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E&C News Cover
Highlights of the March 2009 Issue
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NEWS PAGES (Click here)

 

RESALE SERVICES — BEHIND THE SCENES
Military Brokers

 

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DeCA PRODUCE DEPARTMENT — REACHING NEW HEIGHTS

The Defense Commissary Agency (DeCA) Fort Rucker, Ala., store's produce department posted increased sales during fiscal 2008 and through the first quarter of fiscal 2009. Catering to customer needs has been one of the keys to the department's success, allowing it to reach new sales heights.

FACTS AND FIGURES

The department, overseen by Produce Manager Deborah Mundt, operates in 3,100 square feet — 10.2 percent of the total store footprint of 30,290 square feet — and it is positioned near the entrance of the store “so that it's the first major department customers encounter,” Mundt said.

The produce department — part of a store that is open a total of 52 hours a week and open every day but Monday — features about 400 items, including plants. According to Mundt, the breakdown is 49 percent vegetables; 28 percent fruit; 13 percent salads; 6 percent nuts, trail mix and juices; and 4 percent plants.

The Fort Rucker produce department's $2.39 million in sales during fiscal 2008, Mundt said, was a $260,000 increase from sales posted during fiscal 2007.

SALES TRENDS

Mundt said the department's increase in sales was not unexpected. “Our sales typically go up every year, and we're seeing a lot of new customers who are using their commissary benefit like they've never done before because of the economy.'

The store's customer base is watching its pocketbooks. The commissary's retiree base numbers 50,000 within a 25-mile radius of the store and there are about 6,000 active-duty personnel stationed there.

“Educating customers about the healthy choices they make when they select fruits and vegetables is all part of what the produce department does to not only boost sales, but to help customers maintain good health,” Mundt said.

Fort Rucker
A creative copter display highlighted various produce items as part of a healthy breakfast in the Fort Rucker, Ala., commissary.
TOP SELLERS

Bagged salads are the store's top-selling produce item. “In January, we sell $1,000 a day in bagged salads,” the produce manager said. “People are especially diet conscious in January, and the bagged salads are convenient.”

Bananas are another of the department's best sellers, and Mundt said potatoes and onions are a “major attraction” of the back wall, with refrigerated display cases lining the sides of the department.

“What we're seeing now is customers are buying a larger variety of fruits and vegetables than they did a few years ago,” Mundt said, adding that more exotic items, such as star fruit or baby bok choy, do well, “primarily because of the ethnic diversity of our customer base and the fact that we can get items from around the world.”

EXPERIENCED STAFF

Store Director Mike O'Meara was a civilian grocery store produce manager in the 1970s, and Mundt's staff includes store workers Brenda Fitts, Darold Gibson, Stephen Pope and Christopher George, and Store Associate Kathryne Ray. “These are some of the people who make our team one of the best in DeCA,” the produce manager said.

CONTRACTING PARTNERSHIP

The department's excellent relationship with its grocery contractor also makes the department click. “Our store has an experienced group of produce workers, so the Military Produce Group (MPG) folks concentrate a lot on providing merchandising support in our store,” she explained. “Their service has greatly boosted our quality, and that's very important in the fresh produce business. Customers simply won't buy poor quality fruits and vegetables.”

“We simply order what MPG offers and shipments five days a week are more than adequate to meet our demand,” Mundt said, adding that this type of frequency helps the department's rotation. Quick lead times help the produce department to stay fresh day-in and day-out. “Our lead times are great,” Mundt said. “Produce is one day, which is just incredible. Salads are two to three days. They offer weekly specials, which have to be ordered two weeks in advance, but they allow us to change an order if we decide closer to delivery date that we don't need it or the quantities are wrong.”

NEW PRODUCTS

The department is constantly on the lookout for new products to add to its assortment. Mundt said that in 2008, she and Fitts went to the Produce Merchandising Association's (PMA) annual Fresh Summit show, which was held in Orlando, Fla., in October.

“We noticed a variety of fruit baskets packaged with shrink wrap designed to be given as holiday-themed gifts,” she recalled. “We ordered the basket kits — they come with everything you need except the fruit — and offered them for sale for Christmas. Our customers loved them and we enjoyed making them. We sold more than 100, and we're going to sell them for upcoming holidays this year.”

