SOCIAL SUSTAINABILITY 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, , Jay IN 30-PLUS STATES, EVEN AS IT RAISED SUS- C, , , TAINABILITY TO THE NEXT PLATEAU. Countering Fry’s, , QFC, trends by racking up multiple quarters of consecutive same-store sales 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. except perhaps bakery. The pro- banks are less sophisticated or food banks. We are now the largest Basically, we sat down with duce, meat and deli items meet unable to meet the demands of domestic hunger-relief organization, Kroger and came up with a program nutritional guidelines. the community? but Kroger is one of our oldest retail strategy and more comprehensive One of the things in food banking Davis: This program has exponen- donors. It was donating food when standards. Food banks could come is making sure the food we supply is tially grown over the years. we were named Second Harvest, to the stores two to three times a nutritious. We want to make sure Opportunity has exceeded capacity. from the very beginning more than week. To make sure product was the poor are receiving food that In areas where Kroger has hundreds 20 years ago. picked up and stored at the right meets all the nutritional guidelines. of stores that exceed food bank temperature, Kroger set up an addi- We may not pay for a tomato that capacity, there has been a need to PB: How did Kroger’s involve- tional set of guidelines that food has a slight bruise or cut in it, but elicit smaller organizations to help ment evolve? banks would use to do a second there is nothing wrong with it. This pick the product up. While this Davis: Initially, we began testing the inspection and double check that product was going to a landfill, or at empowers food kitchens and concept with Kroger about eight everything meets those guidelines, best, to a composting facility, and pantries to pick up food directly, we years ago. I actually started the pro- and if something falls through the now we are able to feed someone have to be sure they can do that gram, and Diane Letson, director of cracks, the product is discarded. in need. safely. We can’t just turn that over business development, is assigned to the agency until they have the specifically to the Kroger account. PB: Could you take us through PB: In speaking with Joe proper equipment and operations to Traditionally, food banks have a typical scenario? Miskimins, Kroger’s vice presi- handle it. received food donations through Davis: At the beginning or end of dent for produce and floral, he reclamation — damaged non-per- the day, associates walk those pointed out that many fresh PB: Who determines that? ishable goods — but these have departments and pull everything off fruits and vegetables can be dif- Davis: That’s Feeding America’s been on the decline because retail- the shelf or case that doesn’t meet ficult to donate due to their job — to certify those organiza- ers are becoming more efficient. Kroger market standards, and they highly perishable properties, tions and ensure they have the We asked Kroger what other items place products in appropriate storage but that the program is contin- proper operating environment. were being thrown away and units, so meat goes in a freezer, pro- uing to expand in this area. Kroger also supports Feeding learned that meats, deli products, duce in a cold dry place, etc. What is your perspective? America through cause-marketing produce, bakery and dairy, Typically with Kroger product, Davis: When the program started, programs that help us build the although still wholesome and use- it is picked up two to three times a in general, all categories were infrastructure program. We can able, didn’t meet standards for week and goes back to the food authorized, but some Kroger divi- buy thermal blankets, refrigerators customer purchase. bank where product is again sions started with bakery and then and other equipment to ensure the Perhaps the banana didn’t have inspected and sorted, and then dis- added meat and then added dairy program’s viability. enough shelf-life. The same went tributed to organizations that and now are adding produce. Not all for meat. If Kroger is marketing supply products to clients directly, Kroger divisions have all categories, PB: What opportunities do freshness, it didn’twant to sell meat such as a church or food pantry, but that’s the current mission — to you envision going forward that past its sell-by-date, even if it was any place where the mission is to get all programs on board. This pro- might interest the produce still good. We wanted to recover help people having a hard time gram started in the West and is industry? those products. making ends meet. going east, and so goes produce. Davis: Our goal is to continue to The working poor might come to Slowly, the programs are growing grow this program. As an organiza- PB: How are standards deter- a food pantry at the end of the the produce portion. tion, this is only a small fraction of mined and maintained for this month. Maybe it is someone who Early on, people weren’t sure what we do at Feeding America on program? had to pay a large hospital bill and what produce would be available, the produce side. Produce is a huge Davis: We went to the Conference couldn’t afford food. They pick up a and when they started to see the initiative for us going forward.

