Associated Food Dealers BULK RATE 18470 W. 10 Mile Rd. U.S. Postage Southfield, Ml 48075 ASSOCIATED FOOD DEALERS OF PAID Permit No. 36 Address Correction Requested Detroit, Ml and its affiliate: _____ PACKAGE LIQUOR DEALERS ASSOCIATION FOOD & BEVERAGE REPORT

VO L 9. NO. 4 An official publication of the Associated Food Dealers of Michigan and its affiliate, Package Liquor Dealers Association Inside m Costco comes to Foodland, Term limits - they change the way government SUPERVALU split works page 3 Detroit by Michele MacWilliams Jaeggi Hillsdale Country Five locations set for April opening Independent grocers across Michigan are reeling from makes fresh the news that their supplier, Foodland, will no longer cheese daily • page 9 service them. In a surprise announcement, Foodland gave word to Meet AFD’s new officers their employees and customers in March, leaving little • page 16 time for planning. Foodland was owned jointly by Kroger and SUPERVALU. The two companies have Rep. Callahan supports parted ways, and SUPERVALU will go after Foodland's small business • page 35 independent retail business on its own. According to sources, the Foodland Livonia facility will continue to AFD on the Scene service Kroger and Kessel as a distribution center only, page39 by Michele MacWilliams not as a warehouse. SUPERVALU will not use the Costco has chosen to take a big step into uncharted facility. Legislative Update territory in the Midwest by opening five new stores in the Grocers who used Foodland as their wholesaler are Detroit area, all in one fell swoop. It is an unprecedented rushing to form buying groups, in hopes of securing step for the company, which operates 286 warehouse- competitive prices from whichever wholesaler they Court grants style stores in the U.S., Canada, Mexico,the UK, Korea choose. and Taiwan. Most of the U.S. Costco warehouses stretch Independent grocers are now looking at other stay request: along the East and West coasts. Two years ago Costco wholesale companies. Those mentioned as contenders to Blocks OSHA entered Atlanta and is now penetrating the Midwest with take a good portion of Foodland’s business are Roundy' s, its Detroit openings. CCP Program SUPERVALU, Seaway, Flemings and Spartan. Midwest See Costco, page 37 Wholesale also stands to gain market share. The U.S. Court of Appeals for the D.C. D ea r Retailers, Circuit has granted a I am the owner of Medicine Chest Market and I have petition requesting the volunteered to co-chair the Associated Food Dealers trade court to stay OSHA' s show committee. I have been a trade show attendee for at least Cooperative Compliance 11 years. I attend the trade show because it’s a selling show Program (CCP) pending with great price discounts and to keep myself updated on new judicial review of the product introductions. As a business owner and co-chairman of program. Targeted this committee, I am very serious about making this trade show employers were given the lucrative fo r retailers. choice of committing to a Together with the committee and my co-chairman Rodney mandated OSHA safety George, president o f Melody Farms, we have devised an program or facing stepped- incentive program for retailer purchases. Hudson’s will be on hand raffling prizes fo r retailers that purchase product. up inspection. The Winners will have their choice o f tools, humidor, CD walkman, petitioner told the court camera, luggage bag and tote, cordless phone, portable TV or a that the program was golf bag from Dayton Hudson's. implemented in violation The goal o f our committee is to make the AFD trade show a of procedural requirements money saving venture for retailers. We feel very strongly that and that a stay was we have accomplished this goal. It is definitely worth it for you necessary to protect those to attend the show. There will be great show specials on items targeted from irreparable that you carry in your stores every day. We look forward to harm seeing you on Tuesday, April 21 from 5 pm - 10 pm and/or on The order is a Wednesday, April 22 from 1 pm - 8 pm at Burton Manor in nationwide stay of the Livonia. OSHA "Instruction" Sincerely, F red D ally Look for Trade Show Specials, listed inside, beginning see OSHA. page 40 Owner, Medicine Chest on page 42. The Trade Show floor plan is on page 52. Now you can talk free. EJust look inside specially marked packages of Diet Pepsi and Caffeine Free Diet Pepsi for your free MCI PrePaid Calling Card.

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AFD FOOD & BEVERAGE REPORT, APRIL 1998 Pres ident’s Message Bill Viviano, Chairman House of Prime Fred Dally, Vice Chairman Future Planning Medicine Chest Sam Dallo, Vice Chairman Legislation Term limits - A grass In ‘N' Out Foods, Region 4 Terry Farida, Vice Chairman Membership Value Center Markets Gary Davis, Treasurer Tom Davis & Sons Dairy Co. roots strategy Ronnie Jamil, Secretary Mug & Jug Liquor Store EMERITUS DIRECTORS from the Political Action AFD to be ready to move our Mark Karmo Royal Food Center Committee and another from our legislative agenda forward when Nabby Yono Board of Directors. the new freshmen legislators arrive XTRA Foods, Orchard Food Center Frank Arcori Term limits have prompted our on January 2, 1999. V.O.S. Buying Group Political Action Committee to take Term limits has also prompted Amir Al-Naimi Joy-Thrifty Scot a more direct role in getting the AFD Board into discussions Sam Yono candidates of both parties that are about becoming more directly Palace Plaza by Joseph D. Sarafa, very understanding and supportive involved in both party s political RETAIL DIRECTORS AFD President of our legislative goals, elected to structures. A more direct Jim Garmo Over the years the Associated the Michigan House and Senate. involvement can be accomplished Galaxy Foods, Region 2 Richard George Food Dealers of Michigan Board of We will continue to work with by AFD members running for Wine Barrel Plus Directors has demonstrated great these new legislators after they precinct delegate in the August 4, Raad Kathawa Ryan's Foods, Region 1 wisdom in determining how to stay take office. To do this, we will 1998 primary election. It’s very Alaa Naimi ahead of the political curve in implemement a KEY CONTACT simple to do. Thrifty Scot Supermarket Alan Stotsky Lansing for its membership. This STRATEGY involving the To become a candidate for Concord Drugs, Region 6 has been accomplished because you recruitment of one or two AFD precinct delegate either as a Thomas Welch and our directors have always Hollywood Super Markets members in each legislative Republican or Democrat in the Brian Yaldoo provided the necessary human and district to become our key contact precinct where you live, all you Woodward Long Lake Shell financial resources to move our Jerry Yono person(s). Each will be trained in need to do is file an AFFIDAVIT Cheers Party Store legislative agenda forward. developing a relationship with OF IDENTITY with the clerk of SUPPLIER DIRECTORS Now the Association is faced their targeted legislator to achieve the county, city or township in with the implementation of term Al Chittaro the goals of our association. which you are registered to vote. Faygo Corp. limits, which take effect with this The Political Action Committee All three have affidavits on file. Denny Otto election cycle. There will be over would provide training seminars, Spartan Stores, Region 3 Fill it out, have it notarized, tum it Ron Paradoski 60 new faces out of 110 members in support materials, specific in, and you’re on the 1998 August Strohs/Mooney Ice Cream the House of Representatives and Mike Rosch assignments, time frames, ballot. General Wine & Liquor Co. many new faces in the Senate after response system and develop the If elected you become part of Cal Stein the General Election in 1998. necessary data base information. the official delegation to the Sales Mark, Region 5 Barbara Weiss-Street Two strategies are emerging, one This effort in 1998 will position county convention that selects The Paddington Corporation delegates to the state convention Chris Zebari Pepsi-Cola Company (you could be one). At state conventions, candidates are AFD STAFF &, CONSULTANTS The Grocery Zone By David Coverly selected for Lt. Governor, Joseph D. Sarafa President and Publisher Secretary of State, Attorney General and all state board races. Judy Shaba S ervices Issues developed at county Daniel Reeves conventions are also presented at Deputy Director Cheryl Twigg state conventions. In presidential Office Manager election years, state delegates Elizabeth Arbus Executive Assistant select delegates to the national Sylvia Youhana convention. Both political parties Receptionist Danielle MacDonald at the county and state offices have Trade Show complete precinct delegate Sabah Brikho Membership Sales information booklets. Harley Davis Over the decades, as AFD has C oupons become politically mature, it Ruel Williams Community Relations makes a lot of sense to take the Ray Amyot next step of formal member Advertising Tom Amyot involvement in the political party Special Events and Advertising structure of both major parties. Karoub Associates Legislative Consultant If you currently have a Gadaleto & Ramsby relationship with an elected state Health Care James Bellanca Jr. official, or if you would like to run Bellanca, Beattie & DeLisle Legal Counsel as a precinct delegate, or would be Jerry Urchek willing to become part of AFD's Michele MacWilliams grassroots political activities, Metro Media Associates, Inc. please contact Dan Reeves at Public Relations, AFD Food & Beverage Report Editor AFD, (248) 557-9600.

AFD FOOD & BEVERAGE REPORT. APRIL. 1998 . .3 Guest Editorial Calendar April 21-22 Racing into Profits Behind the consolidation AFD Annual Trade Show Burton Manor, Livonia (248)557-9600 May 3-6 trend: Implications for The 1998 FMI Show Supermarket Industry Convention & Educational Exposition McCormick Place, , III. family businesses (202) 452-8444 June 6-9 FMI Annual Produce Conference Palm Springs, CA by Robert Kleinian, Ph.D. trend. Montgomery Securities The reigning king of (202) 452-8444 Oakland University calculates that investors have consolidators is H. Wayne In recent years many family bought more than $9 billion worth Huizenga. Huizenga started his June 7-11 businesses have been acquired by of stock in consolidators since empire by consolidating Store Operations, consolidators, companies that 1994. an EMI Course Western Michigan University. build their businesses by acquiring Technology can provide chains other companies. Consolidators Kalamazoo, Ml of companies a competitive (202)452-8444 have swept through many sectors advantage because chains can Consolidators of the economy, but tend to target afford to invest in the new pursue June 23-25 International Category highly fragmented industries. equipment that is too expensive for Management Conference Companies in industries individual operators. Technology transactions in dominated by mostly small, Sao Paulo, Brazil makes it possible to eliminate growing but (202) 452-8444 family-run concerns such as layers of regional managers that September 9-10 medicine, specialty retailing and were once needed to supervise a fragmented Loyalty Marketing Seminar far-flung business. As a result, it Three major factors industries with Chicago, IL now makes good business sense to no clear market (202) 452-8444 contribute to the build chains in industries that trend in previously could operate more leader. efficiently as independent entities. Statement of Ownership consolidations: Consolidators pursue independent garbage businesses to The AFD Food & Beverage Report demographics, the transactions in growing but create Waste Management Inc., (USPS 082-970: ISSN 0894-3567) is fragmented industries with no the nation’s biggest refuse published monthly by the Associated clear market leader and that will Food Dealers of Michigan at 18470 stock market and company. He then went on to turn W. 10 Mile, Southfield, Ml 48075. benefit from economies of scale. Blockbuster into the nation’s No. 1 Material contained within The AFD technology. Within such industries, Food & Beverage Report may not be video chain through acquisitions reproduced without written permission consolidators tend to focus on the of smaller video concerns and from the AFD. trash disposal are most likely to be acquisition of business and acquired. rapid expansion. Now as The opinions expressed in this maga­ consumer products and services chairman of Republic Industries zine are not necessarily those of the Three major factors contribute companies having some or all of AFD, its Board of Directors, staff or Inc., Huizenga is purchasing members. Bylined articles reflect the to the trend in consolidations: the following characteristics: demographics, the stock market family-owned car dealerships, opinions of the writer. • stable cash flows and with more than 200 transactions and technology. recurring revenue streams from POSTMASTER: Send address The impending retirement of the completed so far. changes to AFD Food & Beverage long-term customer relationships, These transactions take two Report, 18470 W. 10 Mile, Southfield, post World War II business • low product obsolescence, Ml 48075. generation is perhaps the most basic forms: the roll-up and the • long-term growth prospects leveraged buildup. In a roll-up, a ADVERTISERS: For information on significant demographic factor for products and services offered, advertising rates and data, call AFD. affecting today’s family group of investors forms a shell Ray Amyot, 18470 W. 10 Mile, South- • a strong customer franchise, company and undertakes an initial field, Ml 48075, (248) 557-9600 or businesses. This generation • an experienced management (517) 386-9666. launched many of today’s public offering to buy up a number team, of independent, privately owned AFD works closely with the following successful family businesses. • favorable demographic trends associations: Subsequently, more family firms in a fragmented industry. within the local markets serviced, For some family-owned enterprises face succession now • an under-penetrated market businesses, selling to a roll-up and more wealth will be for products or services. company in exchange for stock is transferred now than at any other a way to get a better price for their time in the history of the United On the other hand, creative enterprise and to avoid paying National Association States. However, many of these businesses such as advertising of Convenience Stores firms have no heir apparent within taxes. agencies and custom home­ Companies acquiring small the family and as a result are builders’ companies as well as businesses as part of a roll-up considering selling out to businesses that depend on the strategy often can afford to pay consolidators. professional skills of their owners higher prices than other possible The stock market run-up of the do not lend themselves to being past few years is also playing a consolidated. See Consolidation Fo o d Industry A ssociation Executives crucial role in the consolidation page 40 4.....AFD FOOD & BEVERAGE REPORT, APRIL 1998 W ouldn't It B e G reat...