”In the summer, our store featured produce from Slocomb, Ala.,” Mundt said. “Through an arrangement with MPG, a farmer from Slocomb — he's a veteran and commissary shopper — sells his tomatoes and a wide variety of locally grown produce, including cantaloupe, squash, eggplant and peppers. It's so popular that our customers start asking for the 'Slocomb' man in the spring.”

PROMOTIONS

“We always participate in DeCA's produce merchandising contest and in many of the other display contests sponsored by various fruit or produce associations,” Mundt said. In 2007, the department won an “Honorable Mention” award in the Large U.S. Store category.

Cross-merchandising is an important aspect of the department's promotional activity. “Our store does a lot of cross-merchandising and we have great cooperation from other departments and our vendors,” Mundt said.

FISCAL 2009

Mundt reported that the excellent sales atmosphere that the department experienced during fiscal 2008 has continued into fiscal 2009.

During the first quarter, Mundt said total store sales activity was up $900,000, “and produce is part of that, so it looks like we're on target to meet our goal of $2.5 million” in annual produce sales.

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ConAgra
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MCX SNACKS — POPULAR AND EMERGING BRANDS
   'FLEX' SALES MUSCLE

The snack assortment at Marine Corps Exchanges (MCX) packed a great deal of sales punch, with a strong double-digit sales increase posted during fiscal 2008, and has been shaped — and expanded — to meet the ongoing needs of customers through fiscal 2008 and into fiscal 2009.

SALES, POPULAR ITEMS
Morgado

According to Food Buyer Rebecca Morgado, MCX snack sales during fiscal 2008 through December 2008 were $13.91 million, an increase of 19.31 percent versus fiscal 2007 sales of $11.66 million.

Top sellers in the MCX assortment during fiscal 2008 comprised many of the most well-known brands and items in the snack category, offered a variety of robust flavor profiles and formats, and included a number of healthier-for-you snacking options.

Quantico Snacks
MCX snack sales during fiscal 2008 through December 2008 were $13.91 million, an increase of 19.31 percent versus fiscal 2007 sales of $11.66 million. MCB Quantico, Va., Marine Mart.

In chips, the most popular items through December were two Doritos Tortilla Chip varieties, Cool Ranch Mega-Grab and Nacho Cheesier, along with Sun Chips French Onion Multigrain Chips. In meat snacks, Giant Slim Jim was the top-seller, followed by Jack Link's Teriyaki Jerky and Monster, a second Slim Jim product. In pretzels, three Rold Gold items — Classic, Tiny Twists, and Sticks — led sales in the category.

MCX Fiscal 2008
Top-Selling Snacks

Chips
1) Doritos Cool Ranch Mega Grab Tortilla
     Chips
2) Doritos Nacho Cheesier Tortilla Chips
3) Sun Chips French Onion Multigrain
     Chips

Meat Snacks
1) Giant Slim Jim
2) Jack Link's Teriyaki Jerky
3) Slim Jim Monster

Pretzels
1) Rold Gold Classic
2) Rold Gold Tiny Twists
3) Rold Gold Sticks

Dips
1) Tostitos Con Queso
2) Frito-Lay Jalapeno Cheddar Dip
3) Frito-Lay Bean Dip

Fruit Snacks
1) Dole Pineapple Cup
2) Del Monte Sliced Peaches Cup
3) Del Monte Pears Cup

Nuts and Seeds
1) David Ranch Sunflower Seeds
2) David Original Sunflower Seeds
3) Frito-Lay Honey Roasted Peanuts

* Through December 2008. Source: MCX
'FLEX'IBLE ASSORTMENT

Morgado said the continuing influence of distributor the McLane Co. on the MCX snack assortment is seen in the variety of products that MCX stores carry in this selection.

“McLane was able to bring to the MCX their best sellers to expand our assortment,” she said. “Our customers have greatly benefited from the McLane-MCX relationship.”

The buyer said McLane brought the MCX-specific planograms based on exchange service sales and outside-the-gate best sellers. “Our store product mix caters to customers who are looking for ready-to-eat (RTE) snacks to meet the needs of their busy lifestyles,” she said.