32 PRODUCE BUSINESS • MAY 2012 PDP has been embraced by associates, the each place, while adjusting to variances on a select suppliers in exchange for guaranteeing community and management, she continues, store-by-store basis. That really has come about quality promotion and merchandising of their noting that the total amount of food donated because of the belief and the dedication of our brands, he explains. In turn, Kroger donates through the program in Colorado translates to own store associates and store managers.” that equivalent amount of money to local food 3,550 meals a day. “Many people can’t afford Charitable programs envelop the Kroger banks in the communities that Kroger operates, fresh produce. While the donated items may culture, according to Bill Dankworth, vice pres- while Feeding America also gets a portion. not be to the standards we sell, they are still ident of grocery merchandising, and point Since its launch seven years ago, the size of edible, nutritious, good quality fruits and veg- person for Bringing Hope to the Table, an the program and amount of money donated etables,” she says. annual merchandising-driven program that has stayed constant — $4 million cash value, Adds Marmer: “We knew it was going to be gives back to charity. Essentially, the way Bring- or $3 million in cash each year and $1 million a powerful combination; it was just getting it ing Hope to the Table works is that Kroger in product. right so we could have it run on auto pilot in collects money earmarked in trade funds from “We select 30 suppliers, not because we don’t want the additional dollars, but we could not give quality merchandising if the space got too crowded. Also, since it is a merchandising event, we have to focus on items most relevant for our customers,” he says, adding, “We’re doing this for an altruistic reason, so look for ways to make it a better program.” A new door may open for produce com- panies. “Bringing Hope to the Table is almost 100 percent grocery right now, but we encourage the idea of extending it to perish- able categories like produce, meat and deli because these are areas of the store not used yet,” says Dankworth. “We would love to have produce companies participate and get our store counterparts involved.” It’s much easier to do a UPC-coded product than it is to do a stalk of romaine let- tuce, he points out, but there are plenty of UPC-coded items now in the produce depart- ment, including bagged salads and dried fruits and nuts that are incredibly nutritious. “Food is a point of entry for providing hope to people who have lost jobs or are struggling,” Dankworth continues. “First of all, we have to take care of people nutritionally and start to move them into more paths of self reliance. And because we’re a food company, that fits very nicely with our core business and our mis- sion to fight hunger in America as our Number One charitable platform.” At the corporate level, Kroger champions three major causes: Hunger — Bringing Hope to the Table; Breast Cancer — Giving Hope a Hand; and this year, it has added a new part- nership to support the fundraising of USO’s — Honor our Heroes. According to Ausdenmoore, while these are national priorities, the execution still happens at the local level. That money is actually allo- cated out to the divisions, so when a check is issued from the Kroger Foundation, it is going to a King Soopers, for example, and the local divisions drive how these funds are allocated. The same thing applies to Kroger’s disaster- relief efforts. In fact, during an early March visit by PRODUCE BUSINESS editorial staff to Cincin-

34 PRODUCE BUSINESS • MAY 2012

At Kroger’s Harper’s Point store, the focus on perishables and produce is strong among the associates who represent the pulse of the community. Pictured from left to right are: Peggy Jones, salad bar manager; Terry Coughlin, store manager; Kayla Hall, nutrition associate, Alex Crocker-Lakness, produce associate; Ruth Krekeler, salad bar associate; Lucie Walker, produce manager; Phally Chen, assistant produce manager; and Tim Stullenberger, produce associate.