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FMI organizes to help members N.G.A. and F.D.I. explore alliance The National Grocers Association (NGA) and Food Distributors control EPS costs International (FDI) will continue their significant effort to combine Food Marketing Institute is launching a major initiative in 1998-to forces under a Food Industry Alliance-with an even stronger emphasis on stabilize or reduce the supermarket industry's cost of accepting joint programs and activities. electronic payments and to exploit new technology platforms that offer Over the course of the past year, NGA and FDI, along with its food more cost-efficient alternatives. service organization, the International Food Service Distributors In recent years, the number of customers who use credit or debit Association (IFDA), have been examining possible scenarios for joining cards, instead of checks or cash, to buy groceries has risen sharply, and forces. Their discussions have been led by Pat Quinn, retired president & the trend is likely to continue. At the same time, bank fees for those CEO of Spartan Stores Inc. Discussions of specific new opportunities for electronic transactions (for the supermarket industry, typically 1.1-3 joint efforts will continue over the course of the next several months. percent per transaction) have been rising - and in many cases bear little “We've gotten a lot done in the past few months," Quinn said relationship to the financial industry’s actual cost of providing the “Essentially, in this last round of meetings, we have decided that at this service. time it makes the most sense for us to look at combining things from a programmatic point of view."

Supermarket industry convention offers grocery distributors answers to tough questions The 1998 Annual Supermarket Industry Convention will offer an exhibit floor of innovations, numerous educational workshops and other networking opportunities for more than 35,000 grocery distribution executives to get answers to tough industry questions. Sponsored by Food Marketing Institute (FMI), the convention will be held May 3-6 in Chicago's McCormick Place. More than 1,300 suppliers are expected to demonstrate their latest efforts in one building, on one floor of the exhibit hall. The hall will be organized by product categories with the North Hall featuring capital goods and the South Hall featuring consumer goods. For the sixth year, the FMI convention will include the U.S. Food Export Showcase sponsored by the National Association of State Departments of Agriculture (NASDA). The Showcase will feature more than 400 companies displaying U.S. products. For more information about FMI’s Supermarket Industry Convention, contact FMI's convention department phone: (202) 452-8444 Fax: (202) 429-4519 E-mail: [email protected] website:

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AFD FOOD & BEVERAGE REPORT. APRIL 1998...... 7 News Notes ■ * Salted market to surge in ’98 AirTouch brings home top prize Americans are letting it be known: they want healthier, low-fat snacks and they want them to taste good. And, marketers are delivering-even in Wireless Week, one ol [lie most segments not traditionally viewed as healthful such as potato chips. influential wireless industry As a result, the salted snacks market is expected to gain momentum in publications, has awarded i 1998, climbing five percent to $15.9 billion-after nearly flat sales in 1997, AirTouch. AFD’s cellular according to The Market For Sailed Snacks, a report from the New York service provider, their first City-based research and consulting firm, FIND/SVP. ever annual Cellular Since the early 1990’s the industry has seen continual consolidation. Carrier Excellence Award. Exorbitant retailer shelving fees and product pricing wars have caused This recognition helps many players to retrench-or leave the market altogether. Frito-Lay now solidify AirTouch's place as controls over half of the entire salted arena, having driven three the premier provider of contenders-Eagle, Keebler, and -off the playing field completely, wireless services worldwide. on the strength of its deep pockets (from parent company PepsiCo) and Some of the criteria used lo decide innovative low-fat products. the award were vision and leadership; technological savvy; peer respect in the industry; and community service. ollowing the Awrey family tradition of using When asked to summarize the company’s formula for success, only the finesy ingredients and producing all of Sam Ginn, chairman and CEO, our products from scratch has enabled us to emphasized AirTouch's exclusive focus on wireless. “When we get satisfy Michigan's quality baked goods needs up in the morning that’s what we for over 85 years. think about.” New website links retailers to suppliers and distributors A soon-to-be-launched website will give retailers access to a wealth of product and service information from food and beverage wholesalers and suppliers. The site, called "The Food and Beverage X change." will feature a searchable database of beer, wine, liquor and other products. Subscribers will be able to enter in the brand name of a product and immediately find the nearest distributor. Retailers will then be able to link into the databases of participating distributors to check prices and place orders. Links will also be provided to supplier websites and other sites and e-mail providing timely information of value to retailers.

For m ore inform ation on M ichigan's #1 Look for one bold, new website quality bakery, call Charles Parrish at sponsored by a progressive group (800) 950-2253 or (313) 522-1100. of Michigan retailers called "Next Food and Beverage Stores" to also be a big hit. Take the opportunity to view AWREY'S both sites at the upcoming AFD Trade Show. Look for the POS America’s Hometown Bakery Systems booth #146 for all the latest information on these AWREY BAKERIES, INC. • 12301 Farmington Road • Livonia, Ml 48150 exciting new retail solutions.

© D More News Notes, page 18

8...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 Jaeggi Hillsdale Country Cheese stands alone

car. It made the trip from by Ginny Bennett to the new factory in Joe Jaeggi told me the best way Michigan an unforgettable event to get from the Detroit area to his that Seppi enjoys talking about. factory store in Reading was to Formerly a meat processing take U.S. 23 to M-12 to M-49. It plant, the building was easily was a trip back in time. If I had transformed into a cheese factory. taken the expressway it might It already had the water pumps and have been faster. However, I refrigeration necessary so Seppi wouldn't have enjoyed the trip only had to provide the cheese- nearly so much. Driving along making equipment. He began two-lane M -12 took me through redoing the building in October of charming small towns and big 1991 and finished in February of farms until I arrived at Jaeggi 1992 when the Amish fanners Hillsdale Country Cheese. When I from Reading carried the huge got to the end of the trip, the four stainless steel vats into place. comers at M-49 and Dimmers Joe Jaeggi, Sr. (Seppi) pours one of the 700 milk cans that is delivered daily. Today, 162 Amish milk farmers Road was all open land with fields from Michigan, Indiana and Ohio Trucks bring 44,000 pounds of (called Seppi, the Swiss name for that bore the last season’s short supply Jaeggi’s with the 700 10- milk to Jaeggi’s seven days a Joseph) has passed on the stubble of cornstalks. From the gallon cans of milk they receive week. Every day but Sunday the traditional cheese-making secrets fast-paced over-built urban area each day. All the Amish cows are company produces approximately he learned from his father Joseph around Detroit it seemed like a milked by hand. Not only do the 5,000 pounds of cheese. The who arrived in America from million miles away to the tiny Sunday milk delivery is kept in a Switzerland in 1928. Joseph town of Reading, which is located holding tank until Monday settled in Monroe, Wisconsin and in a large Amish settlement. although the Saturday production began making cheese. Seppi and Just a quarter mile down still has to be removed from the his brother took over the cheese Dimmers Road is the big red barn brine room, packaged and put in making business from their father that Joe Sr. (Seppi), his wife cases. On Monday they double in 1962. Seppi sold his share of the Dorothy, and son Joe, Jr. spend production to make up for time business in 1985. For a few years most of their lives in. The Jaeggi’s lost on Sunday. Most of the cheese he worked for a big Italian cheese cheese-making business is a is made for Dairy Fresh Foods, company. One day, when he was seven-day-a-week operation. Inc. of Detroit and packaged and picking up the milk on his route, "What about vacations, days off?” distributed under their label. The an Amish farmer learned of I asked. Since Joe Sr. had already remaining cheese is sold by Seppi’s cheese-making explained the cheese-making Dorothy in the retail storefront. background. The word got out and process to me. I should have Jaeggi cheese is awarded eventually the Amish farmers CHEESE understood that cheese-makers ribbons every year in the National convinced him that he should open can't take time off because they Amish farmers supply the milk, and individual state competitions. a cheese factory to process their process fresh milk and the cows they are also good customers. The colored square Muenster has milk into cheese. So, Seppi Jaeggi are milked daily. Each day the milk truck delivery won a fourth place ribbon in the moved to Michigan and began to drivers pick up cheese orders from U.S. cheese making make cheese for the Amish the farmers, written on little scraps contest, took first place at fanners. of paper, that they give to the State Fair and Seppi fondly remembers the trip Dorothy, which she fills while the second place at the from Wisconsin he made bringing truckers unload. They then take Michigan State Fair. the Amish man who was trying to the cheese back on their return Currently, a Jaeggi cheese woo him to Michigan. Seppi and trip. is entered in the Joe, Jr. and the Amish man rode When the truck arrives, the milk international contest held together in Seppi’s ’79 Trans Am. in the cans is sampled and dumped every other year in Green The collector car, like the one Burt into a vat. The contents are Bay, Wisconsin. Jaeggi Reynolds drove in the movie weighed and recorded and the cans cheese will compete with Smoky and the Bandit, attracted are steam cleaned under pressure 900 entries from 15 attention wherever it went, before being returned by conveyer countries. especially whenever the Amish belt to the truck. The milk enters Joe Jr. is the cheese farmer got out of the car. It was the system through pipes and the maker today. He is even more unusual since the day-long process begins. The fresh dedicated to making cheese Amish man put a portable CB in milk is pumped to a holding tank in the old fashioned way. the car and kept in contact with and cooled to 40° F. “Cheese making is an art, truck drivers along the way. not a science,” is the way Joe Jr. goes to bed by 7:00 p.m. Dorothy Jaeggi manages the retail/factory store at Ordinarily the Amish would spurn Joe Jr. sees it. Joe Sr. and his day begins at 2:30 a.m. Jaeggi’s Hillsdale Country Cheese "Haus. ” technology and refuse to ride in a

