Central Grocers, Inc. has announced that the company and all of its subsidiaries have voluntarily elected to file for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company intends to use this court-supervised process to conduct an orderly sale of its Strack & Van Til stores as going concerns and anticipates entering into a sale agreement with a stalking horse bidder in the near future. Central Grocers is also seeking to sell its distribution center in Joliet as it winds down its wholesale distribution operations. The company has been cooperating with its lenders and expects to have access to sufficient liquidity to continue operating its stores and winding down the distribution center in an orderly fashion.
Strack & Van Til Stores Are Open for Business
All 22 Strack & Van Til, Town & Country Market and Ultra Foods stores in Indiana and Illinois are open and serving customers. Employees are receiving their pay in the ordinary course. Strack & Van Til intends to pay vendors in full for goods and services provided on or after the filing date, May 4, 2017.
Jeff Strack, President and Chief Executive Officer of Strack & Van Til, said, “Our stores are open, and we are as focused as ever on supporting our customers and providing the legendary service that we are known for. As we move through this process, our priorities, values and commitments to our customers and our communities will not change. We thank our loyal customers for their continued support, and we thank our employees for their hard work and dedication.”
Central Grocers Working Toward Sale of Stores and Distribution Facility
Central Grocers is continuing to work toward implementing a sale of the Strack & Van Til stores and a sale of its distribution center in Joliet and certain other assets. It is anticipated that any such sale transactions will be conducted pursuant to a court-supervised auction process under Section 363 of the U.S. Bankruptcy Code.
Ken Nemeth, President and Chief Executive Officer of Central Grocers, said, “In light of the increasingly difficult environment for independent supermarkets and retailers, we have been working tirelessly to achieve an outcome that is in the best interests of our stakeholders. We are using this court-supervised sale process to provide us the time and flexibility to conduct an orderly sale of the Strack & Van Til stores, while we work to sell the warehouse in Joliet and wind down our wholesale distribution operations.”
The company has filed a number of customary motions seeking court authorization to continue to support its operations during the court-supervised process, including payment of employee wages and benefits. In addition, the company intends to file a motion shortly in the U.S. Bankruptcy Court for the Northern District of Illinois seeking to dismiss the involuntary bankruptcy case commenced against Central Grocers in view of its voluntary Chapter 11 filing.
On Tuesday, April 25, Teamsters Local 703 and Central Grocers reached an understanding to resolve the union’s action for a temporary restraining order. Local 703 originally filed the action in federal court on April 18 based on information that Central Grocers would sell its facility in Joliet, Illinois.
The Teamsters represent approximately 300 members at Central Grocers, the supplier to hundreds of retail grocery stores in Illinois and majority owner of Strack & Van Til stores in Indiana.
Local 703 had sought an injunction of any sale, including a temporary restraining order, pending arbitration of the union’s claim that the sale would violate its labor contracts. Local 703 now has agreed to withdraw the action, without prejudice to re-filing, in exchange for certain assurances from Central Grocers regarding a potential transaction and receipt of certain confidential information that will allow the Teamsters to better assess the transaction and its potential impact on the labor contracts and members.
The arrangement will allow the seller and buyer to proceed with exploration of the potential transaction without the disruption of litigation, while giving Local 703 new and concrete information necessary to better protect its interests and the interests of its members.
“Withdrawing our original action at this time is in the best interest of the union and our membership,” said Thomas W. Stiede, Secretary-Treasurer of Local 703. “Preserving our strong labor agreements in the grocery industry is paramount. The Teamsters will continue to work to gather information in the effort to protect members and prepare for what the future may hold.”
With the rapid growth of multicultural households in America and their unparalleled influence on the marketplace, market researchers suggest that there is a strong need for retailers to revise their in-store strategies to include a wider range of fresh food products and flavor profiles that cater to the multicultural consumer set. With this in mind, Nielsen has released a comprehensive report to help retailers understand the influence multicultural consumers wield across the meat, produce, seafood, deli and bakery categories. The report entitled, “A Fresh Look at Multicultural Consumers,” reveals strategic insights for retailers looking to leverage new growth opportunities across the perimeter over the next several decades.
Multicultural consumers are the fastest growing segment of the U.S. population and the growth engine for fresh food categories within the grocery space. According to this Nielsen report, multicultural households spend a higher share on fresh food as a percentage of their total food spend compared to non-Hispanic white households. In fact, multicultural consumer shoppers make 3 percent more trips to the store containing fresh items and spend 4 percent more per year on fresh items. This results in a $2.2 billion opportunity for retailers.