PHOTO BY MARTY WHITACRE

nati, Kroger was dealing with the aftermath of several tornadoes that had touched down in the Greater Cincinnati area. According to director of external corporate communications, Keith Dailey, teams were put into place to evaluate community needs and work to provide non- perishable donations to victims. All divisions offer grassroots fundraising opportunities. Kroger empowers its customers to choose where the money will go, allowing a percentage of their grocery spending to be credited toward organizations tied to their inter- ests. “It’s all returned to local communities, elementary schools, food pantries, girl scouts, soccer teams, and it’s very meaningful,” says Ausdenmoore. Overall, these efforts raise about $40 million annually. Locally Grown In addition to reaching out to local charities to support Kroger’s many communities, the corporation also sees its engagement with local farmers as part of its sustainability mission. “We’re all touching sustainability these days,” says Carl York, public affairs leader for the Mid-Atlantic marketing area, which com- prises all Kroger stores primarily in North Carolina, parts of South Carolina and West Vir- ginia. “The whole locally grown business for us is about supporting farmers and helping neigh- bors, especially in a tough economy.” “Promoting local resonates well with our customers, builds loyalty and we get the added bump of sustaining the community,” he says. “How great it is for our own associ- ates, who are so proud that we carry local products? There is something magical about that kind of involvement. Sometimes that gets overlooked,” he continues. “Produce is our crown jewel, and nothing says fresh better than local produce. At the same time, we’re not interested in partnering just to partner. It has to be great quality at a great price, and we make sure product is within a certain area, tells a story and is mean- ingful to the shopper. After all, in our business

36 PRODUCE BUSINESS • MAY 2012 it comes down to what sells,” he says, noting customer anticipation each year in Virginia during the holidays, when families come to Kroger to pick out their locally grown Christmas trees from eye-catching displays. “Virginia cus- tomers remember that.” “When we do customer surveys, we get high marks for buying local,” says Gary Hud- dleston, public affairs leader in Dallas, TX, for Kroger’s Southwest marketing area, including Texas and Louisiana. “Our customers embrace it and realize product is fresher because it gets to the store quicker and should improve the price as well,” he contends. “Especially for a large company like Kroger, we make sure that we’re more local- ized in the community,” Huddleston says, noting that partnering with state agriculture departments on promotional programs is a great way for Kroger to show that it supports local growers and farmers. In Texas, for example, “we have a relation- ship with Texas Department of Agriculture Commissioner Todd Staples, who has a staff that travels the state visiting retailers encourag- ing them to buy Texas produce and then providing marketing materials, camera-ready art and logos,” he explains. Kroger obliges, fill- ing shelves with Texas produce based on availability, including grapefruit, cantaloupe, onions, mushrooms and blueberries, he says, pointing out that the Buy Texas program has expanded dramatically throughout the state, in no small part due to Kroger’s participation. “Our customers love local and we love local, but it’s a challenge when you operate hundreds of stores to make sure that you’ve got all the systems and the execution right,” says Marmer. Kroger capitalizes on balancing centralized pro- curement while enabling both store-level and regional buying. “Store-level buying does exist; it’s just not something that can be done in isolation,” she emphasizes. “We’ve got expert merchandisers in local markets, who are able to say, ‘Hey, there’s a great beet farmer here,’ or ‘This local tomato grower will have enough supply.’” In some instances, Kroger collaborates with farmers to build a program, which could involve training on growing practices and help in meet- ing the food safety prerequisites and certifications. Regardless of size or circum- stances, “you can’t be exempted from any food safety requirements,” Marmer emphasizes. Consumers clamor for Olathe corn from Col- orado. “We work with those suppliers and do our best to try to have enough Olathe corn to sell not only inside of Colorado, but also in other markets,” she says.

38 PRODUCE BUSINESS • MAY 2012 Kroger’s store associates were recently joined by energy, engineering and operations executives to showcase environmental and sustainability measures as well as perishables department accomplishments at the Loveland store. From left to right are: Bill Hunt, assistant customer service manager; Cathy Hignite, floral manager; Kathleen Armstrong; Starbucks manager; Denis George, energy manager; Tanya Wilhite, store management; Jason Hensley, produce manager; Keith Oliver, VP facility engineering; Micky Beagle, deli manager, Karen Jones, deli clerk; Carl Bosse, retail operations; Lori Jones, associate produce manager.