“We will continue to work with our category captains and tailor our planograms to meet the needs of our customers,” she said. “During our McLane resets, 'flex' space was worked in at each site to allow for a regional mix for each assortment. This allows store managers to incorporate their specific best sellers with all other MCX best sellers to satisfy their customers and maximize sales.”

BROADENING ASSORTMENT

The addition of new items is part of this assortment expansion. With what Morgado characterized as “broad flavors” influencing the snack mix, the exchange service added several products from emerging snack food manufacturer Thanasi Foods during the days just prior to the end of fiscal 2008.

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NEXCOM CANDY — CANDY CUSTOMERS STILL TREAT THEMSELVES
Morgado

“Even though times are tough economically,” says Buyer Amy Via, “candy is still that affordable luxury.”

That's the best news that the Navy Exchange Service Command (NEXCOM) could ask for regarding its confectionery assortment. Year-to-date fiscal 2008 sales for the candy, gum, and mints categories were $20.84 million, compared to $19.96 million for the same period last year — a 4.41 percent increase in dollar volume and a 4.58 percent increase in units sold. “Basic candy is where the increase in sales was for 2008,” observes Via.

DISTRIBUTION, GROWTH

The buyer has no doubt as to the impact that fulfillment by the McLane Co. has had. “Increased in-stock levels by delivering from McLane have helped to increase sales. McLane has allowed us to have high in-stock levels and our assortments do not have to be dictated by vendor minimums. This allows the customers to be able to buy what they want when they want it.”

The buyer notes that “customers are always enthusiastic about new flavor profiles based on the new trends. They are willing to try new things. The line extensions and new products help to keep the assortment fresh and exciting.”

NEXCOM Bagged Candy
Bagged-candy products continue to be popular with NEX patrons.
NAS Oceana, Va.
TOP SELLERS

Chewing gum products in particular have seen an explosion in the variety of offerings in recent times, with most of that variety coming from Wrigley, which had 15 of the top-20 chewing gum SKUs in NEXCOM stores.

Orbit Wintermint, (14 pieces) was the top product, which was followed by Orbit Peppermint (14 pieces). Eclipse Spearmint was next, which was followed in order by two other Eclipse items: Polar Ice and Winterfrost.

Doublemint (five stick) was sixth; Dentyne Ice Spearmint, seventh; and Orbit Sweetmint, (14 pieces), eighth. Next were two more Orbit products: Bubblemint (14 pieces) and then Citrusmint (14 pieces).

The items following in order were Winterfresh (five stick); Orbit White Peppermint (12 pieces); Bubblicious Watermelon Wave; Spearmint (five stick); and Big Red (five stick).

Eclipse Peppermint was sixteenth, and 5 Cobalt was seventeenth. Rounding out the top-20 were Dentyne Ice Peppermint, Trident White Peppermint, and Hershey's Ice Breakers Ice Cubes Spearmint.

NEXCOM's Top-15 Bar
Chocolate Candy SKUs

Snickers, single bar
Reese's Peanut Butter Cup, 1.5 oz.
M&M Peanut, single
Hershey's Chocolate with Almonds
Hershey's Chocolate, single bar
Kit Kat, single bar
Twix Caramel, single bar
M&M Plain, single
York Peppermint Patty, single
Almond Joy, single
Snickers Almond, single
3 Musketeers, single
Butterfinger, single bar
Milky Way, single
Nestlé Crunch, single bar
NEXCOM Top-15
Bagged Candy SKUs

Trolli Sour Brite Crawlers (5 oz.)
Farley's & Sathers Gummi Worms (5.25 oz.)
Swedish Fish, red (5 oz.)
Twizzlers, strawberry (7 oz.)
Twizzlers, strawberry (16 oz.)
Farley's & Sathers Gummi Bears (5.25 oz.)
Farley's & Sathers Orange Slices (11 oz.)
M&M Peanut (5.3 oz.)
Trolli Peaches (4 oz.)
Snickers, Fun Size (11.18 oz.)
Life Savers Gummi Savers, 5 flavor (7 oz.)
M&M Peanut (12.6 oz.)
Reese's Miniatures (5.3 oz.)
Jolly Rancher Original (7 oz.)
Life Savers Gummi Savers, mixed berries (7 oz.)
PROMOTIONS

Via said that the NEX would extend its basic approach to promotions into 2009. “We will continue our monthly promotions ('Bonus Buys') on end caps for new products or great deals. Valentine's, Easter, Halloween and Christmas are highly promotional seasons for us, yearly. For each major holiday, we focus our ads on the two to three weeks before the holiday and the week of the holiday.”