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 9 w hen the cooled milk is provide the cheese factory with hair with black kerchiefs and put pasteurized at about 13,000 dependable, honest and hard- on high rubber boots. They work pounds per hour. From there the working employees. The Reading in typical Amish blue dresses milk fills the huge vats where settlement of Amish won’t allow covered with an apron. cultures are added and the milk is its young women to work in the Before noon the mixture in the heated to set the right PH. Then a factory because the factory runs large vats has been cut into cubes coagulant, called rennet, is added on electricity. The Quincy with a fine wired screen. The curds which in just thirty minutes causes settlement, in the next county, separate from the whey, most of the milk to form a gelatin-like allows its young women to work which is drained off. In 30 minutes texture. for the Jaeggis. "Each settlement the m ixture is heated to 102° F and At 4:00 a.m. Seppi begins his has its own rules," says Seppi. then it is pumped to the forms. By day by picking up several young Sadly I wasn’t allowed to take a noon the vats are emptied Cheese Amish girls who work in the picture of the girls at work is molded into a roll shape, a factory. Taking this 90 mile round because of the rules. Every day "square” block or Iong-johns (a trip six days a week is time they come to work in their typical double-long square). The factory Joe Jaeggi, Jr. packs the prize-winning consuming but necessary to stiff, black bonnets, cover their Muenster squares. and all the equipment is washed down and everything is clean and ready for the process to begin again. The Jaeggi factory is kept Personnel Needed Personnel Needed immaculately clean. After the cheese is removed from the vats, a to Install THEIR to In sta ll separator is used on the remaining liquid to remove the cream from the whey. The cream is then sent to Wisconsin where it is made into rolls of outstanding Amish country butter. In two-and-a-half to three hours the curds, in their proper molds, reach the right PH and acid level. Then the cheese is transferred to the brine room where the blocks are submerged in a brine which will draw out moisture, cool the block to 45° F and make it solid. To make the Muenster the factory is known for, the cheese remains here for about 18 hours at which point a portion of the cheese blocks are colored on the outside with an “annato” dye, a natural orange-color product. Other cheese is sold in the natural white. From here the blocks are put in plastic, shrink wrapped and packed into cases for shipment to Dairy Fresh Foods, Inc. in southeast M ichigan. A relatively small portion of the cheese is sold from the cases in Dorothy’s storefront. The cheese counters at Jaeggi Hillsdale Country Cheese “Haus” also offer The Chester Fried Ventless Fryer won't a few by other manufacturers, and butter, and send you through the roof. brown eggs. She stocks Amish Your protits are the only thing that will go through the roof when you products like honey, peanut brittle, purchase the Chester Fried Total System Program for your food service caramel com and other home­ operation. You'll have no installation costs, no costly roof modifications, made candies. The store has craft no multiple vendors. And the ventiess fryer's revolutionary air filtration items and Amish cookbooks, too. system eliminates irritating smoke and grease laden vapors. The Crispy, Moisturized Chicken My trip to the cheese factory ■ Stainless Steel Construction - Removable Hood Parts - UL Listed and NSF Approved was interesting and enjoyable. To Team up with Chester Fried and the only thing that will be going through the roof are profits. see these hard working, happy Call DCI Food Equipment or Kenworth Food Equipment today for more information: people was very satisfying. It (313) 369-1666 or (800) 899-9324 satisfies the Jaeggis, too. FOOD "Everything has gone so fast in the dairy industry but we have stepped food equipment co. back and are doing fine,” says 5350 E. Davison - Detroit, Ml 48212 1200 Godfrey S.W. - Grand Rapids. Ml 49503 Seppi Jaeggi.

10....AFD FOOD & BEVERAGE REPORT, APRIL 1998

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• Over 180 exhibitors will be marking down their prices for two full days, on essential items that you carry in your stores. • New products and services will be introduced. Be the first to know what’s new in the industry. • Hudsons will be on the show floor awarding prizes for those retailers that purchase products or services. You will leave the show with your gift in hand. MARK YOUR CALENDARS: Tuesday, April 21,1998,5-10 p.m. | Wednesday, April 22,1998,1-8 p.m. Burton Manor Livonia, Michigan Booth space is still availalbe. Please call Danielle at AFD with any questions (248) 557-9600.

14...... AFD FOOD & BEVERAGE REPORT. APRIL 1998 r i Convenience Store Corner The tobacco settlement: The convenience store perspective Snack food spending up, The National Association of drastically altering the way retailers advertise, Convenience Stores is continuing display and sell tobacco products. The settlement but not at to register vocal opposition to the would require all tobacco products to be neither Tobacco Settlement, charging it is visible nor accessible to adult customers. Most convenience stores unduly burdensome on retailers convenience stores would be hard-pressed to find While Americans are spending more than ever on without addressing the real issue room to accommodate tobacco in this way and snacks, convenience food stores' share of that market of underage consumption of would either be forced to spend thousands of slipped a full percentage point, the National Association of tobacco products. dollars to remodel or lose business to others, Convenience Stores reported in its August Marketing The settlement would have a according to an NACS statement. Update. detrimental impact on the bottom “The settlement may satisfy the lawyers and The update, citing a recent Snack Food Association line of convenience stores by See Tobacco, page 40 State of the Industry Report, said we Americans each spent $ 60.42 on average in 1996 for snacks - potato, Average Sales per Convenience Store tortilla and corn chips, , meat snacks, nuts, pork 3rd quarter of 1997 rinds, and . Convenience stores are losing their ground to competitors such as mass merchandisers and warehouse Merchandise 3rd Qtr. 1997 3rd Qtr. 1996 % Change clubs. Because they charge the highest price per pound Sales—Total $235,445 $231,377 1.8% for snack foods, convenience outlets are unlikely to be Sales—Same Store 248,390 241,509 2.8 able to compete on a price basis. Instead, convenience Gross Profit 78,551 76,710 2.4 store operators may be able to promote their stores as Gross Margin Percentage 33.36% 33.15% 0.6 centers for testing and experimenting with the new snack Gasoline products so often being introduced by the industry. Gallons Sold—Total Stores 270,309 262,851 2.8 Update also reported that nationally potato chips are still Gallons Sold—Same Store 278,291 276,047 0.8 king of the snack food world, although regional Selling Price Per Gallon $1,126 $1,204 1.0 consumption varies significantly. For example, tortilla Gross Profit Per Gallon $ 0 .133 $ 0.141 -5.7 chips are more popular than potato chips in the Southwest Gross Profit $35,930 $37,165 -3.3 and Pacific Coast, and meat snacks (beef jerky) are Total consumed most on the Pacific Coast as well. Running Other Income $3,779 $3,564 6.0 second and third behind potato chips nationally are tortilla Gross Profit $106,323 $104,564 1.6 chips and pretzels.

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AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 15 AFD Elects New Officers

The Associated Food Dealers of resident of West Bloomfield and Michigan is pleased to welcome has served on the AFD Board of Bill Viviano as our new chairman Directors for 11 years. of the board of directors. He and Sam Dallo co-owner of In 'N' five other elected officers preside Out Foods in Pontiac, is the new over AFD's 27 members of the vice chairman of legislation. A board. Viviano began his career in resident o f W est Bloom field, Dallo the food industry in 1956 by formerly held the office of working at his family 's pasta secretary and has been a board business. Prince Macaroni m em ber for 10 years. Company, which his grandfather Terry Farida, owner of Value started in 1917. He became Center Markets in Warren and presiden in 1974 and sold the Livonia, was elected vice chairman company to Borden in 1987. of membership. Farida resides in Farmington Hills. He has been an Currently he is owner of House of said. "The AFD is one of the Prime, located inside Papa Joe’s strongest trade associations of its Supermarket in Rochester Hills, kind in the country and I am and he is also owner of several honored to serve my industry as other businesses and properties. the new AFD chairman.” Viviano has held several A resident of Grosse Pointe positions during his 20 years on Shores, Viviano is married, has the AFD board of directors, three children and five including most recently the office grandchildren. of vice chairman of future Fred Dally, owner of Medicine planning and prior to that, Chest in Detroit, takes Viviano’s treasurer. He is also a member of previous position as vice chairman AFD’s finance committee. He of future planning. Dally is a B ill Viviano F re d D a lly The Value Leader

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16.... AFD FOOD & BEVERAGE REPORT. APRIL 1998 AFD congratulates all its officers on their new positions.

Sam D a llo Terry Farida Gary Davis Ronnie Jamil

AFD board member for eight years and previously held the position of treasurer. Gary Davis, president o f Tom Davis & Sons Dairy Co., in Oak NeW! Park, is the new AFD treasurer. A resident o f Grosse Pointe Farms, Davis has been a board member for six years. Ronnie Jamil co-owner of Mug & welcome To Jug Liquor Store in Berkley was elected to the position o f secretary. He previously served as co-chairman of the AFD PAC. He lives in Farmington Hills and has served on the AFD board for six years. a r r o t Michigan P L o t t e r y ♦ BAY enhances PUERTO RICAN RUM WITH NATURAL terminals COCONUT FLAVOR Starting in April, Michigan ONOFF Lottery retailers will welcome an PREMISEPREMISE SHELF improved generation of on-line terminals. The new terminals, SIZE C O D E # PRICEPRICEPRICE scheduled to be installed in April and May, will provide a host o f 1.75L 9834-6 $21.15 $24.86 improvements designed to LITER 9832-6 $14.17 $14.45 $16.98 streamline lottery operations at the 750ML 9831-6 $10.84 $11.05 $12.99 more than 6,000 retailers w hich 375ML 9830-6 $6.78 $7.97 sell Michigan Lottery on-line 200ML 9829-6 $4.20 $4.94 game tickets. 50ML 8497-3 $0.82 $0.96 Terminal enhancements include: • Easier maintenance resulting in fewer "down" times • An automatic “starlet" screen which displays current jackpot Seagram Americas amounts for both Michigan Lotto and The Big Game SEAGRAM AMERICAS • NEW YORK, NY THOSE WHO APPRECIATE QUALITY ENJOY IT RESPONSIBLY Expanded memory for future use Variable-length ticket printing TO ORDER 1-888-NWS-MICH 0R 1-888-MICH-NWS • Tiltable screen More convenient validation of CALL; 697-6424 642-4697 both instant and on-line tickets

AFD FOOD & BEVERAGE REPORT. APRIL 1998...... 17 News Notes Spartan Stores, Inc. opens new Health and natural food stores rehabilitation/medical clinic outperforming the mass market Spartan Stores, Inc. has opened the West Michigan Prevention Medical/Rehabilitation Clinic, an on-site rehabilitation clinic for The health and natural store market continues to boom, far outpacing associates. The clinic is located in a 2 ,160-square-foot modular unit at the growth of the conventional grocery industry. Sales more than Spartan's 76th street complex. doubled to $11.2 billion between 1993 and 1997, according to The US. The clinic was previously located in one of Spartan’s warehouses. Health and Natural Food Store Market, a timely new report from the The new , larger facility allows for expansion of services, including New York City-based research firm. Packaged Facts. rehabilitation of musculo-skeletal and soft-tissue injuries, education and Lifestyle and demographic trends support growth on-the-job coaching, preemployment physicals, drug screen collection, Consumers are increasingly responsive to healthful lifestyles and treatment of cuts and burns, and mental health counseling. The clinic products, indicated by health club openings, “lite” foods, “spa cuisine," treats associates from Spartan's 76th street complex and three local and no-smoking rules. Consumer interest in environmental issues and subsidiaries and focuses on early intervention, prevention and education. eroding confidence in the safety of the mass-market food supply support the growth of health and natural food stores. Moreover, many health and natural food store patrons are entering the age when health and nutrition concerns become paramount. The first of the baby- boom generation, the group that "discovered” natural foods, turned age 50 in 1996. Pros and cons of mass-market poaching Many products traditionally sold in health and natural food stores are finding their way into the mass market. Crossover products often introduce mainstream shoppers to the idea of natural foods and supplements, and prompt them to seek out additional selections. On the downside, mass-market poaching can cause health and natural food retailers to lose sales on key products. Organic produce and natural supplements, in particular, are increasingly available a conventional food and drug outlets.

