimes the anonymous public, they feel much more free to be very honest with an e-mail so that they don’t actually talk to someone. But they let you know right away what they don’t like and what they do like. And we also have a survey company called Voice of the Customer, and we measure quality and service and value and all of that. So it gives you a pretty clear picture of what you’re dealing with. But I think sometimes we underestimate the cost factor versus the workability of the package. I think the customer will pay for a package that’s going to be functional and meet their needs, instead of getting the cake and it squishes. The package really does say a lot about what you’re selling. I did a stint in department stores so you know the value of the brand, whether it’s Marshall Field or – every city had their great department store – and you got the box at Christmas and you opened it up and you went, “Oh, Dayton’s,” you know. And it didn’t matter what was in there. You knew it came from Dayton’s, so the brand meant a lot. We’ve actually heard stories where people come and get our bags and put their recycling at the curb and just do that so that they have their neighbors think that they shop with us. I don’t know if it’s true, but that’s an urban legend out there.
DUDLICEK: Lunds has the best garbage in the city.
HANSON: So that brand, I think, is very important. And I think it says a lot about the product you’re selling. Because if it’s cheap, they’re going to know it, and they won’t put up with it.
DUDLICEK: Irv, I know that Robbie has done quite a lot of research into a lot of the things that we’ve been talking about this morning. Please talk a little bit about that research and how you’ve been working with the various retailers in order to address some of these common needs that everybody shared this morning.
ROBINSON: Let me go to the bakery side first. We’ve been pretty focused on freshness, because that’s what everyone would like to know, “Hey, are we focusing on the right thing,” with trying to understand what the consumer’s doing. They’re really spending time on research with the consumers, doing focus groups and consumer intercepts and trying to understand what effect the package has on the consumer’s decision to buy, what they do with it, what do they like about it, the packaging that they’re getting in the bakery, and what do they not like about it. And so, for example, the reason we kind of moved on to this freshness thing is that we found out that over 50 percent of consumers take the packaging – take the cookies and put them in a Ziploc bag when they get home because they end up eating stale cookies. We go, “Hmm, that’s interesting.” And so then we find out that they really struggle with – well, somebody said, “Does the product get delivered in the right way? Does it get home in the right way?” And interestingly enough, sometimes it does and sometimes it doesn’t, even with rigid packaging. And we’re a flexible packaging supplier, so we’re trying to figure out: Is there a role for flexible packaging in the bakery and, if there is, what attributes does the package need to have? We think we have a pretty good idea what the consumer is telling us through these intercepts and focus groups. But at the end of the day, the retailer makes the decision on what they think their consumers want.
So I’d like to hear from you a little bit about, is this freshness issue an issue? Is getting rid of stales an issue? How big of a problem is that for your stores? How big of a cost issue is it? Or should we be going down a different approach and really attacking different attributes that are more important, from your perspective?
ROSE: I think that you have to be able to stack that product, and that was one of the things. We’ve tested Robbie’s packaging before. It’s obvious it’s just different than clamshell. That’s a given. It’s not the same. It’s a horse of a different color. But on the other hand, too, we did find that it did seem like the freshness was increased with the Robbie packaging just by the way it seals, the attributes of the product and how it’s built and so forth. But stackability is a big deal, because bakeries like to stack it up there. It’s all part of kind of the whole theater, if you will, of that. So that is somewhat cumbersome. We did also find, too, that the little handles actually would tear when you reopened the package. You could seal it, close it, sometimes that handle would tear. And that was something that we asked you to address. It just does, really easily, too. But it did last longer. That was cool. And it does seem to work reasonably well for cookies. But we found other things kind of, too, like Misty’s point earlier about when icing starts touching packaging and smearing, you’ve got problems. And the nature of that bag is going to do that. It just is. But the feedback we received was that the customers didn’t like it. Although sometimes you hear that and you’re not sure what didn’t they like, or who are the – to Jac’s point earlier, we love the data. Show me some facts. What are those? Who is the customer that said they didn’t like it? Why don’t they like it? Rather than these generic “throw it out there and hope it sticks” type thing. So that’s just a few points we noticed, but we did like the elongated shelf life, because that is a big deal in the business right now. Shrink is – as you know, you’re hearing that from most retailers. They’re working on that.