For many multicultural families, fresh food is a dietary staple. The multicultural preference for fresh comes from cooking and eating norms that centrally reflect the unique cultures of African Americans, Asian Americans and Hispanics. That said, the allure of multicultural flavors and desire for fresh food are influencing a wider range of shoppers and becoming a key driving force for fresh growth.
“In order to tap this critical market, retailers need to rethink their delivery and assortment strategies of fresh products being offered to today’s increasingly multicultural shoppers,” said Courtney Jones, Vice President of Multicultural Growth and Strategy at Nielsen. “To be successful, retailers must understand the importance that culturally relevant, fresh offerings play in the multicultural shopper landscape. Retailers must also embrace the many layers of multicultural consumers and the undeniable ‘halo effect’ that those consumers are having on mainstream non-Hispanic white shoppers. The multicultural consumer covers a broad spectrum, from multi-generational families to Millennials, to Asian American, African American and Hispanic subgroups that have been influenced by distinct global culinary traditions. Retailers must consider the multi-ethnic tastes of their current and desired customers and recognize that the palates that favor multicultural flavors are influencing the taste preferences of non-Hispanic whites and society at large.”
The report’s key findings include the notion that multicultural flavors have moved into the mainstream for the deli department and continue to grow, also attracting non-Hispanic white shoppers who are inspired by the ethnic flavors found in the deli. Multicultural consumers are taking advantage of the quick and easy meal solutions and meals for large families within the deli department.
In the produce department, all kinds of shoppers are being inspired by the produce used in culinary traditions other than their own, and social media influences, television cooking programs and popular restaurant flavor trends are infiltrating the produce aisle. For example, the growth of habañero, with items popping like habañero grilled vegetable and even habañero margaritas.
Neilson’s research found that multicultural consumers spend more in meat and seafood departments than any other fresh department. Within the seafood department, multicultural households spend $62 a year, compared to non-Hispanic white households at just $43. Multicultural consumers are less willing to purchase branded fresh meat and seafood items; instead there is preference towards made-to-order, unbranded meat products, typically prepared behind the counter.
The bakery offers the biggest opportunity for multicultural consumers, who spend only 9.8 percent of their fresh dollars on bakery items, according to Neilsen. The report suggests that the bakery’s proximity to the deli should be leveraged to create strong cross-department connections for multicultural shoppers across multiple entertaining categories.
The Specialty Food Association is reporting that dollar sales for the specialty food industry grew by 15 percent between 2014 and 2016 and reached $127 billion in annual sales in 2016, now accounting for 14.8 percent of all food sales at retail. Snack food sales reached $16.3 billion in 2016, and snacks now account for about 28 percent of the entire specialty food market. Jerky and meat snacks led the growth for the snack food segment, leaping ahead by more than 86 percent between 2014 and 2016, while sales of chips, pretzels and similar snacks grew by 13.6 percent between 2014 and 2016 and now account for more than $3.5 billion in annual sales.
Cheese, including plant-based cheese alternatives, still continues to be the leading category in the specialty food market, with $4.422 billion in sales during 2016, for a 12.4 percent increase between 2014 and 2016.
The information comes from the Specialty Food Association’s annual report on the state of the specialty food industry. “The State of the Specialty Food Industry 2017” is a collaboration between the Specialty Food Association and market research firm Mintel. The report indicates that while specialty food sales continued to climb in 2016, growth in retail and foodservice channels slowed over the previous year, partly due to an increase in online purchasing for these products.
Some of the growth in the retail channel is coming in mainstream retail channels, with growth in sales in chain grocery stores and mass merchants outpacing that in natural and specialty chains for the first time. Growth is also happening in the foodservice channel, as more fine dining restaurants adopt specialty food products into their menus. Foodservice represents more than one fifth of specialty food sales and grew by 13.7 percent between 2014 and 2016.
World Finer Foods (WFF) has chosen William Flynn, a senior executive with more than 20 years of experience leading global finance teams, as its Chief Financial Officer, according to company President and CEO Susan Guerin.
This latest addition to World Finer Foods reinforces the company’s commitment to bringing together an award-winning team of exceptionally talented professionals and industry experts, offering unparalleled expertise in brand management, sales, marketing, finance, distribution and logistics.
Flynn joins World Finer Foods after 12 years at Sharp Americas, first as vice president and controller, and for the last seven years as senior vice president and chief financial officer. Prior to Sharp, Flynn was international controller at AT&T managing day-to-day accounting operations and a worldwide staff.
“William brings to World Finer Foods tremendous leadership and management qualities, a track record of smart financial oversight for two global companies and an eagerness to tackle the unique financial operations of WFF,” said Guerin. “His expertise will certainly be of value in managing a global business such as ours and we are delighted to have him join our leadership team.”