Aunt Mid’s products at markets & stores throughout Michigan and the Midwest: Kellogg and Pillsbury • Alfalfa Sprouts • Pea Pods - Red Potatoes receive industry • Bean Sprouts • Soup/Stew Mix • Gold Potatoes awards • Brussels Sprouts • Celery Hearts • Onions At the first-ever national • Stir Fry Vegetables • Spinach • Parsnips Summit on Food Recovery and • Baby Corn • Broccoli Florets • Turnips Gleaning in September, the • Bamboo Shoots • Cauliflower Florets • nation’s largest domestic hunger- • Water Chestnuts • Carrot Stix • Pine Nuts relief charity honored the Kellogg Company, the Pillsbury Company, • Chow Mein Noodles • Celery Stix • and Second Harvest founder John • Fortune Cookies - Hearts of Carrot - M ixed Fruit Salad Van Hengel as "Heroes of Food • Jumbo Radishes Recovery.” “The generosity and innovation Endorsed by the Henry Ford Hospital Food Systems Heart/Smart Recipes. of Kellogg and Pillsbury, as well I.F.P.A. Member in Good Standing. as the vision and commitment of John Van Hengel, are the ideals AUNT M I D 'S PRODUCE CO. we strive for in the fight against hunger," said Christine 7939 West Lafayette • Detroit, Ml 48209 • Office: 3 13-841-7 9 11 • Fax 313-841-6220 Vladimiroff, President and CEO of Proud Members— Associated Food Dealers o f Michigan Second Harvest.

18...... AFD FOOD & BEVERAGE REPORT. APRIL 1998 News Notes

Salad days to continue for precut Fight BAC! vegetable marketers Supermarket kit available The Partnership for Food Safety Education launched a national Sales of value-added produce continue their stellar rise, fueled by consumer food safety education campaign last year aimed at reducing demand for convenience as well as the desire to eat healthy and eat at foodbome illness by confronting the invisible enemy of foodborne home. As a result, more and more Americans are opting for home meal bacteria. As part of an on-going effort to promote the consumer food replacement, where value-added produce is making up a good chunk of safety messages, retailers can receive a free Fight BAC! Supermarket the meal. kit. The kit contains a consumer brochure, sample press release, sample In 1998. sales of precut vegetables will rise 19 percent to $7 billion, ad columns and radio spots, and other materials for developing your own according to The Market for Value-added Fresh Produce, a report from Fight BAC! campaign. For copies of the kit, please contact FMI’s the New York City-based marketing and research firm, FIND/SVP. The Publication Sales Department at (202) 429-8266. The campaign also uncut organics segment will grow even faster, soaring 25 percent to $1.3 features a website www.fightbac.org where consumers, health billion. Non-organic, uncut vegetables-value-added and commodity-will professionals, educators and the media can learn the latest news about top $61 billion. preventing foodbome illness.

U.S. RETAIL SALES OF FRESH PRODUCE. 1994-1998 (billions of dollars) Frito-Lay supports the Michigan Food $70 & Beverage Industry with these fine Michigan-made products. . .

$50 1994 1995 1996 1997 1 998 Source: FIND/SVP The market was divided into three distinct segments: precuts- including packaged salads and other cut vegetables and fruit; organic produce; and uncut, non- organic produce that is branded or otherwise value-added. The precut PICK salad category is dominated by four players who together held 73 percent of that market in 1996. YOUR Bruce Church of Fresh Express was the top salad producer that year, holding 31 percent of supermarket MUSIC sales. An industry ripe for consolidation DISPLAY Precuts' moderating sales point RACK to saturated market conditions: DORITOS larger players increasingly vie for position with numerous regional PROMOTION producers and also face formidable competition locally from supermarkets. Industry consolidation seems likely as the market continues to evolve. Food safety issues: the num ber one challenge Despite continued perceptions that fresh produce consumption is health-enhancing, recent outbreaks of food-borne diseases have received widespread media attention and caused consumer concerns. New packaging and Contact your Frito-Lay handling techniques continue to address the food safety challenge. A number of producers now out­ representative source processing regionally, or even locally, in order to assure for more information freshness and an “unbroken cold chain”-key to product safety.

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 19 Products

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AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 21 Crime Alert Avoiding the most common grocery store losses

Take a look at the grocery system is the best means of wet floor sign. handle the incident at the outset business today: lawsuits are in minimizing losses. Slip-and-fall accidents - outside may make or break your claim. vogue, crime rates are rising, and Slip-and-fall accident - inside In these cases, your liability C rim e regulations are becoming ever One of the most frequent may depend upon whether you Eight to ten percent o f all more numerous. There’s no doubt claims results from bodily have a lease agreement with a grocery claims are a result of that it's gotten more difficult for injuries— including injuries from property owner. Although some crime. The average claim for grocers to succeed. slip-and-fall accidents. A typical agreements don’t require burglary or robbery is $15,000 to Fortunately, there are some claim ranges from $2,300 to landlords to handle maintenance, $20,000. Fortunately, mere are a easy ways for grocers to avoid $35,000, and can easily run as many do. If the property owner is few things you can do to some costly situations. high as $250,000. liable, you have a responsibility to minimize the risk of a large loss. Fire Prevention Grapes or other dropped fruit notify him of the potential You arc especially vulnerable The biggest claims are often for create a hazard in the produce problem areas. on evenings and weekends, when fire losses, which can total department, so keep produce mats Make sure your parking lot is you have a lot of money in the millions of dollars. Prevention is clean. Service delis and freezer well lit. Paint speed bumps, store. To protect yourself, make the key. Make sure your furnaces cases should also have mats. Use curbs, islands and other raised frequent deposits-always with and boilers are properly cleaned wet floor cones and mats at store surfaces outside your store. In icy two people. Keep as little money and maintained. Keep entrances on rainy or snowy days, weather, remove as much snow as possible in the safe and cashier combustibles away from furnaces and post a wet floor sign on the and ice as possible from the tills. Separate cash from checks and generators. Electrical wiring door. parking lot and sidewalks. Don’t in the safe and place checks in a in old stores also can be a hazard, Checking floors regularly is not do a half-hearted job; half an clear plastic bag. Thieves will so be sure to have it inspected. enough. You must give effort is worse than no effort. leave the checks behind, and you Turn furnaces and appliances off customers fair warning of any If a customer falls, be will have cut your loses, at night. Avoid using extension potential hazard. Don't leave an courteous. Compile information In addition, try to greet and cords as permanent or unmarked spill unattended. An from the customer and witnesses, make eye contact with all replacement wiring. employee who discovers a spill and promptly notify your Should a fire occur, a sprinkler should have someone else get the insurance company. How you See Crime, page 42

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24...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 Industry News and Products Shearer’s Foods One-third of all new names sales manager mothers are Grandma Shearer’s Snacks has named Toledo native Bob Fagerman as their Regional Sales Manager for the Toledo area. With 32 years experience in the grocery and food retail industry, Bob’s new position unmarried will include responsibility for growth of Grandma Shearer’s Snacks in Toledo and southern Michigan. Further, he will be developing new Demographic trends fuel baby care accounts and handling category management for current accounts. For the second consecutive year. Grandma Shearer’s potato chips have products market received the gold medal award from the American Taste Institute of San Francisco for the best potato chips in America. Bob and his wife, Sue, reside in Swanton with their three children. In 1994, the number of unmarried new mothers rose to a startling one- third of all childbearing women, according to a survey cited in The Market for Baby-Care Products, a study from the research firm, Packaged Facts. More than any other consumer goods market, baby care products depend on favorable demographic trends-birth/fertility rises in Haagen-Dazs particular-for growth. In contrast to the “baby boomlet” years of the 1980s, U.S. birth rates have been dropping steadily since 1993. The baby care market reflects introduces two new this decline: 1996 sales were $5.1 billion, down 1 percent from 1995. Over the 1992-1996 period, sales fell 6.4 percent. The diaper category leads the market, with almost three-quarters of flavors total sales. Though disposable diapers are used by 94 percent of all U.S. Flaagen-Dazs has announced the addition of two new flavors in the parents, the category has been in a tailspin, falling almost 10 percent superpremium ice cream category, now available to foodservice since 1992. The decline is due not only to plunging birth rates, but to customers-Coffee Mocha Chip and Mint Chip. Coffee Mocha Chip price wars between the two major diaper competitors, Kimberly-Clark offers the robust tastes of coffee-flavored chocolate chunks and coffee- and Procter and Gamble. A number of private-label marketers have flavored ice cream, and the new white Mint Chip ice cream is a mix of further widened the playing field and narrowed margins. refreshing mint and chocolate chunks. For retailers, however, margins are not critical. A discount store executive quoted in the study says "we will discount the price down to nothing if we have to. Profit is not really the issue with baby care. It’s all about attracting more consumers to the store.’’ Indeed, statistics show that new mothers spend 35 percent more than the average customer when Food establishment shopping; and many stores will stock bulky and relatively low-margin diapers because of the new-mother traffic they generate. licenses are past due The Michigan Department of Agriculture has announced changes in the way delinquent food establishment license renewals will be handled this year. Up to 2,000 establishments fail to submit renewal fees every year, and this requires the field inspectors to drive to those locations to Legislation banning access collect the renewal applications and fees. These changes will allow the department to focus its resources on food safety issues rather than use field staff to collect delinquent license fees. fees for ATMs opposed by Food Establishment licenses for all retail food stores, warehouses, and food processors expire annually on March 31. If you have not received food industry and other your renewal application, please contact your MDA regional office. Late fees of $10 per day up to $100 will be assessed through April 10 for those licenses not renewed. After that date, a letter will be sent to business organizations delinquent licensees informing them of late fee charges and requesting In March, FMI joined 36 business organizations and corporations in submission of the renewal application and fees within 2 weeks. If no writing to all members of the Senate urging them to oppose legislation response is received, a final letter will be sent advising the licensee of the that would ban access fees for the use of Automated Teller Machines date and location scheduled for a formal license revocation hearing. (ATMs). The letter was signed by a broad range of business groups License renewals which have not been resolved by the hearing date will including banks and non-banking retail trade associations, ATM cause automatic revocation of the establishment’s license. manufacturers and vendors and ATM networks. The letter argued that A common question that comes up with establishment license fees is “any legislation that would prohibit such ATM access fees will result in whether an establishment falls in the $15 or $52 category. These fees the closure of many ATMs and severely limit future ATM deployment, depend on whether the store is over or under 1,000 square feet. In the thereby reducing ATM availability to many communities and past, the department allowed retailers to include only floor space devoted constituents and ending much of the convenience enjoyed by consumers to food sales when determining the 1,000 sq. feet. However, the today.” Sen. Alfonse D’Amato (R-NY), Banking, Housing and Urban legislative intent of the licensing law has been reviewed and the Affairs Committee chairman, introduced legislation in 1997 (S. 885) that department will now use the total square footage of the entire building would ban ATM access fees. The Senate may vote on that legislation (excluding living areas) in this determination. The lower fee was later this year. intended to be set for small “mom and pop" businesses.