PHOTO BY MARTY WHITACRE Companies have created all kinds of defi- ple is the Cultural Council. A diverse group of to be made in the backroom of a store to deter- nitions for what constitutes “local,” yet Kroger employees representing different positions mine whether a product can be donated or is less preoccupied with a standardized defi- and aspects of the company come together composted. The trick about composting, nition, but rather appealing to its customers’ and act as a sounding board for what’s going Marmer continues, is putting it in the context expectations, which differ based on geogra- on and provide feedback, direction and guid- of the whole supply chain, separating out the phy and demographics, according to Nate ance. From senior executives to compostable from the non-compostable, and Shepley-Streed, who was recently promoted merchandisers to entry-level employees, the who has the infrastructure to take that and do to a sustainability-specific role, working to membership rotates to stimulate varied view- something with it. ensure that Kroger’s Corporate Brand initia- points and provides a really great leadership “Actually, we’re going to try and pilot com- tives are in alignment with Kroger’s larger opportunity, explains Ausdenmoore. posting in every division and see where it sustainability commitments. (In Kroger’s jour- makes the most sense to scale it down across ney to build its sustainability platform and Beyond Charity multiple stores,” says Streed. Much depends accelerate progress, the company also Marmer points out that beyond PDP’s on finding local composting companies that recently named Susanne Lindsay as its first humanitarian attributes, the program also saves can take that on, assessing transportation miles director of sustainability.) $1.2 million in waste expense by not throwing and fees and where it makes the most finan- Kroger fosters an environment where its away edible product. In efforts to reduce waste, cial sense, he adds. associates feel part of the process and that Kroger walks the line on what’s desirable with “Discussing labor issues [and their relation- their input is valued. A quintessential exam- what’s feasible. In many cases, a decision has ship to the subject of composting], we came up

40 PRODUCE BUSINESS • MAY 2012 Taking it to the Store... Where Actions Speak Louder Than Words Visiting Kroger’s Cincinnati, OH, headquar- tainability manager for Kroger’s retail operations. to 106,000-square-feet, the largest conventional ters, one might expect this mammoth supermarket He, along with Keith Oliver, vice president of facil- store we have in the enterprise,”he says. Employ- conglomerate to brandish an attention-wielding ity engineering, and Denis George, energy ees mirror the multi-ethnic and religious makeup flagship store with an engraved plaque indicating it manager, were on the scene during a trip to of the community.“They speak the languages and is a Leadership in Energy and Environmental Kroger’sHarper’sPoint and Loveland stores in the live the cultures, helping me to better understand Design (LEED)-certified store. But that wouldn’t suburbs of Cincinnati to highlight accomplish- our customers,” says Coughlin, noting a vibrant fit in the spirit of Kroger’sphilosophy to sustainable ments and share innovative on-going research to Jewish community and pointing out that one of development. The firm actually takes a decidedly increase efficiencies. the largest Catholic churches graces the neigh- unpretentious approach, coming at sustainability Kroger’sengineering, logistical and technology- borhood. “We also have a sizable population of from the social side, a community-centric, char- savvy feats underlie a broader sustainability policy Asians and Middle Eastern customers as well as a ity-rich platform at the core. and guiding principle intimately tied to the com- pocket of Russian immigrants. We have a pulse on It’snot that Kroger rejects LEED attributes — munities it serves. the community.” many of its stores incorporate sophisticated initia- “This year, we are elevating the engagement That pulse can be felt shaking up a robust pro- tives that exceed the LEED checklist. In fact, of our division, embracing our customers and duce department, where customized product Kroger has many multifaceted, yet targeted strate- associates,”saysTerry Coughlin, store manager of selection, promotions and merchandising tap into gies to reduce energy and carbon footprint, slash the Harper’s Point store, in Montgomery, OH. community needs. “We’re on an ‘Extreme Pro- waste, and switch to eco-friendly products, “Two years ago, Kroger razed and rebuilt the gram.’ Whatever items are available, we’ll order,” explains Carl Bosse, expense, sanitation and sus- Harper’s Point location, doubling square footage says Coughlin, adding,“The focus is perishables, a with the three-second rule,” says Ted Julian, composting, it doesn’t make sense. tainability has become a buzzword tagged on senior manager of corporate expense/sanita- It’s a mindset, he continues. “In our indus- to a title, but we’re the guys in the trenches, tion/sustainability. If it takes the associate more try, it’s pennies, not dollars, but pennies add up going to the landfills, charged with finding ways than three seconds to prepare a product for real fast extrapolating across 2,400 stores. Sus- to take costs out of the business. We’d love to