MOSKALIK: I think freshness is key. I’ve never tested any of your products, though, so I couldn’t really speak to them. The only thing that I see in our competition that uses flexible packaging on rotisserie chickens is that they’re always laying down. They don’t stand up. And I don’t know why. Or sometimes they hurt the product, or the packaging, because you’ll see potato logs and just random things in them.
TURNER: I’ve seen that and I don’t like that.
MOSKALIK: So I think it takes away from the packaging, too. So the retailer can hurt it, as well, the appearance, to me, when I walk in there, so –
DUDLICEK: If the retailer is not using the packaging the way it was designed to be used sometimes.
LARSON: Yeah. Even not using it would be interesting, from your perspective, of what – you know, as Irv said, that when you make those decisions – we see the consumer saying, “Yes, we’re interested in this, but we’re not sure if it’s the right focus.” So are there other things that you see that packaging is missing, things that we should be addressing, things that are critical for your success or your brand’s success that just simply aren’t being addressed? Anything there that would be of interest to sharing?
MOSKALIK: I struggle in packaging for larger things. We’re about to kick off a meals-to-go program, so there’s a daily special every day. So it’s Meatloaf Monday, Tender Tuesday, you know, real original. But it sells well. It’s one of my highest volume SKUs.
DUDLICEK: It’s a real growth area and it’s what people want.
MOSKALIK: I know. But, you know, it’s all comfort food, too --
MOSKALIK: -- because of where our chain is located.
LARSON: That’s great.
MOSKALIK: But as far as packaging for the grab-and-go area --
LARSON: Large items.
MOSKALIK: -- we could hardly find anything. It was insane. Because – and it’s going to sound silly – Friday is Full Slab Friday and there was no packaging.
TURNER: We have that, too.
HANSON: For what?
LARSON: Full Slab Friday.
MOSKALIK: So, a full slab of ribs.
HANSON: There’s no package for that.
MOSKALIK: And, holy cow. I mean, it took probably six months just to find a bag that would fit a whole slab of ribs, which was strange.
LARSON: So you’re suggesting large sizes are not being addressed.
MOSKALIK: Yeah, larger. We do a lot of hot-case business; 38 percent of my business comes from a hot case.
DUDLICEK: I’d eat half the slab in the store first and then worry about the container.
MOSKALIK: There you go.
TURNER: So your slabs are in bags? You do your slabs in bags?
MOSKALIK: Yeah. I would love to have some sort of packaging that’s branded, that when they go home they have this bag from our hot case that says, “I got this at Brookshire’s.”
DUDLICEK: You’ve got a long name, so it’s about as long as a slab of ribs. You can take advantage of that big --
MOSKALIK: Yes, like the whole thing.
DUDLICEK: -- palette.
MOSKALIK: Because your packaging, the flexible bags for a deli, you can only use, really, for hot. I mean, you can’t just scoop potato salad -- it wouldn’t merchandise properly.
TURNER: Well, we do use a lot of Robbie products for our rotisserie chicken and then we do use them for ribs.
MOSKALIK: And they don’t fall over?
MOSKALIK: You have them for ribs?
TURNER: I haven’t seen that. We use the bag for the ribs for portable warmers, but we still use the actual rib containers through the hot table.
TURNER: So the customer kind of is trained to know that. With the rotisserie children, I still struggle. I still like the old container.
MOSKALIK: The dome?
TURNER: Yes. It sells the chicken and the chicken looks great. But the Robbie bags are biodegradable and they’re more environmentally friendly.
TURNER: And I think that’s important to our customers. We’ve gotten feedback – customers like just how it fits into the kitchen, how you can reseal it and use it. So we did make that change.
MOSKALIK: I hear the dome boxes are ginormous.
TURNER: They’re huge. And this is much more compact, and that’s important to them in the deli.
MOSKALIK: We tested the kraft bag from Bagcraft and that bag, it displays beautifully, but what we found is that it’s self-sealing. With gloves, it became a huge issue, because their gloves would stick to the packaging.