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 25 Support Staff

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AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 29 Lottery News Lottery enjoys solid pace at mid-year mark

Looking A head. broken records and increases If that mark is achieved in fiscal After celebrating a banner fiscal across the board. With nearly 1998, it will mean more than $620 1997 - $1.59 billion in sales and half of fiscal 1998 behind us, the million in net revenue to support $587.7 million to the state School Lottery is poised to finish out the Michigan’s public schools. K-12. Aid Fund - the Lottery remains on remaining six months with an Six months into fiscal 1998, by Commissioner Bill Martin track to post yet another year of estimated $1.67 billion in sales. Michigan Lottery instant tickets continue their explosive growth with a 13.8-percent increase over last year’s six-month sales total. Growth of instant tickets is strong throughout the state, and they can play a crucial role in your success as a Michigan Lottery retailer. With a total of 40 new instant Detroit Sales/Service Center games to be introduced in fiscal 43442 N. I-94 Service Drive 1998, there are sure to be tickets Belleville, MI 48111 that appeal to all of your Lottery customers. Instant tickets range in price from $1 to $10. New games New and Used Equipment Sales for April include the new “Cash N' Cruises” instant game. The $3 ticket is available at ticket counters beginning April 6, and will offer more than 650 Caribbean cruises Equipment Sales: Parts/Supplies: for two. The game also offers cash

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32...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 AFD FOOD & BEVERAGE REPORT, APRILX 1998...... 33 News from Detroit Edison Introducing LightWise from Detroit Edison a professional lighting service for business customers

Looking for ways to reduce Your company’s indoor and wasting money with each monthly your energy bills? The answer current lighting situation to outdoor lighting can easily account electric bill. may be right in front of your eyes, providing expert installation for 50 percent of your electric bill. When it comes to lighting or overhead, as the case may be. services. Specifically, LightWise And although it may seem your efficiency, Detroit Edison’s If more than four to five years can help you save money, increase lights are doing their job because LightWise program is the expert. have passed since you last security, improve productivity and they come on when you flip the A comprehensive interior and reviewed your lighting system, enhance your company’s switch, (hat's not necessarily true. exterior lighting evaluation you may be missing out on the appearance. H ere's how it works: If your lights aren't operating at service, LightWise encompasses energy savings the latest products • Evaluation/Analysis their peak efficiency, you may be everything from evaluating your offer. A professional lighting auditor will conduct a comprehensive analysis of your interior and exterior lighting system. You'll receive a written proposal Nancy Kelly wants a c lo s e r lo o k detailing recommended improvement, estimated annual savings, return on your at the things in your store. investment, environmental considerations and financing options. Modern advancements in lighting can help your • Implementation customers find the products and information they You now have all the want, make fresh foods and produce more appealing, inform ation you need to make the reduce safety hazards, and make your store more right decisions on modifying your visible at night. total lighting system. Choose those recommendations you find most important to your company, Detroit Edison's lighting auditor Add a little extra profit to will be happy to help. every item on your shelves • Installation Service New fixtures, lamps and ballasts Lighting is 28 to 50 percent of your total electric costs. are installed, all old lamps and And the lighting recommendations you get through ballasts will be safely disposed of Detroit Edison’s new L ig h tw ise program will be or recycled. designed to lower these costs. So, besides helping • Maintenance Service customers find the things in your store, you’ll find a A routine maintenance schedule little something extra on your bottom line. will be established; all fixtures and lamps cleaned and relamped when necessary. • Financing Connect with Lightwise For qualified businesses, we can arrange financing for any of these 1 -888-Light-DTE services. These services can be (1-888-544-4838) billed in installments with various payment terms. • Plus We’ll arrange for a lighting survey of all or any part of your store’s indoor and outdoor facilities. Then we’ll make specific You can apply the entire cost of recommendations to increase your lighting efficiency - and deduct your audit as a credit toward the any survey fee from the cost of installations you choose to have us purchase and installment of perform. We can even help with financing. recommended improvements. Ask for details. Find big savings by having Detroit Edison take a closer look at your Whether you're looking to store’s lighting. Call for a L ig h tw is e survey today. improve lighting for appearance, productivity, security or savings. www.detroitedison.com Detroit Edison offers smart, effective energy solutions that Detroit Edison directly improve your business’ bottom line. Get LightWise today by calling 1-888-LIGHT-DTE (1-888-544-4838). For more information visit our web site at http://www.detroitedison.com.

34...... AFD FOOD & BEVERAGE REPORT. APRIL 1998 Legislator Profile Representative William Callahan brings small business to big government

by Kathy Blake bills that were signed. The first William Callahan is a Democrat was Public Act 3 which redefines freshman state representative who the set of regulations under which believes that government should combined sewer operations be run like a small business. “I'm (CSOs) are operated and tested, very partial to small business,” especially after a basin overflow. said Callahan who has owned his “It is well known that CSOs are own small construction company the biggest problems in beach for 23 years. “The large corporate closings and polluted rivers and executive is always spending streams,” said Callahan. The someone else’s money. The small second was Public Act 4 which business owner only spends his requires removing the connection own money,” says Callahan. between gutters and weeping tiles ‘When you’re spending your own by inserting an elbow piece of money, you tend to be a little more guttering to divert drainage onto frugal.” yards to allow rainwater to drain Callahan represents the 26th onto grass instead of entering the district in southeast Macomb sewer system. Residents have one county including Harrison year to comply and commercial Township and St. Clair Shores. used to its highest and best use,” drag of St. Clair Shores to raise and industrial businesses have five Callahan grew up in St. Clair Callahan explained. St. Clair money for Hospice children. years. Other issues in the works Shores and graduated from South Shores’ 11 square miles of surface Callahan owns two old cars are bills changing the way septic Lake High School. He served on actually includes 15 miles of shore himself, a 1930 Model A and a fields are regulated and putting a the St. Clair Shores city council line counting the inlets and points. 1957 Ford. cap on agricultural runoff from for 13 years and was m ayor in Establishing the Nautical Mile, a Callahan started college pesticides and fertilizers, 1995. W hen he joined the council, strip of Jefferson Avenue with 17 majoring in pharmacy but found determining who is part of the Callahan said the state was ready restaurants accessible by boat or chemistry was not his strong suit problem and what percentage to take receivership o f the city. by car, was one method of and the construction business they’ll pay, says Callahan. The city was in financial hardship utilizing shoreline and bringing in suited him better. He started his Representative Callahan is vice- and candidates were running on revenue. St. Clair Shores is 83 own business doing mostly repair chair of the forestry and mineral platforms of solving the economic percent residential which leaves and restoration for lower-end rights committee. His main problems. Some candidates little room for business activities. residential and light industrial concern is with slant drilling. suggested selling parks. Callahan With less than two percent structures. He is also a realtor and "Because of advancements in viewed that as radical and laid out industrial, the community relies expert witness for evaluating the technology, it’s a whole new plans to run the city from more of mostly on retail businesses for tax quality of new construction work science affecting ownership of a business approach. "Several of revenue. A bedroom community and determining seller disclosure mineral rights,” says Callahan. Oil us elected in 1983 wanted to run that developed overnight in the liability. Callahan says he has a and gas can be drilled out from the government more like a ’60s, the city has maintained its personal policy of not entering into under adjoining property with business. We managed to keep the suburb plan and has kept its a job opportunity from a court case slant drilling without the owner's infrastructure together keeping all commitment to leisure activities in which he testified. knowledge. “There is a need for jobs in place and eliminated a $5 for the shores of Lake St. Clair. As for his construction business, legislation and ethics to protect million deficit.” Today the city Callahan became actively Callahan has allowed his hands-on and compensate property owners,” has met its scheduled bond payoffs involved with city government involvement to slip away now that he adds. and oddly enough, one of the during his council terms. He was he is busy with state matters. He He is currently assigned to four main money makers is the golf on the Planning Commission, the decided to run for state other committees: Local park that was nearly sold to bale TIFA board, the Economic representative when incumbent Government, Corrections. the city out. Development Commission and Tracey Yokich stepped down to Commerce and Labor and The council created a local Tax was the chairman of the General run unsuccessfully for judge. Occupational Safety. On the Increment Finance Authority Employees Pension Board. He is a Callahan is very concerned with corrections committee, Callahan (TIFA) which assisted several former secretary of the Kiwanis water quality issues coming from a says that many recalcitrant business owners in moving into Club of which his signature project district with water problems. As individuals suffer some sort of underutilized areas of waterfront. was the establishment of cruise vice-chair of the conservation, We increased our commercial night for two miles of the main environment and recreation See Callahan, page 36 district to make sure it was being committee, he has introduced two AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 35 C allah a n Representative Callahan owns continued from page 35 120 acres of property near The millennium bug Traverse City, with two partners. mental illness. "Much mental They have an arrangement with a would evolve over the next illness is treatable, but they're not Cub Scout troop north of Grand forty or fifty years, and that being treated, they're Rapids. The scouts camp out on the two-digit designation incarcerated,” he explains. the property and help plant 500- eventually would be On the commerce committee, 1000 trees each year. Callahan replaced. the recent focus has been on enjoys snowmobiling on the Computer language did "performing rights societies” property and just being outdoors evolve! But the two-digit copyright protection of musicians. and observing wildlife. He says designations came right Bars and other establishments that each time he goes “up north” he along with it. Net result, unless The “Millennium Bug” is the play music without paying sees more development. “Because we catch up with the Millennium phenomenon that the great royalties are being sued by the of the building boom, we lose 10 Bug pretty quickly, when the majority of computers are societies that license the artists. acres per hour to development," he calendar flicks over at midnight on incapable of recognizing any date Callahan believes the societies are says. December 3 1, 1999, and we make past December 3 1, 1999. Too few charging too much and not giving Callahan is finding that there is an entry for January 2000. our retailers seem to be concerned accountabilit\ to establishments. a lot to learn at the Capitol. computers will read this as January about it and it's som ething Callahan helped write House Bill Regarding the new term limits, he 1, 1900— and if appropriate, everyone in business should be 5576 that would regulate says, "the learning curve is so charge us interest for a hundred very concerned about. relationships between performing detailed that six years just isn't years! To review the history, in the rights societies such as the enough. It should be extended to You may regard all this as a Fifties when computer use was just American Society of Composers, 12 years.” He plans to continue to passingly interesting situation getting of the ground, Authors and Publishers (ASCAP) keep his small business outlook affecting other people, but it can programmers used a two-digit and the proprietors of restaurants, which could prove to be his affect you. We suggest that you designation for the year. Hence, bars and concert halls where music greatest contribution to state check it out to see just how it will when “ 1965” was keyed into a is performed. The bill would government. As for the future, affect you and if so, what you need computer, it would be recorded as require that the societies provide a Callahan said he might run for to do to stay ahead o f the problem. “65”; 1973 as "73” etc. The current copyright list and rate senate in 2002. Trying to play catch-up ball so reason for this is that early sheet. The committee sent the bill close to the 2000 date could be computers had very limited to the House where it passed horribly expensive. The problem memory and every little byte saved March 19 and now it's in the is costing Am erican business was beneficial. The pioneers also Senate. billions. speculated that computer language

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36...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 Costco continued from front page Stepping into a S am 's store, it is Aside from food, Costco carries hardware - were sold by the failed obvious that they are keenly aware other household items, many of Home Quarters stores that vacated The five new Michigan Costcos of Costco’s impending presence. which - like small appliances, a the buildings that Costco is filling. are located in former Home S am ’s recently reset num erous limited selection of building Costco’s buildings are Quarters outlets, which Costco stores to make them as customer supplies, general merchandise and expansive, but the product line is purchased from Hechinger Co. friendly as possible and they are relatively small. Costco typically The stores are located at: 2343 S. currently carrying out an Customers who live carries about 4,000 items - far Telegraph Road. Bloomfield aggressive sampling campaign. fewer than the typical discounter Township; 20000 Haggerty Road. During peak hours there is a alone or in small or supermarket, which may carry Livonia; 12700 Middlebelt Road, sampling table set up at the end of families often find 10 times that many. The focus is Livonia; 30550 Stephenson just about every food isle. Yono on the most-needed products for Highway. Madison Heights; and says this is to show customers the that although the the small business or the home, 27118 Gratiot Avenue in variety of foods that Sam’s offers, prices are good, the which covers everything from Roseville. hoping their warehouse members computers and jeans to tools and The HQ stores had 126,000 to will not be tempted to switch quantities are not 130000 square feet of floor space loyalty and head down the road to always manageable. when Costco bought them. Costco. See Costco, page 42 Construction crews have added 20,000 to 25.000 square feet of Looking for a Co-Branding Concept? Try Costco typically carries about 4,000 items - far fewer than the typical discounter or supermarket.