42 PRODUCE BUSINESS • MAY 2012 trend we’regoing to see escalate.” safety is paramount,” he emphasizes. “Our cus- banners for significant energy savings.“When con- “Based on customer feedback, we didn’tcarry tomers want home-grown, and there is nothing verting tracks to LED, we have to be careful we enough organic,” he explains of the dramatically fresher than that.” get it right for merchandising,” says George. LED re-merchandised produce department, where spotlights well positioned in the produce depart- dominant organic displays welcome shoppers. Environmentally Friendly ment can put the emphasis where needed, While the store’sdiverse product selection and according to Jason Hensley, produce manager of First ToReact employee enthusiasm invite community engage- the Loveland store, located in Miami Township. While Kroger runs a strong centralized pro- ment, the physical plant itself is a work in progress Other energy savers include motion sensors and curement operation, it prides itself on creating an to achieve sustainable benchmarks.“[Ample] use automated systems for turning lights on and off, infrastructure that allows flexibility at the store of skylights have become a huge deal for us,” says and re-engineered refrigeration. level to capitalize on local buying opportunities to Oliver.“Our lights will sync on and off depending Kroger’s nationwide composting initiative support grower communities while connecting to on how sunny it is outside,” adds George, noting, translates differently on a store-by-store basis. customers.“We do as much local produce and flo- “On a nice day, we don’t even need them.” “Out of 190 stores in our division, 34 are now ral as we can. I’m friends with Danny Grant of The Loveland store added solar panels last composting,” says Bosse. Extrapolating the Grant Farm and Greenhouse, located 15 minutes year. While highly efficient, George explains, they impact, the plan is to increase participation to 75 away from here [in Williamsburg, OH]. He can only account for three percent of the total energy percent of stores. If product can’tbe sold, Kroger’s get ears of corn freshly picked at 8am and deliv- usage. Solar will remain a niche investment based first priority is donating food when possible ered to the store by 2pm that day,”says Coughlin, on numerous factors, including federal and state through the Perishable Donations Partnership adding,“We’renot taking corn from the backyard; incentives. “Will we put solar in every store some (PDP), Bosse continues, and then to recycling he’s a professional farmer and the quality is out- day? Probably not,” he says. non-food products and composting. “Our goal is standing. Local product is encouraged and Other sustainability initiatives are sure bets. to help our communities and send as little product endorsed from our merchandising team, and food Kroger is transitioning to LED lighting across store to landfills as we can,” says Bosse. be doing composting everywhere, but the infra- chain in Oregon, Kroger has not found the pay- Energy Star certificate,” says Marmer. structure is not there yet.” back that it feels is necessary to justify the cost Streed adds, “In some cases, if you look at In the same way, while the firm has dabbled of LEED certification. “We’ve made a personal our EPA certificate, we would meet those in LEED-certified stores at the Fred Meyer choice as a company to more likely pursue an LEED requirements when comparing carbon

MAY 2012 • PRODUCE BUSINESS 43 Introducing Joe Miskimins, Kroger’s Vice President Of Produce And Floral In honoring Kroger for its progressive sustainability initiatives, we were captivated by Kroger’s perishable donations partnership (PDP), symbolic for many reasons: notably the company-wide engagement; the powerful impact for people in need; and the scalable nature of a community-centric program. Exploring the impact of PDP on Kroger’s produce department, we contacted Joe Miskimins, a 32-year Kroger veteran who recently replaced Reggie Griffin and now leads the company’s vision and strategy for the produce and floral departments.

