SOCIAL SUSTAINABILITY Kroger Empowers and Enables Employees to Engage with Their Communities

SOCIAL SUSTAINABILITY Kroger Empowers and Enables Employees to Engage with Their Communities BY MIRA SLOTT PHOTO COURTESY OF KROGER LAST YEAR, KROGER HIT $90.4 BILLION IN market banners including ANNUAL SALES ACROSS TWO-DOZEN BANNERS Kroger, City Market, Dillons, Jay IN 30-PLUS STATES, EVEN AS IT RAISED SUS- C, Food 4 Less, Fred Meyer, TAINABILITY TO THE NEXT PLATEAU. Countering Fry’s, King Soopers, QFC, trends by racking up multiple quarters of consecutive same-store sales Ralphs and Smith’s. The mis- increases through the recession and economic downturn, the strategy sion, however, is rooted in seems to be working. historic precedent. In a world where corporate executives drive or discard sustainability initiatives based on the bottom line, Kroger champions the social human- Deep Roots In Charity itarian leg of sustainability, so often subjugated or played superficially as a Kroger’s pledge to social marketing tool. Yet Kroger’s social initiatives pack a punch that parallels its sustainability is personal, deep size, reverberating through communities with life-altering outcomes. and committed. This is not a Produce executives should take notice, as most of Kroger’s social ini- fleeting trip to the altar. “We tiatives channel fresh fruits and vegetables, beseeching industry have pictures during the opportunity. Many of these programs, whether it is through donations to Depression of founder Barney PHOTO BY MARTY WHITACRE charitable groups or through produce department volunteerism, touch Kroger giving away food to the PRODUCE BUSINESS Editor-in-Chief, Jim on a range of social issues, from the fight to end hunger and address- hungry, opening his arms to Prevor, presents the Retail Sustainability ing the obesity epidemic, to health and nutrition issues and supporting people lining up at the store for Award to Lynn Marmer, Kroger’s senior vice president of corporate affairs, chief environmentally friendly, locally grown and state agriculture programs. day-old bread,” says Lynn sustainability office. Ironically, Kroger’s success stems from an uncanny ability to morph Marmer, senior vice president of from corporate conglomerate grandiosity to an independent, neighbor- corporate affairs, chief sustainability officer. “So the concept of giving hood store mindset. The company generates a groundswell of support was always there. However, the ability to scale that to hundreds and hun- by engaging and enabling its employees — more than 330,000 strong dreds of stores, each facing different criteria, has required real — as well as growers, suppliers and customers. partnership,” she says, of the infrastructure, logistics and other com- Kroger’s mantra is to empower those throughout the company to stay plexities involved in building and running Kroger’s Perishable Donations nimble and attentive to local community needs. This undertaking could Partnership (PDP) program. seem daunting with 2,400-plus stores dispersed among its varied super- With participation at almost 90 percent of Kroger’s stores, PDP gener- MAY 2012 • PRODUCE BUSINESS 27 ated 41 million pounds of food, or an equivalent mental in cause-marketing initiatives, including of some 35 million meals, in 2011, and is on managing the Kroger Foundation, its non-profit trend to match those numbers this year. In the organization that makes grants to other chari- spirit of the common good, Kroger has no qualms ties, schools and public entities. sharing its innovative program model with retail “PDP wasn’t an easy program to implement competitors, including discussions with some of and scale, and there were barriers we had to Kroger’s fiercest competitors, says Marmer. overcome tied to food safety from both sides of “We’re happy to pass on our learning. the spectrum,” Ausdenmoore continues. “First, Many times it’s the smaller grocers who are internally for the food safety and risk manage- overwhelmed by the idea,” adds Janet Aus- ment teams, we had to get comfortable denmoore, manager of corporate affairs, and partnering with an outside agency and devel- one of the chief staff members who is instru- oping and monitoring standardized guidelines PHOTOS COURTESY OF KROGER and certifications; then, training employees on handling procedures and insuring proper stor- age, refrigeration and temperature control once the product leaves our facility.” Kroger’s commitment to alleviating hunger and doing the right thing wasn’t about “going green,” she says. However, putting these causes under the sustainability umbrella raises them to the level of an institutional imperative; looking through the sustainability lens creates a collec- tive conscience as a community, she explains. PDP’s genesis began eight years ago, pulling from programs within specific banners and looking at what other supermarket chains were doing, according to Marmer. “We looked at what our Fred Meyer folks were doing with food