additional space to bring the buildings up to the standard 150,000-square-feet Costco size. Race into So how will this change the retail market in the Metro Detroit area? Costco's concept is to offer Profits By name-brand products at the lowest possible prices. This is achieved by keeping overhead low, avoiding expensive national advertising Co-Branding campaigns and buying in huge volumes. Shoppers purchase annual memberships to the stores, which also help keep prices down. With Ashby’s Nabby Yono, owner of Orchard Foods in Orchard Lake, says that • Complete Program without franchising fees Costco’s invasion into Detroit will obviously take food dollars from • Complete equipment package and store layout assistance all existing businesses. However, • Employee training support manual and materials since Costco's food selection is limited, the independent • Unique, award winning ice cream supermarkets will still be the chief • Innovative/attractive advertising and marketing materials source of food for their local customers. He believes the stores • Hats, aprons and wearables for a professional look that will feel the greatest impact • Hand-packed ice cream program. will be the other “box” stores like Sam's and Meijer. Even though a Costco will open just a few miles from Yono's store, he feels that Sam ’s, which is also just a few miles away, will be affected more than Orchard Foods. “We're smaller, we cater to the community. We cash checks, call our customers by name. You don t find that personal service in a huge store like Costco." Ashby's Sterling Ice Cream • 1-888-4-ASHBYS

AFD FOOD & BEVERAGE REPORT. APRIL 1998...... 37 P roducts

VDK Frozen Foods introduces new rising crust pizza VDK Frozen Foods has introduced new Mama Celeste™ Fresh-Baked Rising Crust Pizza into the rising crust segment of the frozen pizza category. All four varieties of Mama Celeste Fresh-Baked Rising Crust Pizza-Four Cheese, Supreme, Pepperoni and the Three Meat-retail between $5.49 and $5.69 and offer frozen food brokers and retailers a promising new entry in the fast-growing frozen pizza category, a category in which national sales have risen by more than 12 percent in 1997.

Hostess offers Rich Products introduces branded new fruit bars concepts to noncommercial Hot out of the oven. Hostess introduces new fruit and grain operators cereal bars that are low fat and made with real fruit. They have 10 percent more fruit filling than other cereal bars and are Rich Products Corporation has introduced a new marketing concept to delivered fresh to your store by your Hostess Cake route sales the foodservice industry. Rich's Branded Concepts uses brands to take a representative. The fruit bars are individually wrapped in 10.4 basic foodservice operation and transform it into a branded foodservice ounce packages of eight and are offered in five flavors: system. It is designed for schools, colleges, hospitals, business and strawberry, raspberry, blueberry, banana nut and apple. industry, airports and convenience stores. The new program consists of Authorization of shelf space in the cereal bar aisle and a cereal three Branded concepts. The concepts include Della Suprema Pizza, bar display will ensure maximum sales and profits. The gross Red Hat Deli™ and Mrs. Rich’s® Bakery. profit margin of this product is 30 percent. The strength of the program is its flexibility to customize itself to any For more information, contact your Hostess representative or foodservice operation. In addition to the Branded Concepts, the program call Stan Snyder at (313) 963-2330. provides four different modular delivery options: a menu board, counter top merchandiser, a mobile cart and an in-line kiosk.

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ADVERTISEMENT AFD on the Scene

AFD retail members in their stores

Emily and Sam Hakim have been making meat pies at Emily’s Deli in St. Clair Shores Ed Bahoura of Save-a-Lot in Pontiac for 40 years. AFD staff sampled them - and all agreed, they're GREAT!

Ramu Tahiti in Gary’s Market, Hazel Park Harry Jaboro in Hamlet Food Mart of Northville

Bob and Hani Samona run George Sorisho and his sons proudly display the Mini Mart Food Center G&P Market in Royal Oak sign that proclaims “Mini Mart meat is hard to beat!"

Mark Karmo thanks Alaa Naimi (left) and Cal Stein (right) for the most successful Turkey Drive ever. Over 1.500families were fed thanks to their leadership.

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 39 Tobacco OSHA Consolidation continued from page 15 continued from front page continued from page 4 CLASSIFIED

the states, but it devastates the challenged in the litigation. This buyers do, particularly because RETAIL MEM BERS: Turn your clutter into retailer and ignores the kids,” said means that OSHA may not use the CASH. Retail members can receive FREE they are paying with stock. If classified ad space. Suppliers and Non- Daniel Abraham, NACS Vice Instruction for any purpose. owners swap their stock in the Members pay $50/col. inch. Contact Tom Chairman for Public Affairs and Particularly, the Instruction may family company for shares in a Amyot at AFD for details. (248) 557-9600. Chairman/CEO of Garb-KO, Inc. not be used to inspect facilities or PARTY STORE— w/ Deli, Beer & Wine. roll-up, federal capital gains taxes Lotto— $8-9K weekly. Comer location with based in Saginaw, Michigan. to monitor compliance with the may not be due until they sell the parking. West Detroit. Business—$100K, The NACS is "gravely CCP. Obviously, facilities remain stock. building and equipment— $100K. (248) 557-5402. concerned" about “ a large free to adhere to the CCP’s In a leveraged buildup, a private requirements. However, they may FOR SALE— Liquor Store w/Lottery, Beer loophole" which exempts so-called equity fund starts with a platform & Wine. 2400 sq. ft. Completely renovated "adults only” stores as such and not be inspected for declining to company and then makes 3 years ago. New Equipment. South of therefore leaves convenience do so, even if they submitted the Schoolcraft, east of Southfield Road. additional acquisitions in the same $249,000+ inventory. Very motivated seller. stores at a great disadvantage. The CCP “committment" to OSHA. industry to generate synergies and Call Re/Max Exec. Prop. Brian Yaldoo al (810) 518-4600 (Pager). NACS charges the settlem ent’s OSHA does have other grounds to create economies of scale. The licensing scheme is “arbitrary and inspect facilities, including other SUPPLIERS: Looking for ways to increase LBU sponsor typically acquires your market visibility? Let the AFD show unduly punitive.” Retailers could inspection directives. The Court's companies in partnership with the you how. Promotional opportunities through face fines up to $10,000 or license order indicates that briefing will be firms' managers who own as much membership limitless. Call Dan Reeves at (248) 557-9600. suspension of 30 days or more if completed this summer. as one-third of the companies. SUCCESSFUL GROCERY STORE FOR tobacco is sold to a minor over a Argument is likely to be scheduled Following an acquisition, the LBU SALE— Full line grocery store on main two-year period. for September, and a decision is sponsor helps raise additional highway in Thumb area of Michigan, 5,000 unlikely before December. sq. ft. sales floor, full basement and paved The NACS says that despite capital, formulate strategy, and parking. Groceries, Meat, Produce, Frozen conclusive research, the settlement assists in sales efforts with major Food, Dairy, Beer, Wine, Liquor, Lottery, See you at the 14th Dry Cleaning Pickup, Greeting Cards and fails to address the impact of peer Annual AFD Buying Trade customers. Once the company Video. New roof, heating, A/C. All pressure on youth smoking reaches a critical mass, the entity equipment in excellent condition. $1.2 decisions, and while the tobacco Show, “Racing Into Profits” million in store sales. Potential gas station can be taken public by the sponsor site— EPA inspected. $500,000. Terms companies have agreed as part of Tuesday, April 21 from at significantly higher multiples available. Contact Tom Amyot at AFD by mail or phone (248) 557-9600. the settlement to drop their legal 5:00 to 10:00 p.m. and over the acquisition costs. challenge to the FDA’s new Family business owners ESTABLISHED BUSINESS FOR SALE- Wednesday, April 22, from Must sell health reasons. Wine Chateau. tobacco regulations, the NACS’ 1:00 to 8:00 p.m. For more contemplating selling to a Beer, Wine, Liquor, Lotto, Deli. 3750 sq. ft own legal challenges continues. in Troy. Call Sam Razook, (248) 689-9940. information call AFD at Family business PARTY SHOPPE & DELI— Great Royal (248) 557-9600! Oak location. Lotto, Frozen Coke, Soft Ice owners contemplating Cream, , SDM. Store sales— $11,000/week Lotto sales— $3,800/week, Business— selling to a $165,000. Building also available with two rental units— $255,000. Call Rick at (248) consolidator should be 652-2239 Or (248) 545-3500. FOR SALE— Hobart mixer, 40 qt., like new aware of the risks (attachments included)— $3999. Hobart involved. meat saw—$1799. (2) tier Electric Pizza Oven— $999. Hobart Meat Grinder—best offer. Call Jim, (313) 963-9000. consolidator should be aware of FOR SALE— Detroit store, SDD, SDM, the risks involved. Critics argue Lottery. $10,000 weekly, $6,000 Lottery. that these transactions are popular Asking $250,000— building & business. Terms negotiable. Ask for Wilson at (313) only in a rising stock market. 868-5677. Since the ultimate value of the PARTY STORE— 2,235 sq. ft. w.deli. seller s holdings is dependent on Includes 4 bdrm./2 bath 3,159 sq. ft. home stock market valuations, a w/ 20x40 inground pool & 1,902 sq. ft. office building w/garage. 250 foot frontage on downturn in the market could have U.S. 12. Gateway to 18 campgrounds, 52 negative ramifications for family lakes and M.I.S. $569,000. Century 21- Brookshire— (313) 930-6150. Tom Racine business owners. Previous waves (734) 669-6610, (800) 312-0752. Dee of industry consolidation ended DuCap-Drouillard (734) 669-6604, (800) 312-7934. when the stock market turned GREAT LAKES PAYPHONES CAN BE down. Also, family business YOUR PROFIT CENTER!— owners should ensure that the • We assume all costs for equipment, signs, enclosures or installation. consolidator has a proven track • Compensation paid on gross revenues record. As a result of the boom in (not net revenues) • Our “Smart Phones" know when repair is industry consolidations, necessary, and there’s no charge for inexperienced operators have maintenance repairs. entered the business. The • $100 special sign-up bonus. Call Great Lakes Telephone at 800-746- objective of successfully fostering 9930 today for a free site survey and sales a dominant position in a consultation with our staff. fragmented industry requires a sponsor that can successfully MCMINTO manage and integrate multiple PROFIT! acquisitions. Reprinted by permission from the Family AFD TRADE SHOW Business Newsletter o f Oakland April 21,22,199b University Center for Small Business . For more information about the center, Burton Mart or call (248) 370-4513.

40...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 We g et letters Do you need EPL coverage? I would like to thank the members of the Associated Food Dealers of Michigan for With legal protections for joining with Coca-Cola in our 1997 Fundraising Program to benefit the Associated employees expanding, many Food Dealers Scholarship Fund and the Alternating Hemiplegia Foundation. Thanks business owners are turning to to their efforts and the efforts of other retailers throughout the State of Michigan, we Employment Practices Liability were able to raise over $25,000 for these very worthwhile causes. This brings the two (EPL) coverage. Even employers year total contribution to over $58,000. with the best intentions can be sued by an employee. To see how Enclosed is a check for $12,694for the Associated Food Dealers Scholarship Fund. serious it can be, consider these We are pleased to know that this money will help deserving members or the children of recent cases: AFD Members to further their educational pursuits. Publix Supermarket settles We look forward to joining together to run an even bigger program in 1998. If you discrimination case for $81.5 have any questions or comments, please call me at your convenience. million Sincerely, In 1995, eight women sued Larry Pierce Publix for denying them Division Key Account Manager management jobs. The Equal Employment Opportunity Commission (EEOC) joined the suit and made it a class action. Publix maintained that the company has no policy against promoting women, and that the allegations arose from an effort by the Food and Commercial Workers Union to organize at the nonunion company. However, rather than face lengthy litigation, Publix settled the case. The largest portion of the settlement, $63.5 million will go to pay claims, while the rest will be used for training and m onitoring programs. Supreme court expands ability to sue under ADEA In a recent case, James O’Connor asserted that he was illegally fired at age 56. Lower courts had held that there could not have been any illegal discrimination because O’Connor’s replacement, aged 40, was also old enough to be covered by the Age D iscrim ination in Employment Act (ADEA). The Supreme Court disagreed, however, saying it was irrelevant that one person covered by the law was replaced by another person also thus protected. The only question, according to Justice Antonin Scalia, is whether the person has “lost out because of age.” Of course, the decision does not guarantee the success of the lawsuits brought under such circumstances. In fact, after the Supreme Court sent the case back down to be decided again, the court of appeals dismissed O' Connor’s case because of insufficient proof. But employers must know that simply replacing an older employee with another who is old enough to be covered by the ADEA will not protect them from a suit under that law. - Courtesy of Grocers Insurance Group, Inc.