MOSKALIK: So that didn’t work out. So we’re back to domes. But does the bag hurt the chicken? Because I’ve heard that it can further cook the chicken while it’s in the bag.
LARSON: It would further cook the chicken?
HANSON: Steam it.
MOSKALIK: Steam it. Thank you. So it can hurt the product integrity.
HANSON: Does it have vent holes like the dome?
LARSON: It has vents. And we can customize the vents for any application, so that really wouldn’t be an issue. It’s not been one.
LARSON: There are times when it can be reported that way. We understand that. Often when we check into those from a technical standpoint, we find that the warming cases are set too high and that continues that further cooking without it necessarily being related to the package itself. It would occur if it was a rigid container or anything else.
MOSKALIK: Right, right.
LARSON: So usually what we do is we’ll go through during an auditing process or an installation process, where we’ll go out and train the employees how to load effectively and we’ll bring point-of-purchase merchandising, tools, things like that. We’ll actually do hot-case testing and then work with the technical group to make changes or adjustments as we see. Kind of be an eyes and ears, if you will, at store level. So we haven’t had that problem. But we can customize venting if it were to be a concern. Maybe your particular protein would have more moisture built in up front or something like that. So, not a problem.
DUDLICEK: Misty, how are these issues are coming up at Bashas’?
ABELLA: Well, you’re talking about freshness and everything. That’s what we think is important. Shrink-wise, we’ve actually lowered our shrink quite a bit and a lot of that is controlled packaging. Like I was saying, and the way I was describing how you adjust the demographics and stuff like that, we’ve done that over the last few months to get ready for the summertime, which is always our highest shrink time. And so we’ve gotten ahead of it this year and we’ve lowered it considerably. And part of that is knowing shrink, packaging, throwing that away. That’s a big, huge loss. So we’ve really adjusted by doing that just in our packaging for demographics. We’ve lowered our shrink quite a bit. So, yeah, that does help us.
ABELLA: We have to half everything and adjust for the summertime.
ROSE: The Robbie case is nice, though, as far as the little amount of space that it takes, be it warehouse or back-room bakery. That’s huge. And certainly everybody likes that, because it was made – I think Byron made the point earlier. You’ve got ginormous cases and less and less space to put all these cases of packaging. That’s nice. I think that package is about that big, or that case.
ROBINSON: That’s right. That’s all it is.
ROSE: Very cool.
DUDLICEK: That’s very dramatic. Not only for sustainability and packaging material, but for getting it to the store, fuel costs, and trying to have fewer truck miles out there. That’s a significant difference.
ROBINSON: It’s a huge sustainable advantage over any rigid – any flexible package, not just ours, any flexible package. There’s huge sustainability advantages over rigid, both in the making of the product because there’s less plastic in it and, too, in the transportation of getting it there, because it’s usually seven to 10 times less space to put, like you can see in that picture. So, I mean, all flexibles, not just Robbie’s, have huge sustainability advantages in that way.
ABELLA: So are you finding that a lot of companies that are going to this? If it’s a bakery, are their tables -- do they have steps? They’re not flat tables?
ROBINSON: Thank you for asking that question. When we first introduced the product, we didn’t quite think it through as well as we needed to. I know that never happens to any of you, but it did happen to us.
ROSE: It does not.
MOSKALIK: Yeah, sure.
ROBINSON: The point, it did not -- in terms of stackability, was it came out loud and clear so quick. And so actually working with Hen House.
TURNER: I have a picture, actually, of that.
ROBINSON: Oh, do you?
TURNER: Yeah, that I brought with me.
ROBINSON: Oh, awesome.
TURNER: I’ll pass it around.
ROBINSON: We worked with part of their group and developed merchandising racks. And so now we now supply merchandising racks. I’m glad you brought that. Thank you for doing that.
MOSKALIK: Oh, that looks cool. That’s a good idea.
ROBINSON: And, you know, another chain we’re working with actually asked for those racks to look different. They wanted it straight up and down –
MOSKALIK: That’s very cool.
ROSE: That’s cool.