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AAFES STRATEGIC PLAN OUTLINES STEPS
   TO MEET CHANGING CUSTOMER NEEDS
• DALLAS  
Keith Thurgood

The Army & Air Force Exchange Services (AAFES) has issued a five-year strategic plan. This ambitious, multi-faceted document outlines a comprehensive road map to achieve what it calls “record financial success over the next five years.”

AAFES Commander Maj. General Keith L. Thurgood, USA, in line with the plan's objectives to increase sales, revenue and overall customer satisfaction levels has unveiled an operating model featuring five strategic goals:

  • develop life-long emotional connections with customers;
  • build a culture of loyalty, ownership, sustainability and continuous improvement;
  • provide expeditionary and mission support capabilities — to go where our customers go;
  • be the premier collaborative partner with federal and commercial entities; and
  • communicate the benefit, value and capabilities of AAFES.
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CGCSC TO STAND UP AS NEW COMMAND
• CHESAPEAKE  
Edward Eng

Capt. Edward N. Eng, USCG, chief of the Coast Guard Office of Exchange and Morale, has announced that the Coast Guard Exchange System (CGES) will “be established as a separate field command, very similar to the other service exchanges.”

The new command, the Coast Guard Community Services Command (CGCSC) was to stand up March 26, 2009, with a unit establishment and ribbon-cutting ceremony here.

CGCSC will be an umbrella structure for both CGES and the Office of Morale and Well-Being. “Not only will we continue in our current role as CG Exchange leadership,” stated Eng, “but will also take on additional centralized responsibilities for the former 13 Maintenance and Logistics Commands (MLC)/Integrated Support Commands (ISC), Morale, Well-Being and Recreation (MWR), and Child Development Centers (CDC) programs under the new PSC structure. As the Coast Guard's Non-Appropriated Fund (NAF) Center of Excellence, CSC will continue providing the highest quality goods and services in our vital non-pay compensation programs to the men, women, and families of the U. S. Coast Guard.”

Both CGES and MWR will retain their own names, although they will collectively be organized as the CGCSC, which will remain headquartered in Chesapeake. Regarding the stores themselves, Jana M. Sias, administrative assistant, Office of Exchange & Morale, assured, “Everything will remain exactly the same.”

However, Eng's title will change to Commanding Officer.

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EXCHANGE BENEFIT SURVEYS SHOW PROOF IS IN THE SAVINGS
• WASHINGTON  

The exchange benefit is one of the major components of military quality of life, and its value in terms of savings to servicemembers and their families has been confirmed by recent market basket surveys of the different services.

According to the Department of Defense (DoD) Social Compact, exchange products and services are to be “provided at market-basket savings of no less than 11 percent.” The various exchange services have outperformed this benchmark by up to more than 16 percent.

MCX Price Survey
The Marine Corps Exchanges (MCX) Price Survey, conducted Dec. 8—13, 2008, reveals that MCX customers save, on average, 27.2 percent on a market basket comparison to outside-the-gate retailers' prices — a savings increase of 1.47 percent over the results of the prior survey from April 2008.
THRILLING RESULTS

The Navy Exchange Service Command (NEXCOM) October 2008 Market Basket Survey showed that customers save an average of 23 percent on merchandise purchased at their local Navy exchanges — up an aggregate of 3 percent from their previous survey. The Army & Air Force Exchange Service's (AAFES) Market Basket Survey, also conducted in October, shows that exchange service customers save a cumulative 20.38 percent on their purchases compared to civilian retailers. And the Marine Corps Exchanges (MCX) Price Survey, conducted Dec. 8-13, 2008, reveals that MCX customers save, on average, 27.2 percent on a market basket comparison to outside-the-gate retailers' prices — a savings increase of 1.47 percent over the results of the prior survey from April 2008.