rescue in the Pacific Northwest, a joint effort with some local food banks collecting fresh food that needed to be turned around quickly, and to Food Lion in the South, where it was happening on a very small scale.” Catapulting PDP, Kroger teamed up with Feeding America, the country’s largest domes- tic hunger-relief organization, which orchestrates a network of some 200-member food banks. “I spent 15 years on the board of a local food bank, so I understood the impor- tance and challenge of offering variety and fresh nutritious items like healthy fruits and vegetables,” says Marmer. “Food banks live and die on excess,” a crude reality, says Eric Davis, director of retail product resourcing at Feeding America, head- quartered in Chicago, IL. [See his interview detailing the Kroger partnership on page 32]. 28 PRODUCE BUSINESS • MAY 2012 Yet the food industry continues to become banks, we see variable sophistication and fre- much more efficient, managing leaner inven- quency of pickups with donations,” he continues. tories and cutting out shrink. Kroger began pilots at Fred Meyer, and its Fry’s division in Arizona is just getting its feet Role Of Produce wet, Taylor reports. “We knew it was tricky Due to its highly perishable nature, produce going in, modifying guidelines and Best Prac- presents further challenges, according to Joe tices for produce,” he says, adding, “a big Miskimins, Kroger’s vice president of produce opportunity is in bulk produce — the harder and floral, who remains undeterred in efforts to items, such as apples and potatoes.” grow the produce department’s participation in Kroger also has expansion plans in play for the program.[Miskimins discusses sustainabil- its 212-store Atlanta division, as well as its Indi- ity from a produce perspective on page 44-45]. ana operations, says Max Ostermyer, logistics PDP’s survival hinges on the frequency of shrink manager. “We still have a lot of work to pickups and seamless logistics. To that end, do in Atlanta, but we’ve got the commitment PDP is managed through Kroger’s shrink depart- from St. Vincent De Paul and the Atlantic Com- ment, rather than public affairs. “The reason the munity Food Bank to do that. Jay C Food Stores shrink department has taken over PDP opera- is a little subset of stores that we have in south- tions is because we have more boots on the ern Indiana. Last year, they had one store in the ground. Operations people in our stores and in PDP program and we got commitment at the our districts can help us to educate and follow end of last year to add another 29 stores to the up on a regular daily basis,” says Ed Taylor, program by this year, so that’s a big win for us director of shrink management, pointing out that as well.” Ausdenmoore and Marmer have done a great “Produce has always been a part of PDP, job developing relationships with food banks. but we’ve recently put new emphasis on it, re- Produce is the biggest challenge for PDP. “We launching the program to increase produce need better execution through the supply chain. donations,” says Kelly McGamon, public affairs Turning product is key. How can we increase leader for King Soopers in the Colorado region. pickup frequency?” asks Taylor. “As we look “It comes at an important time with so much through the enterprises, the divisions and food economic hardship,” she says. 30 PRODUCE BUSINESS • MAY 2012 Kroger Partners With Feeding America While donations might technically be bruised or past their “sell-by date,” Kroger puts them to good use and into the hands of those who need them. Eric Davis, director of retail product resourcing at Feeding America, based in Chicago, IL, sits down with Mira Slott, special projects editor for PRODUCE BUSINESS, to discuss the ins and out of its partnership with Kroger. PRODUCE BUSINESS: Could you for Food Protection, a non-profit box that could contain meat, deli, quality, and what was being set aside tell us about your partnership organization made up of food indus- produce and bakery products. for composting and trash, the reac- with Kroger? try people, based in Washington, tion was, “Wow, this product still Eric Davis: Kroger, as the largest D.C., which created a set of guide- PB: Is that range of variety and has two to three days shelf-life and traditional supermarket chain, has lines to allow companies to donate freshness unusual? we can use it.” been very progressive about rescu- perishable products to food banks. Davis: The great thing about this ing nutritious food and making sure We took those guidelines to Kroger particular program is that almost PB: How do you work with it comes to us and doesn’t go to to use in setting aside perishable all products we’re picking up from Kroger to balance pockets of waste so we can feed the hungry products still wholesome and use- the grocery store are nutritious, the country where the food through our network of some 200 able for food banks to collect.

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