ROBINSON: There’s a little example there of the bag. And you can see them in our booth, by the way. We have the merchandising racks.
LARSON: And what we got down to, simple is better and trying to make sure that our racks did not detract from your bakery, and that was the piece that we finally figured out with your help.
DUDLICEK: The actual displaying of the packaging, is that something that you hadn’t been in before?
ROBINSON: Yeah. We had not been in the merchandising business. I mean, we’re in the packaging business, but our customers said, “Hey, we need to merchandise this. How are we going to do that? We like this.” But, like you said, it’s got to work and we have to display the product. So we’re now in the merchandising business, too.
DUDLICEK: And that’s yet another common opportunity that you have by so closely collaborating with retailers. You’re able to expand your business as well, while helping them to expand theirs.
ROBINSON: Absolutely. You know, our real focus is, how do we understand the consumer? We spend a lot of time with the consumer, which is not very usual for a packaging company, so we do -- because at the end of the day, it’s got to work for your customer. So we’ve got to understand the customer, your customer. So that’s why we spend time with focus groups and consumer intercepts at stores to try and understand what they’re thinking and what they want to do. And we have lots of data and research on that that we’d be happy to share with you on what they think about deli packaging and bakery packaging, and the pros and cons of rigid versus flexible, and all of that. But then we have to figure out, how do we make it work for you, to your point. So we spent a lot of time collaborating and talking and trying to understand versus just selling. We’re trying to -- like this group, we’re trying to understand, what do you want? What are you looking for, and what are your problems that we can be working on tomorrow, for tomorrow? Not just a “here’s our package, isn’t it cool?” type thing.
TURNER: I have to say, on the rotisserie chicken packaging, too, with the Robbie bag – which I did have to have my arm a little twisted on that one – some feedback that we’re getting from the customers, too, which does make complete sense to me, is they like the bag for carrying and the fact that a lot of times, sometimes the deli roast container still can be a little warm, but, too, a lot of times they’re covered in grease on the bottom. And so, as a customer, if I’m wearing my business dress and I’m walking in after work and getting grease and stuff on it, that bag, not having to touch it, is very consumer friendly. It’s done well for us.
ROBINSON: Thank you.
MOSKALIK: They’re gusseted, right?
MOSKALIK: OK. So, from a production standpoint, can you line them up?
TURNER: Yeah. Yeah.
LARSON: It all depends on the hot-case configuration, as well, but a lot of times you’re able to put more into the case at one time.
LARSON: So one of the advantages we hear, operationally, is that during peak periods, when you are trying to spend time at the deli, interfacing with customers, rather than having to have your back turned to them, working on putting more chicken or product out to the deli, because you can preload more during peak times, it’s given people some operational benefits and some exchange with customers that’s beneficial, the little subtle things that sometimes are maybe not as quantifiable.
DUDLICEK: Exchanges like that, I think, especially are important, as we talked about earlier, being that educator, that facilitator, for these food solutions and providing that knowledge. That’s definitely, like you say, not necessarily quantifiable, but in the long run, when people are looking to, “Who can I trust to be my grocer to help me out,” those are the kind of things that stay in the back of their mind.
LARSON: Right. It feels intuitively right that you’re trying to differentiate yourself through your products and through your employees. And so we try and participate as more of an adviser, more of a consultive approach than we do as just a transactional, “Here’s our catalog of things,” which you kind of referenced before. You have to have the opportunity to engage. We were talking earlier about what’s happening at Bashas’ and how important it is to continue to exchange ideas at category level so that it’s direct, and there’s a very thorough understanding of what those unmet needs are. So you have a chance. At least, then, if you can, you can. If you can’t, you can say, I can’t. And then that’s OK. That’s healthy, you know.
ROBINSON: Yeah. One of the things we learned -- I mean, it’s so great when we have the opportunity like this and other times to really collaborate with our retail customers. We learned a lot about signage and how critical that was to this program and to what the consumers liked about it. We do some point-of-purchase signs in our other programs, but not like -- this was customized for each chocolate chip and what all the other, butterscotch or whatever all the cookie types are. And so if you’ll notice in that picture -- and I’m so glad you brought it -- the consumer really responded to not only the package, but the signage. It was easy. They knew the M&M cookies were here. They knew the chocolate chip cookies were here. They didn’t need to look inside the package. It was real obvious.