CONDUCTED BY MIRA SLOTT

PRODUCE BUSINESS: Could you to withstand various elements but we’re continuing to grow. It anxious and excited to run. W e share with our readers how and hold quality longer, while depends on how sophisticated we go to stores and they want to produce is being incorporated berries and soft foods are more can get, how engaged we become help. The younger associates are into PDP? sensitive, highly perishable and go as a company, how our associates enthusiastic, and many of our Joe Miskimins: To start with, bad quickly. — I call them ambassadors — help long-term associates know PDP is a great program. Our first Much depends on how sophis- build the program. we’ve been getting rid of food for inclination is that we want to sell ticated the food bank and From an operational strength years and now we can use it to product. If that doesn’t work, it warehouse operations are; how basis, we have a conditioning pro- feed the hungry. It gives people goes to those in need through PDP, far away is it, and whether they gram and culling program to such an important cause to rally a critical and far-reaching social have proper trucking, logistics make sure we’re offering the best behind. cause. If someone can use it to and refrigeration. products to our consumer, or help stave off hunger, we feel good they are pulled off and put in a PB: In a broader sense, a reoc- about that. PB: Does Kroger work with markdown program or in a differ- curring theme throughout our food banks and other charita- ent bin for PDP. visit to Kroger was the concept PB: What challenges partic- ble organizations that are not of community engagement, ular to produce do you face in set up properly to handle pro- PB: Does composting play a both internally and within the executing the program? duce donations? How does role here as well? markets you serve. How does Miskimins: It’sbest to look at the Kroger handle issues of food Miskimins: The composting is this mantra relate to produce? logistics piece of that as both a safety? Could you elaborate on not done straight through pro- Could you comment on sus- challenge and opportunity for us. how a program of this scale duce; it’s something we are doing tainability programs such as Produce is a highly perishable and magnitude becomes in some divisions and testing. zero waste initiatives in the product, but if there’s a food bank implemented across so many Much depends on the capacity of context of produce? right down the road and good banners covering such a the community we’re in. In Miskimins: Engagement is logistics, we can make it happen. diverse nationwide landscape? California, there are important. You don’t move In the same way, if the distance to Miskimins: In many ways, it plenty of places to an organization like this the food bank, church or other comes down to the individual compost, and com- without engaging your charitable organization presents store. There are pockets of the panies that will associates or cus- obstacles or there are other oper- country where the program is take it. tomers. It must work ational issues, we need to partner more developed. We keep food It’s a new at the corporate to overcome them. safety standards a priority and process for our level and divisionally Meat you can freeze and use requirements remain uncompro- associates. Both down to the individ- another day, but you can’tdo that mised. Some success depends on composting and ual store. with produce. In many cases, per- how frequent the pickup, and the Perishable I wouldn’t use that ishable products designated for environment makes a difference. Donations Program phrasing of “zero the food bank can be shipped to For example, is the area highly are novel experiences waste.” We the warehouse. Produce, how- populated or not? for our associates, but ever, is normally picked up from ones they’re really the store and doesn’t go back to PB: How far along is the pro- the warehouse. duce portion of the Perishable The distance thing is what we Donations Partnership? Out worry about. Produce items dif- of the total 41 million pounds fer on shelf-life and levels of of food Kroger donated last perishability. Some produce cat- year through the program, egories gear themselves more what percentage of that was easily to PDP. A potato, for produce-related items? instance, has product attributes Miskimins: We have no number, Joe Miskimins