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 41 Crime, continued from page 22 attorney fees. If you have a and Hepatitis-B. OSHA requires possible, establish “hold harmless” security firm, don’t let your that a medical professional train agreements with them. Avoid customers entering the store. employees assist in apprehending your staff to properly handle altering manufacturer-packaged Carefully monitor back room shoplifters. Leave it to the bodily fluids. Make sure your goods. If meats, service bakery storage areas throughout the day, security professionals. When your store’s first aid kit contains two and/or deli items are not sold in especially just before closing. employees get involved, your store pairs of latex gloves and a their original packaging, take Immediately notify police if you takes on additional responsibility. protective breathing mask with a reasonable steps to ensure that the encounter a suspicious person. If you don’t have a security one-way valve. All employees food is prepared properly. False arrest firm, we recommend that you stop who might perform first aid should Awareness is the first step to Your best protection against a shoplifters outside. This will be immunized against Hepatitis-B. reducing losses. Share this false arrest charge is to have a reduce the danger of injury to Product liability information with your managers "hold harmless” clause with your customers. Always have two A small percentage of claims and supervisors. Encourage them security company, in which they people whenever a stop is made. come from product complaints. to educate employees about take all responsibility for arrests. Blood-borne pathogens The average claim ranges from practices that will reduce risk of You can also establish an The federal OSHA has handed $500 to $3,000. injuries, theft, damage and agreement that requires the down strict requirements for To protect yourself, deal only lawsuits. security company to repay protecting employees from AIDS with reputable distributors. If -Grocers Insurance Group

C ostco continued from page 37

film. In many instances, the products are packaged in large A r e you tired of the quantities, such as toilet paper, popcorn and candy in cases, six bath towels wrapped together and money go-round? peanut butter in quart jars. Customers who live alone or in small families often find that Personal one-on-one although the prices are good, the meetings with lenders 16th annual quantities are not always manageable. Learn conventional & Costco also houses ancillary departments featuring fresh alternative financing Small Business Day Develop a succesful A special Executive loan proposal Membership offers Meet the "Answer Man" discounts on mortgages, car and Choose the right April 30, 1998 in Lansing financial software house insurance. Call 517-373-9808 to receive Michigan Small Business produce and meat, optical, P erso n o f th e Year a brochure & registration form pharmacy and hearing aid services, Awards Luncheon or 1-hour film developing, tire sales fax this ad and register now! and service and a deli for a quick Michigan Private 100 lunch. A special Executive Awards Banquet Membership offers discounts on mortgages, car and house Nom e insurance.

Firm City/State/Zip A nother retailer, who asked not to be named, said that Costco’s Street Address County emergence into the Detroit market will harm existing retailers in another way. T he stores will each Fax form with credit payment to: (734) 677-2407 employ approximately 200 □ Please bill my □ VISA □ M asterCard workers and Costco offers wages Card Number:______Expiration Date:______starting higher than the average S ignature:______Date:______independent store owner can afford. “This will drive the cost of Fees □ A ll events $65 wages up for all of us,” he said. □ Lunch & Program & Afternoon Reception $ 40 Other warehouse stores have □ Dinner & Program & Both Receptions $50 failed in Detroit’s tough market. Conference questions: SBA at (313) 226-6075 ext. 282 M ichigan Private 100 questions: (313) 259-7414 Only time will tell whether this Registration inform ation: (734) 677-2270 new com petitor has hit on pay dirt This conference is sponsored by the Small Business Day Council, a non-profit, public-private partnership of organizations. Steering or will disappear along with Pace, Committee: Small Business Association of Michigan; National Association of Women Business Owners-Greater Detroit; Lansing Regional Chamber of Commerce; Michigan Small Business Development Center; U.S. Small Business Administration; Michigan Jobs Commission. W arehouse Club and Source Club, warehouse stores of the past.

42...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 Years in Michigan! It always Tastes Better in Crystal! TRADE SHOW SPECIAL! •Buy 10 cases at the AFD Trade Show, get 5 cases of Drinks

Garden

6661 Chase • Dearbon 3) 534-2800

AFD FOOD & BEVERAGE REPORT. APRIL 1998...... 43 Legislative Updates and Industry News

GTECH announces sale of OSHA wants transactive contracts assets to inspect to Citicorp during court stay The parent company of Transactive, GTECH, announced last week that it has entered into an asset purchase agreement with Citicorp Services, Inc. Under the announced agreement, Citicorp will pay of CCP Transactive approximately $11.5 million, subject to adjustments, for EBT contracts and significant related assets pertaining to four The Occupational Safety and Health Administration (OSHA) has jurisdictions: Indiana. Illinois, Sacramento County, and informed the U.S. Court of Appeals for the D.C. Circuit that it intends to Texas. Because USDA had not yet signed off on Mississippi’s choice of Transactive for their EBT project, that state will drop Transactive and is begin inspecting employers pursuant to an “interim plan” that will go at this time determining if they will offer the contract to Citicorp or into effect during the court’s stay of the agency’s Cooperative release another RFP. For a period of time. Transactive will continue to Compliance Program (CCP). The agency also asked the court to clarify provide services to Citicorp as a subcontractor. Those services will that the stay allows OSHA to conduct “records verification inspections" include maintenance and support services with respect to the transaction and to speed up a hearing on the merits of the compliance program. processing host computer system. The sale does not include the OSHA's actions are in response to the court’s temporary stay of their contracts or assets in connection with Transactive’s provision of benefit compliance program, which was to go into effect February 17. identification cards to New York, electronic payment file transfer OSHA claims that it is just giving the court and the public “notice of services to the City of New York, or hunting, fishing and recreational the new plan and that it does not believe it needs the court’s permission licenses to Texas. Those services will continue to be provided by to implement it. FMI and the other plaintiffs have strongly objected to Transactive. However, the company has decided not to seek new EBT OSHA's new attempt to circumvent the regulatory process. The interim contracts. As part of the restructuring charge, GTECH expects to plan is based on the same flawed data collection initiative and. under a undergo a worldwide workforce reduction, eliminating a total of somewhat different formula, it targets the same employers as the CCP. approximately 800 positions. FMI has asked the court to make clear that the stay order bars the new plan.

Visit us at Intrastate Distributors, Inc. AFD SHOW BOOTHS 1998 AFD Trade Show Specials 241 & 243

THE 1990‘s POP SHOP

Display all available Towne Club flavors (16 initially) Snapple 16 o z —Tea, Diet, and Drinks on the sales floor for sale by the case. Snapple 20 oz—Sport Cap; Snapple 32 o z—Plastic Qualification is based on a minimum of 10 cases Snapple Farms 12 oz.— 100% Juice purchased of each flavor, i.e. 160 case 1st time order. • Snapple Farms 6 pack cans —100% Juice Reorders must be 35 cases or more. Mixed pallet • Whipper Snapple 10 oz.—New Smooth Drink purchases are allowed. • Nantucket Nectars 17.5 oz.— 100% Juice and Drinks Wholesale cost is $5.95 per case, plus a deposit of • Nantucket Nectars 36 oz.— Big Juice! $.10 per bottle & $2.60 for the wood original crate. Suggested retail: $6.99 per case, plus $5.00 deposit. • SoBe 20 oz.— Healthy Refreshment! G.P.=14.88% • Clearly Canadian 4 pack— 11 oz. Bottles Single bottle sales are encouraged, but not mandatory. • Clearly Canadian 4 pack— 11 oz. Bottles A single bottle retail of $0.59 returns a G.P. of 57.98% • Clearly Canadian 1.0 Liter Plastic Towne Club P.O.S. material, which includes banners • Jolt Cola— All Packages and window signs must be utilized wherever possible. • XTC— Power Drink • Crush— All Flavors and Sizes • Dad’s Root Beer—All Flavors and Sizes Cost is based on the graduated scale listed below: naruza 'in Purchase Case Unit Gross Quantity Cost Cost S.R.P. Profit% • Crystal Geyser Alpine Spring Water—0.5 Liter 6 pack 1-5 Cases $10.95 $0.45 $0.59 22.68% 6-10 Cases $9.95 $0.41 $0.59 29.74% > Crystal Geyser Alpine Spring Water— 1.0 Liter Sport Cap 11-20 Cases $8.95 $0.37 $0.59 36.79% > Crystal Geyser Alpine Spring Water— 1.5 Liter 21-40 Cases $7.95 $0.33 $0.59 43.86% 41+ Cases $6.95 $0.28 $0.59 50.93% Instrastate Distributors • (313) 892-3000

44...... AFD FOOD & BEVERAGE REPORT. APRIL I998 KAR NUT PRODUCTS CO. • FERNDALE, Ml 48220 • www.karsnuts.com

AFD FOOD & BEVERAGE REPORT, APRIL 1998.....45 Amendment Bill introduced to passed for states regulate to adopt lower liquor by mail The U.S. House of Representatives is BAC considering legislation to crack down on New prevention of companies that deliver alcoholic beverages ordered The Senate passed by phone or Internet without checking for age an amendment to the ISTEA Salmonella in poultry identification. highway re-authorization act Shippers, such as United Parcel Service or which would require states to approved Federal Express who deliver alcohol or wine adopt .08 percent BAC as the without verifying the recipient’s age, could face standard for drunk driving. By not Last month, researchers unveiled a method for one-year prison terms or fines under the bill. adopting .08, states would lose a preventing salmonella bacteria in chickens by growing “What we’re doing is making people follow the significant percentage of their benign microbes inside newly hatched chicks, a major law,” said Rep. Juanita Millender-McDonald. D- federal highway funds. The breakthrough for improved food safety. Calif., sponsor of the bill. amendment, sponsored by Senator The Food and Drug Administration quietly approved The bill represents the latest assault on alcohol Frank Lautenburg (D-NJ), moved use of Preempt, as the product from MS BioSciences use in this country, but some law enforcement on to the fast track for passage Inc. of Dundee, Illinois is known. officials say enforcing laws against the delivery of following President Clinton’s Agriculture Secretary Dan Glickman said tests on alcohol will be difficult. public and unequivocal support to 80,000 chicks had reduced the presence of salmonella Michigan is one of only four states-California, passage of a federally mandated to zero with only one spray application of Preempt. New York and Illinois are the others-that even .08 BAC. Salmonella, one of the leading causes of foodbome illnesses and a particular problem in poultry, is carried allows beer or wine to be shipped via mail within primarily in an animal’s digestive track and is the state. transmitted through feces. It and other pathogens cause In making deliveries, an adult’s signature is some 9,000 deaths from food poisoning every year in usually required for alcohol, pornographic 1 the United States, the federal Centers for Disease materials and expensive items, such as computers. Control said. However, delivery people aren’t required by law to Preempt is estimated to cost farmers about 2 cents ask for identification. per pound of chicken, which would cost the average The measure won early endorsement from consumer about $ 1.50 a year, said John DeLoach, of Mothers Against Drunk Driving and Americans for MS BioSciences. Responsible Alcohol Access.