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AAFES OPENS NEW FORT RILEY PX
• FORT RILEY, Kan.  

On Feb. 13, the Army & Air Force Exchange Service (AAFES) opened a new post exchange (PX) at Ft. Riley, Kan., complete with its motto: “We go where you go!”— AAFES Commander/Chief Executive Officer (CEO) Maj. Gen. Keith L. Thurgood, USA, was on hand for the ribbon-cutting ceremony.

The new $24 million, 132,000-sq.-ft. complex, at Trooper Drive at Camp Forsyth, also features a slate of ancillary businesses, including an 18,000-sq.-ft. food court — which opened Feb. 3 and has a Manchu Wok and other well-known foodservice operations — a GameStop outlet, and a barbershop.

Fort Riley
“We go where you go!” The new Fort Riley, Kan., PX is part of the more than $1 billion in new construction that is being commenced or completed on post, which has been necessitated by the 2006 return of the 1st Infantry Division from Germany to the installation.

The new PX is part of the more than $1 billion in new construction that is being commenced or completed on post, which has been necessitated by the 2006 return of the 1st Infantry Division from Germany to the installation. The base's soldier population is expected to climb to 19,000 by 2013. Additional services and facilities are being built to accommodate the influx of soldiers and families to Fort Riley.

The new PX replaces a smaller facility (89,000 sq. ft., with 39,000 in retail sales floor) that will now house a furniture store, a Class Six, and a troop store; it will retain several other businesses, including the original food court.

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DECA SCORES ANOTHER SUPER BOWL SALES RECORD
• FORT LEE  
SuperBowl
Convenience-type foods dominated the top-sellers list for Jan. 31. Soft drinks and easy-to-prepare foods continued to be the mainstays of a Big Game celebration, like the “Tailgate Bash” enjoyed by these airmen at the Bitburg, Germany, commissary on Super Bowl Sunday.

Super Bowl XLIII was an exciting football game, with the Pittsburgh Steelers needing last-second heroics to beat the Arizona Cardinals 27-23 at Raymond James Stadium, Tampa, Fla.

Not only was the Sunday, Feb. 1 game the most watched Super Bowl in history with 98.7 million viewers, the anticipation that was built ahead of the event also helped the Defense Commissary Agency (DeCA) to once again amass record sales on the day preceding the epic National Football League (NFL) championship clash.

According to the agency, Saturday, Jan. 31, 2009, the day before the Big Game, was the biggest sales day for the agency during the 21st Century. The day's net sales of $29.48 million bested by 3.2 percent the prior best sales day, Saturday, Feb. 2, 2008 — the day before Super Bowl XLII — when the agency reported $28.55 million in sales.


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ALSO IN THIS ISSUE:
  • Contractor Tax Withholding Delayed Until 2012, Coalition Seeks Repeal
  • Tobacco Tax Increase to Fund Insurance Program
  • AAFES Honors Civilians for Support in Global War on Terror
  • Major Military Resale Book and Magazine Supplier Shutters Operations
  • DeCA SALES DIRECTORATE —
    WHAT'S NEW AT THE MBU
    :
    • NON-EDIBLES CATEGORY MANAGER — William T. “Bill” Wood
    • EDIBLES CATEGORY MANAGER — Angel Ramos
    • FROZEN/CHILL FOODS CATEGORY MANAGER — LaRue Smith
    • DeCA PRODUCE OPERATIONS — Max Goldfarb
    • DeCA BREAKFAST FOODS — Starting the Day the 'Right' Way — Lisa Talcott, Regina Johnson
    • DeCA BACK-TO-SCHOOL — Lunch Box Full of Savings — Lisa Talcott
  • GREENTAILING UPDATE — Momentum Builds for Sustainable and Green Programs and Products
  • NEXCOM SNACKS — Strength Continues in Fiscal 2009
  • DeCA SNACKS & CANDY — Sweet and Salty Success
  • AAFES CANDY — Tie-Ins, Replenishment Lead the Way
  • AAFES NBFF — More Than Burgers and Fries
  • NEXCOM NBFF — Evaluation Ongoing For Fast-Food Concepts, Healthy Menu Options

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