“World Finer Foods is well positioned in its market and has a product portfolio that aligns nicely with evolving food purchasing and consumption habits,” said Flynn. “I’m excited to have the opportunity to drive operational efficiencies throughout WFF and have a positive impact on the financial performance of the business.”
Flynn is a certified public accountant with a master’s degree in controllership from Fairleigh Dickinson University and a bachelor’s degree in accounting and economics from Rutgers University.
Regalis Foods, a New York City-based luxury food distributor to chefs and restaurant groups, is aquiring a stake in Rare Edibles, a specialty food purveyor in Dallas, Texas. As part of the merger, Rare Edibles will change its name to Regalis Texas in first quarter of 2017.
“We look forward to bringing our diverse, extensive relationships with some of the country’s most respected foragers, farmers, fishermen and producers to Rare Edibles’ already robust offerings,” says Regalis Foods Founder Ian Purkayastha. “With expanded ties to regional and international high-end food producers, Regalis Texas will now offer a broader portfolio to the state’s growing high-profile culinary industry.”
The idea for Rare Edibles occurred to its creator, Chef Bryan Dunn, in 2011 while working under Donald Link, chef/owner Herbsaint and Cochon in New Orleans. Rare Edibles quickly established itself as the authority and source for heritage meats, artisan cheeses and seasonal foraged items to top Dallas chefs and restaurants, helping to elevate the dining scene to one of the most exciting in the country.
“Our focus has always been on the rare, unique and delicious. Now, through Regalis’ access to exceptional suppliers in the Northeast and Europe, we can deliver a richer, deeper inventory of luxury products to cities throughout Texas,” explains Dunn.
Purkayastha began his career by selling truffles at age 16 and founded Regalis Foods in 2012. After partnering with David Yourd and Karrie Kimble, Purkayastha expanded his offerings to include Regalis-branded caviar, wild foraged mushrooms and greens, live seafood and direct European imports. The company boasts a devoted clientele of world-renowned chefs such as David Chang, Sean Brock and Eric Ripert.
Complementing Purkayastha’s expertise in luxury ingredients, Regalis Partners Yourd and Kimble bring 20 years of industry experience in building multiple specialty food distribution and import companies. Their business acumen and depth of connections will fuel Regalis Texas’ growth.
KeHE Distributors, LLC (KeHE) celebrates a year of growth and achievements in 2016. In addition to a rewarding first year as a Certified B Corp, the company advanced on its strategic growth plan with the acquisition of Monterrey Provision Company, the addition of a new distribution center in Colorado, and through various leadership initiatives.
“Our achievements in 2016 are a testament to our motto: Where KeHE Goes, Goodness Follows™,” said Brandon Barnholt, President and CEO, KeHE. “This has been a memorable year for KeHE, and we look forward to building on this momentum in the exciting year ahead.”
Certified B Corp Status
KeHE formally announced its B Corp certification at Natural Products Expo West 2016. Barnholt led a signing of The B Corp Declaration of Interdependence with representatives of the B Corp community. In October, the nonprofit B Lab named KeHE a B Corp “2016 Rookie of the Year” for its outstanding commitment to the movement: using business as a force for good.
In February, KeHE acquired Monterrey Provision Company, a San Diego-based distributor of fresh perimeter products. The Monterrey acquisition aligned two companies with complementary assets and skills, advancing on KeHE’s vision to expand its footprint in this cool growth category.
KeHE broadened its reach with the arrival of its 17th distribution center. Located in Aurora, Colorado, near Denver, this state-of-the-art 270,000-square-foot facility was built from the ground up to meet LEED Gold certification for energy-efficient practices. KeHE celebrated the opening of the site in August with a philanthropic activity that provided 1,000 boxes of food to area families in need.
KeHE experienced double-digit growth across its award-winning trade shows. The Natural Spring Show saw a 27 percent increase in attendance from 2015, and the Natural Fall Show saw 35 percent attendance growth since 2014. KeHE looks forward to welcoming suppliers and retailers to the Summer Selling Show in New Orleans on February 7-8, 2017.
KeHE also expanded its leadership team with the appointment of Timothy J. Wiggins as Chief Financial Officer in July. In his role, Wiggins leads all aspects of KeHE’s finance function and strategic planning, as well as business unit and subsidiary performance.
The Winter Fancy Food Show in San Francisco is shaping up to be the largest in its 42-year history, with more of the latest specialty foods and beverages to discover than ever before. The show takes place January 22-24, 2017 at Moscone Center.