TURNER: It’s good for the workers as well. It goes here.
ROBINSON: So we learned a lot about how we can help through that process, because we didn’t have the signs in the beginning. And then we tried some things and how the combination of the packaging with the signage and, of course, the benefits of the package ended up providing to the consumer the freshness, you know, made the whole thing work. And so it wasn’t just one thing that made it work. It was a combination of things and the merchandising racks and et cetera. And what it did, which is interesting, is we got rid of the sea of plastic, which is what Hen House wanted also to accomplish, is to -- how do I make this different? I think it was a signature cookie or it was a new cookie or something like that. I don’t remember the details. So it was pretty interesting how it all played out. It was a fun project.
LARSON: If I could, I’d like to explore for just a minute your thoughts on two topics, the first one being social media, specifically the use of QR codes on your packaging. What, if anything, are you doing around that? Are you utilizing that in any way? Do you see that as being relevant? If I could maybe just ask each of you to share your thoughts on that, specifically with your category.
TURNER: We’ve discussed it even with the rotisserie chicken bag. If there was a QR code that you scanned, it took you to the website, and then had recipes, you know, rotisserie chicken recipes for chicken salads or for a soup. We have not gotten there yet. We do some of that in our print ad circulars now, with certain feature items and stuff. So we’ve not incorporated any packaging, but I think that’s where the trends are going.
LARSON: Print ads, no packaging, but you see the trend going that way?
TURNER: Absolutely. It’s a great idea.
LARSON: Thoughts anywhere at all?
MOSKALIK: In specialty cheese, especially for us, QR codes are key because we were kind of underdeveloped in that category. It was really intimidating to our customers. So we signed on with a specialty cheese distributor and our signage will have QR codes and we have all kinds of social media outlets at Brookshire’s through Facebook, all that stuff. And we have a printed publication, too, “Celebrate Cooking,” and they’ll put QR codes in there. We have a corporate chef and he does cooking videos and you can do the QR code and it takes you to the video and --
LARSON: Oh, right in store, then, while you’re --
MOSKALIK: Absolutely. So we definitely are trying to embrace social media. Do you agree?
ROSE: That’s been big. She’s right.
LARSON: Is your QR code currently on packaging or is it on signage?
MOSKALIK: Some of my stuff does have QR codes on the package. It just depends on the cheese itself. And we have it on signage as well.
MOSKALIK: But I would love to do QR codes on more packaging in the deli, especially if it’s for rotisserie chicken. I think that would be awesome, for recipes.
HANSON: About three years ago, we realized we were pretty behind on this, so we, I think, made a significantly -- we have our own app now, a Lund and Byerly’s app, that will direct you to the web page and it will have “shop,” “expire.” It will have our weekly feature sheets, with the recipes. We don’t have the QR codes yet, but it’s been a nice thing. And we also have e-grocery, where they can shop and get it delivered. So our next concept that we’re doing, actually, we’re going to do kind of a European market with a wine bar. And it will be all iPad-ed so that you can actually sit and drink wine and order your groceries and have them delivered. So it will be kind of cool. That will open in December, so it’s going to be -- you’ll be able to take cold meals at home. So, again, one of my focuses is to find packaging that’s going to work for that whole huge entree case that those people are going to take home and eat.
DUDLICEK: Is that going to be in the new store in the old police station in St. Paul?
HANSON: No. This is down in Wayzata. It’s only about eight blocks away, so we wanted something different that was going to not take away from the grocery store, but would incorporate some new trends and what’s going on.
DUDLICEK: And you still have all those hundred-year-old Douglas fir beams to use up so you’ve got to build more stores.
HANSON: Well, the St. Paul store, I think they’re going to use some of those, next to the police station. That will open in February.
DUDLICEK: Yeah. I’d love to see that.
HANSON: And then we’re building the new Edina store, so we’re going to bulldoze Edina and open that up next September.