44 PRODUCE BUSINESS • MAY 2012 are not there yet. Some places in the iceberg on what local will PB: Let’s revisit the theme of also remain community-based. California are easier in regards to mean to Kroger in the future. We community engagement... We have a produce buying sustainability. There are a lot of want fresh product, and local res- you expound on this multicul- organization — Wesco Foods — programs we’re working through onates with our customers. Local tural initiative? Does this that we manage from here. Our to reduce waste. I can talk about is dear to my heart. It goes back involve customizing produce buying operation is comprised of goals and objectives in produce, to to the engagement piece. I’ve selection, merchandising and a very talented group of individ- load all trucks to full capacity. For been in Seattle for the past two marketing based on store uals. The divisions know they years we’dhave trucks half full. Be years, enjoying the local produce locations? Does the employee can call Wesco and get what sure we’re not wasteful of energy, and relishing that northwest fla- makeup match those varying they need. and increase use of Returnable vor. If you read and see what’s customer bases? We can react to local markets Plastic Containers (RPCs). RPCs going on around us, younger gen- Miskimins: We have to know very well, and Wesco is very inter- have been around for awhile, and erations want to eat healthfully, our customers in any given mar- twined to respond. If someone we’ve meddled in it a little bit. As and they connect fresh and local ket. We do a lot of consumer calls at the last minute, I have four we move forward, RPCs will be a with that. research. Diversity is very true. It’s loads that just came in, we can stronger initiative. hitting right in my sweet spot say- react to that, and take advantage PB: Do you face unique issues ing multicultural. We have of local deals and market shifts if PB: How and why? What when procuring local pro- different educational programs, we choose. percentage of produce is duce? For example, is it more but most times associates know shipped via RPCs? Are you complex to ensure food safety their customers, what they buy PB: I understand you have a considering using RPCs on the controls? Do you partner with year in and year out. Our job is floral background. Would you retail floor? local farmers to create special making sure we get the right prod- like to comment about floral Miskimins: We’re looking at deals, etc.? uct selection at the right times and and its sustainability efforts, options of merchandising with Miskimins: Food safety is always at the right price. recycling, etc.? RPCs in stores. We have several an issue with local farmers. We Miskimins: Our floral initiatives pilots going on, along with refriger- need to get boots on the ground to PB: Kroger is a huge corpora- are in line with produce opera- ated cases. We’retesting it. We ship determine specs, packing options, tion. Often, independent tions. Whether it’s recycling roughly 18 to 19 percent of produce how much they can supply, etc. stores contrast their cus- buckets or composting, we’re tak- in RPCs currently. Obviously, we’re Maybe they can supply 30 stores tomization and flexibility to ing the same avenues in floral as in talking about eliminating cardboard in Dayton, Ohio, or Nashville, big conglomerates mired in produce. Our floral group attends waste. It’sa returnable container,so Tennessee, and it means us giving layers of bureaucracy and the same meetings. Sustainability there are a lot of advantages from a them solid commitments. centralized, cookie-cutter strategies are aligned, staying true social aspect. Also, our goal is deliv- buying. Kroger is a mammoth to Kroger’s core values. ering fresher product to our PB: How does organic pro- organization, yet seems to consumers and we see RPCs as a duce fit within the mix? Is have an independent store PB: What most inspires you tool in that mission. there an initiative in Kroger’s mentality in many ways. about Kroger and the pro- produce department to Miskimins: I’vebeen in this com- duce department in the PB: How important is increase organic SKUs? pany 32 years, and I can attest to context of future sustainabil- locally grown produce and Miskimins: I can tell you organic the fact that most stores are ity goals? Do you have any how is the concept of local is extremely important. Are we viewed as individual units because insight you could provide being pursued within the growing organic? The answer is, the consumer looks at their store industry executives as Kroger produce department? What absolutely. One initiative is to as a local store. They don’t see a looks to reach new plateaus are some of the key chal- continue to boost the category. big corporation. Each of our indi- in sustainability? lenges and opportunities in It’sone of the fastest growing cat- vidual stores helps meet the needs Miskimins: I would tell you for this area? Do you have any egories in the produce in that area, but as a big company, me, it’s the people that bring me vignettes that you could department. We need to con- we have to be sure we’re leverag- back. I wake up and want to share with our readers about tinue to look at individual stores ing that. come to work. To be in the pro- your experiences with local and expand varieties. Increasing duce arena and experience the farmers? SKUs is part of our objective to PB: By leveraging, are you change of seasons, the colors, the Miskimins: Local is huge. I’ll tell grow the organic selection we saying that Kroger can capi- challenges of the perishability you that. Consumers are asking offer our consumers. talize on the benefits that a side, it really motivates me. I love for it and our job is always to I would tell you if we have eight large, sophisticated buying to go to the stores and talk to react to consumers. We’re iden- or 12 feet of organic in a store, organization can realize, such produce managers and floral tifying more farmers and we’ll probably have 20 feet in the as economies of scale, a managers. That’s where I learn suppliers. We try to partner with future. We’re going to be an wider supplier base, financial things. They’re telling me what states; Michigan for blueberries, organic destination. We’re still resources for research stud- the customers want, and it is Olathe corn is a big deal for us, going to highlight conventional and ies, etc.? constantly evolving and chang- Vidalia onions out of Georgia, to build our multicultural initiative Miskimins: We do have the ing. We are driven on data, but name a few. moving forward. You have to best of both worlds being able to we have to remember to listen to We feel we’re only at the tip of serve the communities. do some things with scale and the customer.