218,000 square feet – almost four football fields – of exhibit halls will overflow with thousands of new products from across the country – California to Texas to Maine – as well as from 30 countries. California will boast the biggest show presence with over 330 companies represented.
Registration is now open at fancyfoodshows.com.
As the largest marketplace devoted exclusively to specialty foods and beverages on the West Coast, the show is the place to be for buyers from top names in retailing and restaurants. Attendees spot trends, find new foods, and make new connections.
“Specialty food sales are exploding right now,” says Phil Kafarakis, President of the Specialty Food Association, which owns and produces the Winter Fancy Food Show. “We’re seeing millennials and men emerging as key consumer groups, foodservice sales are experiencing impressive increases, while online shopping and retail serve as key consumer sales channels. People are very interested in high quality, great tasting food and specialty foods offer both.”
Show highlights include a full range of educational programming focused on smart growth and innovation targeted to all levels of the specialty food industry from newcomers to established manufacturers.
Other show highlights include:
Unified Grocers, Inc.’s Executive Vice President, Chief Financial Officer Michael F. Henn will retire effective September 30. Effective October 1, Christine Neal will be promoted to the position of Executive Vice President, Chief Financial Officer and Treasurer.
Mike Henn joined Unified last October following the retirement of Richard J. Martin. “It’s been a privilege to work with a great management team that has accomplished so much in the past year to position the company for solid growth going forward,” he said. “While personal circumstances have driven my decision to step back from a full time role, I will continue to assist the company in a more limited capacity as it transitions to new financial leadership.”
“Unified was extremely fortunate to have Mike on the team to guide us through a period of transition and to set the financial foundations for the next phase of the company’s growth,” said Unified President and CEO Bob Ling. “I’m grateful that he will continue to support the company going forward. Mike has played an important role, and all of us at Unified wish him well.”
Christine Neal has agreed to defer her own planned retirement to accept the CFO role while the company commences a search process for the CFO position, providing a seamless transition for the financial management function of the company.
“Christine is a very talented executive with a strong track record of leadership in finance and strategy, and excellent knowledge of our company,” said Ling. “In addition to her proven financial management skills, she has been a key driver of the company’s new strategic plan, which we expect to finalize soon.”
“It’s an honor to take on the role of Chief Financial Officer at this important time in Unified’s history,” said Neal. “I’m excited to have the opportunity to play a larger role as we look to grow the business and enhance the success of our members.”
As CFO and Treasurer, Neal will be responsible for finance, accounting, information systems, internal audit (administrative responsibility) and strategic planning. She is also President of Unified’s wholly-owned subsidiary, Grocers Capital Company (GCC).
Neal joined Unified in 2003, and in her previous roles she was responsible for finance, treasury, strategic planning and human resources. Prior to the joining the company, Neal acquired a wide range of financial experience within the food industry, including serving for several years as a financial consultant to Unified. She also served as chief financial officer for the California Restaurant Association, the largest state restaurant and hospitality trade organization in the United States, and was controller for Gelson’s Markets, a premier upscale grocery retail chain in Southern California. Neal began her career at the Cincinnati office of Arthur Young & Company, where she worked for eight years as an accountant and audit manager.
Neal currently serves on the board of directors of the National Cooperative Bank. She has previously served on the board of directors of the National Cooperative Business Association (NCBA) and the Greater Los Angeles Chapter of the American Red Cross. She earned her bachelor of science degree in accountancy and finance from Miami University in Oxford, Ohio, and is a certified public accountant.
C.A. Fortune has agreed to acquire CSW Food Brokerage, based in Livermore, California. C.A. Fortune is a natural, specialty and bakery/deli sales and marketing agency currently covering the eastern and central market areas. CSW is a regional Natural, Specialty and Bakery/Deli sales and marketing agency covering the northern California market, which also includes Nevada, Hawaii and parts of Oregon. The acquisition of CSW will mark the first step in the expansion of C.A. Fortune’s coverage to the western United States.
Bob and Christine Wingfield, longtime owners of CSW, will lead the northern California operations for C.A. Fortune. “We are genuinely excited and look forward to working with C.A. Fortune,” Bob Wingfield said. Throughout their years in the business, the Wingfields have excelled at attracting key people with deep industry knowledge to their team. This depth of talent will enable C.A. Fortune to hit the ground running.
“When we launched our initial business plan in June 2013, the vision and goal was to build the premier, privately-held national sales and marketing agency focused on the Natural, Specialty and Bakery/Deli trade channels,” said Tyler Lowell, Managing Partner of C.A. Fortune. “With the addition of the CSW Brokerage business and the professional team that Bob and Christine have developed, we are proud to extend the C.A. Fortune brand into the western U.S.”