HANSON: But social media is huge. We’re finding great success, particularly with specialty cheese. Specialty cheese is actually -- the deli’s our largest category and the most profitable. And that takes a whole education process, so we have cheese specialists in every store. I think we were ahead of the trend. We had the kiosk back in 2001 and ’02. And we actually took them out in the three stores we tested them in, but I don’t know if the customers are more ready for them now with the whole iPad thing and iPhone, and now they’re ready to go up and touch and check it out. So we’re looking at putting some of those back in, but we were too far ahead of the trend about a decade ago. But that education piece on specialty cheese on our web page, that’s helpful, with the recipes, and they do need that guidance on those type of things. We tweet and Facebook, and we’re finding out the customers really respond to that. And if you can get it re-tweeted by the Wisconsin marketing boards, so we are going out to tens of thousands of people.
I don’t know if this is relevant now, if I can just jump in with this. One of the things that I think, there’s a lot of ignorance on packaging. And I’ve read that when you talk about the true carbon footprint of packaging, that actually your plastic bag is more eco-friendly to the environment than the paper ones when you consider all the resources that go into the cutting of the trees and the processing and the amount of water and the carbon and all of the diesel to haul it. So if you’re really looking at the true carbon footprint, supposedly, the little plastic bags are more eco-friendly. Now, I don’t know if that’s true. I’d like to know if that’s true. Because a lot of our consumers want to know that. What’s the true carbon footprint? They’re building that bamboo plant in North Dakota, I think, but right now it’s coming from China. Whole Foods uses those. So when you look at that carbon footprint, and you’re hauling it over the ocean with all the diesel and everything, is that really right for the planet? But the customer wants to know. So this education piece, to have you come in with a package like this and actually talk about the true carbon footprint, if you could prove that it’s more eco-friendly than some of this, because right now what I think the consumer focuses on is, is it made out of petroleum. That’s what they’re adverse to. They don’t want petroleum. They don’t want that. And I think we could use help with that.
ROBINSON: We have full LCA studies. We have one engineer, that’s all she does -- well, three-fourths of what she does is take our customers’ packages and they say, “Well, we want to look at going from this to this, what happens,” and then takes it all the way from beginning to end, including transportation and --
ROBINSON: -- everything. And there’s all the computer programs that we purchased that go through those calculations. And it’s been third-party approved, NGO-approved, because one of our retailers demanded that. So it’s a real clean process. And it can really help you. If you’d like us, we can help you do that on any product.
HANSON: But that would help with social media, too, if you can talk about those moves. What’s that chain in California that everything is so -- they talk about their LED lighting and the fluorocarbons and -- is it Fresh & Easy or -- it’s out in California. I don’t know if it’s doing that well now.
DUDLICEK: Fresh & Easy is Tesco’s --
HANSON: Tesco’s. They talked about all that “eco” everywhere you looked in that store.
ROBINSON: Right, because it’s a European chain.
HANSON: Right. Sorry to jump in on that piece with social media, but if we could talk about that, the consumers -- they want to know.
DUDLICEK: Misty, how about social media?
ABELLA: Well, we haven’t gotten into the codes yet or anything. We’ve gotten into texting with our loyalty card and we have gotten into Facebook. And we’re catching up. We had a little stall there for a little while. But even as we speak, we’ve been working the last two months on bakery pages and information, getting that out there and to the Internet and everything. So that’s another project that’s on the plate right now.
LARSON: The other topic that I’m curious about is, do any of you utilize the thinking or the concept that bundling items within the grocery store is important? In other words, using couponing, using advertising, things of that nature to derive multiple unit sales and, if you do, and I’m getting a lot of heads nodding yes, is there a vehicle that you prefer or you would like to see happen within the packaging industry that could help with that? In other words, if you were interested in a slab of ribs going out, I know that your ads will often say, get the ribs and coleslaw bundle, and out they go for a price. That’s understood from the consumer side. But when they’re actually in the store, are there means of doing that? For example, couponing or IRCs available at the counter or point-of-purchase that drives them that way? Do you have any means or methods to do that other than just the actual ad that they get in the newspaper or the mail?
