Associated Food Dealers PRSRT STD 18470 W. 10 Mile Rd U S Postage Southfield, Ml 48075 PAID FOOD & BEVERAGE DETROIT,Ml REPORTChange Service Requested PERMIT#36 The official publication of the Associated Food Dealers of Michigan September 2003 Working hard for our members. Inside Sarafa calls for $75 million Reverse vending costs disaster relief for stores escalate Michael G. Sarafa, were lost due to lack of that many of the retail food Sarafa added. AFD calls on president of the Associated refrigeration. Looting also stores that suffered the “If Governor Granholm is manufacturers to take Food Dealers of Michigan, is occurred and greatest losses are going to seek federal disaster calling for $75 million in many stores uninsured or relief, then part of that responsibility for SKU disaster relief for Michigan’s suffered loss of underinsured,” said equation should include the change fees. retail food industry. “In spite income because Sarafa. noting that businesses that suffered the • See page .? of the great job that DTE they could not insurance greatest losses, which includes Energy did to restore power stay open companies are the retail food industry,” Counterfeit coupons and our law enforcement without power. reluctant to provide Sarafa added. hit the streets officials efforts to keep order Sarafa said that insurance to He encourages retailers to • See page 4 during the recent power many stores businesses in monitor the AFD website, outage, our retail food stores chose to give certain areas. www.afdom.org for Faygo celebrates suffered great losses,” product away before it went “Unfortunately redlining information regarding their state-of-the-art explained Sarafa. He bad, instead of throwing it occurs with business eligibility for Federal Disaster| maintains that over $50 away. interruption insurance and Relief Funds. facility million in perishable foods “The unfortunate part is disaster insurance as well,” Detroit dignitaries came out to special event. Special • See page 20 Step into the limelight at the AFD / Beverage Journal Frito-Lay Meet Rep. Gene promotional DeRossett Holiday Show offer for AFD • See page 27 Plan to attend this important trade show, September 23 & 24, f at Burton Manor in Livonia. See pages 38 and 39 for show members only Credit card specials and details. Here are some of the latest industry trends, Frit^-f f»y h?* — straight from the experts: a special promotional processing program especially for AFD program offers Flavored Beverages Are Hot members. The program will Luxury Items Are Soft (except for Vodka) offer an entire year of discounts promotions targeted AFD members can save on • New Products Are On Fire! specifically for AFD credit card processing fees. members. • See page 29 AFD asked some industry Learn more about this leaders about the trends in the exciting program at the AFD/ liquor industry. Here’s what “Made in Beverage Journal Holiday they had to say: Show. Michigan” Ronnie Jamil, Mug & Special Edition Jug Liquor Stores Kellogg increases Help us celebrate the “Mid priced products dominate sales in every earnings 17.3 bounty of Michigan category across the board. products during our The luxury product trend is percent over... for now.” Kellogg Company gained October Made in popular, but brand loyalty is problems. In 2002 spirits 17.3 percent in the 2003 Michigan special minimal so a category leader contributed almost Ralph Gallozi, Golden second quarter for strong is still not evident.” $200,000,000 in revenues to edition. Please call company-wide sales. The Wine Cellar the state. That is almost five Ray Amyot at “If it’s new or flavored, I company earned $203.9 Faiez Asmary, National times more than beer and 27 can't keep it on the shelves. (989) 386-9666 or times more than wine.” million or 50 cents per share In the flavored drink race, Wine & Spirits for the April-June period “The spirits industry is (248) 557-9600 to be a rum and vodka are neck and compared with $173.8 continuing to do its part to part of this exciting neck. The new malt See Holiday Show million, or 42 cents per share help the Michigan budget publication! beverages are also very Trends, page 10 the previous year’s quarter. 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Limit one entry per store location. 1 ^ Xlo* In 6 mss tot tmialtlelmt toy euesXKpexe cal I2SS) 322-5450 Acti/il items recemtmiy my sq/ity/m those pctml We recommend you Aeep a copy or TINS form tor your reconts Pepsr fu/IEBmenr Cerrrer ts nor responsbiie rcr Arte lost tJamaged irKtropitte itogiDle. postage due. ot misdmtetl mail CCwvnaXdWAemgSoveqesGnxe re ArmrerarLs reiesrere freer are« pater, crow estrese owres w are reqsrerefl e x e c u t i v e c o m m i t t e e T*fiy Fjrida, Chairman President's Message Value Center Markets Ronnt* Jamil. Vic# Chair Membership i Mug > Jug liquor Stores Fred Dally, Viet Chair Community Relations Medicine Chest Reverse vending costs escalate Gary Davie. Vice Chair Legislation Tom Davis & Sons Dairy Co Thomas Welch. Vice Chair Future Planning Hollywood Super Markets However, a retailer recently products they introduce each year. Chris Zebari. Treasurer New Hudson Food Market brought something to my attention Matt Rosenthal from Faygo said that Al Chittaro. Secretary that impacts all stores that use reverse his company introduced “four new Faygo Beverages. Inc vending machines. Reverse vending items this year, in two different EMERITUS DIRECTORS companies charge a fee each time that package sizes, that's eight SKUs and Sam Dallo they reprogram or add an SKU the year isn’t over yet.” In ‘N 'O ut Foods number in a machine. Each new Other pop and beer companies Bill Viviano House ol Pnme product must have a new SKU weren’t quite as aggressive with new Mark Karmo number. The fee to add each new product introductions, but overall, we Golden Valley Food Center estimate that retailers must cope with Nabby Yono SKU in the reverse vending Orchard Food Center machine’s computer can be over at least 20 SKU changes a year. At Frank Arcori By Michael G. Sarafa S1 (X). If you think about it, costs can $110 to $120 each time, that can run V.O.S Buying Group AFD President creep up fast. to a hefty $2,200 to $2,400 annually RETAIL DIRECTORS Michigan’s $4.3 billion bottle Eddie Kassab of Food Basket per store, on top of maintenance fees Jim Garmo Shopper s Valley Market. Region 2 deposit business is bigger and costlier Supermarket in Pontiac feels that the and other reverse vending charges! Brandon George than you may think. Over the years, distributors must take responsibility This is big business. It also keeps Red Wagon Wine Shoppe since the bottle bill took effect in for this cost when they introduce a employees at reverse vending James Hooks Metro Foodland 1978, the reverse vending industry new product. He suggested that companies very busy. However, this I Nick Kizy has become big business. Retailers manufacturers should either pay the cost clearly should not be the Warrendale Food Center have had to absorb the costs of the reverse vending company or the responsibility of the retailer. Alaa Naimi Thrifty Scot Supermarket reverse vending units and their stores. For now, stores must remain the John Pardington maintenance. The only alternative is Another point that Kassab made is collection site for returnable bottles Holiday Market. Region 1 and cans, an issue that AFD is Tom Rubel to staff a bottle return area, which in that customers get mad when they Spartan Stores.