MAY 2012 • PRODUCE BUSINESS 45 Kroger’s Harper’s Point produce department offers customized product selection, promotions and merchandising that tap into its community needs.

PHOTO BY MARTY WHITACRE footprint and water usage, but Kroger sacri- much more efficient, but we think that every- niques and increased sales of reusable bags, fices the marketing image that accompanies day deliveries are the right answer.” Kroger saved more than 159 million plastic that LEED aura.” It isn’t hard to get people excited about bags, more than 35 percent of the way to its Some things make sense everywhere with working on sustainability projects; even the guy goal of saving a billion bags by 2014. new technologies, such as installing LED lights. on the forklift feels invested. “And Kroger • With a collective transportation fleet log- “If you have a capital budget that’s a very large employees are not shy about holding us ging in over 295 million miles from distribution one, as we do, that budget has competition for accountable on sustainability,” says Winkel. centers to stores, Kroger improved its fleet effi- new stores, technology, all kinds of things, Turning to the company’s annual sustain- ciency by 8 percent in 2010, compared to including more sustainable or alternative ability report, David Dillon, chairman and CEO, 2009. (Its goal is to improve fleet efficiency by energy sources, so you have to pick and touts some astronomical energy and waste- 40 percent by 2012.) choose,” Marmer reasons. reduction figures and lofty goals: Kroger is no shrinking violet on business- “We shouldn’t be the tail wagging the dog,” • Since 2000, the company has reduced savvy strategies, and executives are well aware says John Winkels, senior director of logistics overall energy consumption by 30 percent. of the dramatic cost savings sustainability engineering and network strategy, emphasizing • In 2010, Kroger stores and manufactur- measures can generate. For Kroger, those the need to step out of your silo and think about ing and distribution facilities recycled more numbers are at times mind-boggling. Weighing the whole picture. “There’s often a healthy ten- than 1.2 billion pounds of corrugated card- costs/benefits, Kroger’s priorities will always sion when weighing the alternatives. For board and paper. remain true to its founding principles, grounded example, deliveries every other day might be • In 2010, through better bagging tech- in social sustainability. pb

46 PRODUCE BUSINESS • MAY 2012