MOSKALIK: We use loyalty card data and we will -- you can sign up for texts -- we can text deals to you that automatically load onto your card. We do the exclusive rewards and e-deals and that’s through e-mail. You can --
ROSE: Like “Your Points,” the gasoline thing. All this stuff loads on the card.
MOSKALIK: Yeah. We have so many.
ROSE: There’s tons of that stuff.
MOSKALIK: But we do the “Real Big Deal,” which is an all-in-one unit, and if you buy one item, you get like five things free, and just stuff like that. And that incorporates all departments within the store, not just in your department. But as far as bagging, like ribs and coleslaw together, for that to work with the POS system at Brookshire’s, you have to scan them, so there would be no point in, from a packaging standpoint, putting them together, unless you’re going to sell it under one single PIU.
LARSON: Do you use IRCs at all for any of this? In other words, instant redeemable coupons that would be applied to a package that you would peel off and hand them to someone? Do you do that?
MOSKALIK: Yeah. We do it, like with cheese and meat.
ROSE: We do it in specialty cheese. Sometimes a specialty cheese will come out with that.
MOSKALIK: Like, blue cheese wedges. If you buy this blue cheese wedge, or if you buy a thing of steaks, get 50 cents off. And our vendors supply the IRC coupons and we direct them on what to put --
LARSON: And you apply them?
ROSE: We’ve done that with some Pillsbury stuff. If you buy this, you get something off, say, a General Mills product in the grocery side of the store, that kind of thing.
TURNER: We’re trying something new next week, if my pictures ever show up, but we had a new fixture design that had hooks on both sides so each day we do the meal night. So Tuesday is, like, Chopper Chicken night, which is your components of your chicken. And that’s our best one. And we’ve done it for years and we actually do it really well, with, like, your mashed potatoes and your macaroni or your sides, to where we had a new bag designed. It’s a “Fresh Meals To Go” kind of thing. It says “Grab Grub” on the side. It’s kind of fun. So we’re trying a new concept where the bags will just hang on there. So our signage is, say, “Hey, take your bag to the deli today. It’s Chopper Chicken Day or it’s Full Slab Friday,” kind of thing. So you would take your bag. You get your items put in. And we are going to try just doing --
MOSKALIK: Just one PIU?
TURNER: -- one PIU and go through. And it simplifies it for the customer and we can still track it that way to know what we’re selling for individual units.
TURNER: So we’re going to see. We’ve been talking about it for a while and we’re going to give it a test and see how it goes. It’s just kind of the new concept with, “Hey, take your bag.” Before, it’s just been a sign. But it will add a little more theater, I think, to it, and get them to thinking, “Hey, any day of the week we can go and get our bag, and go to the deli,” for the meal.
TURNER: We’ll see how it goes.
DUDLICEK: We are at the end of our time, so does anybody have any brief closing statements about deli packaging, the future of the deli department, and how you’d like to collaborate more closely with your trading partners? Please jump in.
ROSE: Just to reiterate from earlier, partnership is really important. And not just selling product, either way. Partnerships are a big deal and the companies that can really customize in some cases or really sit down and say, “What do you need to do, or what do we need to do for you,” and do their very best to make that work. And on the part of the retailer, the same thing. I can’t maybe have everything I want, but somewhere in that middle, we can find what we need and serve that customer. Companies that do that, we really appreciate.
MOSKALIK: And understanding the business model and the direction that we’re going, that’s key, too, like going to the stores.
ABELLA: I agree. Relationships, finding what we need to make it work out there is very important.
HANSON: For freshness, the grab-and-go feature, we made packaging changes and watched sales go down as much as 25 percent. Going back to the original, they go back up. People buy with their eyes, and the packaging makes a huge difference. It cost me a million dollars one year in a packaging change that I thought was eco-friendly, and they didn’t want it.
TURNER: The customers didn’t like it, yeah.
HANSON: So, having that kind of partnership to achieve all those goals of functionality and a partner, and also the look.
DUDLICEK: I’d like to thank everybody so much for taking time out of your schedules to participate with us here today.