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46...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 RACING INTO PROFITS Look for these show specials and new products Tuesday, April 21, 5-10 p.m. and Wednesday, April 22,1-8 p.m. Burton Manor, Livonia

7-UP Detroit will be sampling Coffee Express Co. introduces a new red cream soda — Big its Mountain Country brand of GENERAL, Red. Professional 8 oz. beautifully packaged WINE/ coffees. LIQUl Anheuser-Busch will be COMPANY sampling a new addition to Detroit Edison the Michelob family - Michelob Specialty Brand. Central Alarm Signal, Inc. General Wine & Liquor will be featuring its new Stop by Detroit Edison’s booth Company is proud to wireless line of security and find out how you can introduce and sample the systems, and its new remote significantly reduce your following new items: Jack video surveillance products. electric bill with our LightWise Daniels Country Cocktails You can view your business Program. Red Eye Jack, Tessera or home from any P.C. Wine, and Nathanson Creek located anywhere in the The E & I Gallo Winery will Wine. Are you looking to add a world! be sampling its new E & J profit center to your retail Brandy Cask-N-Cream. establishment? Ashby’s Register for a drawing to win Sterling Ice Cream Company an electronic check reader will show you how to turn 80 and 30 days of free square feet into the hottest verification service at the award winning co-branding Check Alert Systems booth. America's Oldest Processor of Pistachio Nuts concept in the U.S.! Germack Nut Co. is Frito-Lay will be sampling the introducing a new 8 oz. Anthony’s Pizza & Chicken latest in fat free snacking along select fancy whole cashew. is running a show special of with an air filled Dorito that is up to $4,000 off on their awesome. Gourmet International, Inc. pizza and chicken co- is offering a great show branding concept; there is no Garden Foods will be sampling special for regular 3.5 oz. franchise fee. the following new products: Lindt Chocolate bars at $.95 Eleve Spring Water, Smoothie per unit. Spice up your day with Aunt Coca-Cola works within your Natural Fruit Juice Energy Mid’s new Fresh Salsa existing selling space to spur Citrus Drink, Thunderhead Put a buzz in your summer available in hot and mild. incremental sales; ask your Wild Fruit Nectars, McCoy’s beer sales with new J.W. sales rep about the Saddlebag Micro-Brewed Iced Tea and Dundee’s HONEY BROWN Bar-S Foods will be offering Snackcake Unit. Increase Fruit Drink, Slim Lite with CANS from High Falls an opportunity for retailers to sales on your very profitable Citramax (natural way to lose Brewing Company. sell Bar-S Franks for the single drive business, and weight), TradeWinds Real Memorial Holiday at two for your snack cakes, all within Brewed Teas, and Tumbler Hobart introduces home a dollar. your current floor space. Sports Drink. meal replacement solutions.

AFD FOOD & BEVERAGE REPORT, APRIL 1998...... 47 RACING into p ro fits Show specials and new products

from 100 percent Russett W i ne & Buy 10 cases of Melody potatoes and real butter, the Liquor Farms Crystal Falls Spring mashed potatoes are Corp. Water (available in three microwavable and ready to different sizes) and receive eat in five minutes. L & L Wine & Liquor now six cases free (must be owns Liberty Cigar Co. and delivered with a milk order). will be displaying many new Hostess Cake is sampling a items. new product line of cereal bars: strawberry, banana, Exclusive to Lipari Foods is, blueberry, apple and Dinicola Premium Pasta, raspberry. Kowalski will be showing off from Italy which is available its new Honey and Spice in 14 varieties. Lipari also I & K Distributors, Inc. is Boneless Spiral Ham and its welcomes Western Country introducing “ready to eat” famous Hunters Sausage in a Pies which are available in 10 mashed potatoes under their new size retail package. varieties of thaw and sell, Yoder’s brand label. Made prepackaged pies.

Amato Foods presents . . . “Pizza Systems” by Volke Manufacturing

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Featuring the compact model 400 dough roller for use with fresh dough balls Toll Free Sales 888-4 ATM USA Call 888-200-4332 THE ATM COMPANY For FREE information

See us at the AFD SHOW # 147

48....AFD FOOD & BEVERAGE REPORT, APRIL 1998

RACING INTO PROFITS Show specials and new products

either 50 or 25, $2 instant tickets each show day. We Oven Fresh and Diamond will also have samples of our Premium Nut Co. are new $2 instant game "Lucky introducing new Diamond M om” — just in time for Nut Breads - a sandwiches’ best friend. Stop by Michigan Lottery ’s Mother’s Day. This game Pepsi-Cola is introducing a booth and sign up to win starts April 27, 1998. new chilled coffee drink called Frappuccino available in coffee, mocha, and soon to be available in vanilla flavor.

Potok Packing will be sampling a line of products from Meat King and Davis North Pointe - Brand Sausage. Michigan’s Leader POS Systems Management is in Liquor Liability offering three show specials North Pointe where you can save up to Insurance Co. for 10 years running! $ 1,000!

Rated B++ (Very Good) by A.M. Best RedHook Ale Brewery, in addition to introducing the fall line of hand-crafted ales, is sampling RedHook Nut Brown Ale which is the Competitive Rates seasonal rotator to Winterhook and Blonde Ale. Endorsed by AFD for 9 consecutive years

✓ Never assessable, no deductibles, policy fees or surplus lines tax

Available through the Independent Rocky Peanut’s private label Agent network with over 1,000 snack program is a huge agencies to serve you success, and they are proud to introduce a new selection of conveniently packaged snack items. 1-800-229-NPIC 1-248-357-3895 Fax Salerno Foods will be Admitted, Approved and Domiciled in Michigan introducing and sampling a or call AFD at new line-up of soft baked 1-248-557-9600 or 1-800-66-66AFD oatmeal, molasses, chocolate chip, and sugar cookies.

Scott Pet Products is offering a show deal: buy one pallet of any of our Birdseed, and you will receive one case of Suel Cake free.

50...... AFD FOOD & BEVERAGE REPORT. APRIL 1998 Seagram Americas invites Tom Davis & Sons Dairy Jays Foods is introducing a Stroh’s Ice Cream will be you to unlock the latest Company is pleased to new corn and sampling new “Faygo Pop’s treasure from Captain introduce the complete Full called Tesoritos. Put the and new Faygo/Stroh’s half Morgan... Parrot Bay Coconut Service Supplier program for flavor of the south in your gallon floats at the show. Flavored Rum. the c-store / retail industry; mouth! sign up today and receive Travelers Express can now Sherwood Food Distributors trade show discounts on your offer you even more services will be introducing a new opening order. than money orders! You can Black Angus program, as w ell also have Gift Certificates, as new additions to the Amish TOMRA: free installation and Melody Farms, the master Utility Bill Payment and Valley line o f delicious delivery for orders on Reverse distributor for Nestle Ice Vendor Payments from their products. Vending Machines placed at Cream (single serve), will be dispensers. Stop by for the show. displaying the new Nestle special dispenser pricing. products, and the freezer gpanran program at the show. Spartan Stores, Inc. is offering show specials in f ' Attention AFD members grocery, frozen, dairy, and this year we will be offering fresh meats and produce specials too!

Stroh’s Ice Cream is proud to introduce more successful Your health care options from BCBSM are designed... new Stroh’s Homemade For every stage of your life. Sanders Flavors and exciting new Faygo novelties. For every company size. And for every budget. Stop by The ATM Company’s booth and see if you qualify The AFD health care purchasing coalition allows even the smallest for a free unit in your location. business to choose from a wider variety of Blue health plans and options than are otherwise available. You can add dental, vision, The Lander Company is hearing and prescription drug coverage at a nominal extra charge. offering a free tower display rack with your opening order With AFD-endorsed Blue coverage, you can be certain that you're of health and beauty care getting the best coverage available at the best possible price and products. value.

Judy Mansur is AFD's expert on Blue products. For more information, please call her at 1-800-66-66-AFD. The Stroh Brewery Company will be sampling Special Brew in new 4/6/12 oz packages in the following flavors: kiwi, strawberry, and mixed fruit flavors — berry and passion.

Lease or purchase a Frozen Coke Freezer from Taylor Freezer and receive (2) five gallon boxes o f syrup free — a $500 profit incentive!

AFD FOOD & BEVERAGE REPORT. APRIL 1998...... 51 RACING INTO PROFITS 14th Annual Buying Trade Show Racing Into Profits Tuesday, April 21, 5-10 p.m., Wednesday, April 22, 1-8 p.m. Burton Manor, Livonia

Associated Food Dealers of Michigan 14th Annual Buying Trade Show

52...... AFD FOOD & BEVERAGE REPORT, APRIL 1998 RACING INTO PROFITS

EXHIBITORS IN ALPHABETICAL ORDER

7-UP Detroit - 161 Great Lakes Wholesale -158 PMI-Eisenhart -188 AirPage - 180,182,184 Habfus -149 Pointe Dairy Services -162, 164 AirTouch Cellular 107 High Falls Brewing Company -170 Potok Packing - 246 AMT Telecom Group - 104 Hobart - 189 POS Systems Management - 327 Amato Foods - 305 I S. K Distributors -126 Presidium -102 Anheuser-Busch -113, 115 IntraState Distributors - 241, 243 Quality Inventory - 306 Anthony’s Pizza -190, 191 J. Lewis Cooper - 148, 150 R.M. Gilligan, Inc. 134 Aunt Mid Produce -192, 193 Jays Foods - 307 RedHook Ale Brewery -156 Awrey Bakeries -139 Kar Nut Products - 174, 176, 178 Rocky Peanut -114 Bar-S-Foods -133 Kehe Foods - 310, 312, 314, 316 Salerno Foods - 304 BetterMade Potato Chips -112 Kowalski Companies -186 Sales Mark -122 Blue Cross Blue Shield -105 L.J. Ross Associates-311 Sanders Sales -123, 124 Brehm Broaster -159 L & L Wine World - 324, 325,326 Scott Pet Products -163, 165 Central Alarm Signal -137,138 Landers -125 Seagram Americas -132 Check Alert Systems - 245 Lipari Foods- 151, 153, 155, 157,160 Sherwood Foods 195 - 233 (40 Coca-Cola -187 Melody Farms -136 booths) Coffee Express - 302 Metz Baking - 322, 323 Spartan Stores -185 Cornelius Systems - 308 Michigan Bankard -109 Strohs/Mooney Ice Cream -123, Dairy Fresh Foods - 172 Michigan Lottery - 303 124 Detroit Edison -135 Michigan National Bank -110 Stroh Brewery Company - 237 E S. J Gallo Winery -152 Miller Brewing Co. 181, 183 Superior Dairy -194 Envipco -154 Nantucket Nectars - 239 Taylor Freezer -140, 141 Faygo Beverages - 131 Nationwide Communications - 301 The ATM Company - 300 Frito-Lay-177,179 Nikhlas Distributors -171 Tom Davis & Sons Dairy -129, 130 Garden Foods - 235, 236, 238, North American Interstate -166, 169 TOMRA-175 240, 242, 244 North Pointe Insurance -106 Travelers Express - 234 General Wine & Liquor -119,120,121 OK Communications -127, 128 Union Ice -147 Germack Nut Co. -117 Oakland Graphics - 309 Western Union -108 Golden Valley Dairy -111 Oven Fresh Bakery -167 Wonder Bread / Hostess -173 Gourmet International -168 Pepsi-Cola-116, 118 tf/IC f INTO PROFITS WITH UFO!

AFD FOOD & BEVERAGE REPORT, APRIL 1998.....53 SUPPORT THESE AFD SUPPLIER MEMBERS

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