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Highlights of the September 2017 Issue


NDAA: $2 Billion Resale Cost-Benefit Analysis Sought


• WASHINGTON — Although the House defense policy bill for 2018 (H.R. 2810) sent to the Senate on July 18 did not prescribe any new elements that would immediately alter the current military resale reform picture, it did reopen a Congressional window on ways to reduce resale appropriations.

During consideration by the full House, representatives added a report requirement on exchange and commissary management practices and on the feasibility of achieving a $2-billion cut to appropriated funding for resale over a five-year period. The House also sought to trim $45 million from commissary operations accounts from the $696.5 billion bill. The Senate’s version of the bill (S.1519), meanwhile, sought the repeal of a controversial moratorium on A-76 competitions, and concurred with the House on funding a long-planned replacement commissary for Panzer Kaserne in Stuttgart, Germany. The Senate’s accompanying report included the President’s full budget funding amount for commissaries.

Significant in the House proceedings was the striking out of a provision from the Rules Committee print of the House Armed Services Committee (HASC) bill seeking the establishment of “patron advisory boards” on military installations. Instead, the House replaced the section with an amendment submitted by Rep. Garret Graves (R-La.) requiring the Pentagon to produce a report on the management practices of military commissaries and exchanges, and a cost-benefit analysis on reducing the costs of operating military commissaries and exchanges by a total of $2 billion during fiscal years 2018 through 2022. Alongside that, however, it specified that a further goal of the cost-benefit analysis would be “not raising costs for patrons of military commissaries and exchanges.” The report would be due within 180 days of the bill becoming law.

Brown Takes Command of CGCSC, CGX


• CHESAPEAKE — In a change of command ceremony presided over by Rear Adm. Matthew T. Bell, Jr., USCG, commander, Coast Guard Personnel Service Center (CGPSC), Capt. Bruce C. Brown, USCG, took command of the Coast Guard Community Services Command (CGCSC), which has oversight of the Coast Guard Exchange (CGX) and the Coast Guard Morale, Well-Being, and Recreation (MWR) Program.

Conducted before the assembled company of the command, the June 30 ceremony here at CGCSC headquarters saw Brown — who had previously served as commanding officer at USCG Base Elizabeth City, N.C. — relieve Capt. Robert L. Whitehouse, USCG, who had led CGCSC since June 27, 2014 (see E and C News, July 2017). Brown had been promoted to captain after passing command of USCG Base Elizabeth City to Cmdr. Randy Meador on June 23.

“I am honored to serve with each of you,” Brown wrote members of CGCSC/CGX and MWR shortly after taking command. “I look forward to meeting and learning from all of you and working together to execute Community Services Command’s many missions.”

Pentagon to Stand Up CMO Organization, Explore Enterprise Delivery Model


• WASHINGTON — A sweeping transformation of systems, processes and personnel is slated to revamp the Defense Department’s research, engineering, acquisition, sustainment, logistics, business and information technology (IT) activities over the next year. It is also expected to affect ongoing exchange-related business optimization efforts.

In an Aug. 1 congressionally mandated report, the Pentagon announced plans to elevate its Deputy Chief Management Officer (DCMO) into a Chief Management Officer (CMO) billet, effective Feb. 1, 2018, separating CMO duties from the Deputy Secretary of Defense and giving the CMO directive authority over the military departments and all other Department of Defense (DoD) components, consistent with the position’s responsibilities for the business operations of the department.

The proposed new CMO organization is tasked with “reforming” operations within DoD’s business lines into systems with a departmentwide approach, by taking “explicit action” to shift DoD business operations to “enterprise services” from “the current military department and defense agency ‘stovepipes’ to a whole-of-DoD alignment.”

DeCA Sales Directorate’s Jones, Dowlen, Villeneuve Set to Retire


• FORT LEE — The Defense Commissary Agency (DeCA) recently confirmed that three of its long-serving Sales Directorate (SD) executives Deputy Director of Sales Gordon Jones, Charles Dowlen, who is the category manager for Meat and the acting category manager for Deli, Bakery and Fresh Seafood, and DeCA Dairy Category Manager Steve Villeneuve — will all retire at the end of the government fiscal year, Sept. 30.

As this issue went to press, the agency had not yet announced who would be replacing them in their respective positions.

The three executives totaled more than 100 years of commissary experience. All three began their commissary careers prior to the formation of DeCA in 1991.

DeCA Announces 2016’s Best Commissaries


• FORT LEE — In early August, the Defense Commissary Agency (DeCA) announced its 2016 Best Commissary Award winners and second place finishers. According to the agency, the annual competition honors stores that have surpassed the criteria it has set forth related to customer service, accountability, safety, operations and sales.

“Congratulations to all the winners,” said Acting DeCA Director and Chief Executive Officer (CEO) Michael Dowling. “They serve to remind all of us in DeCA that it’s not only our goal, but our privilege to provide a premiere commissary benefit to our patrons around the world, and that excellence is attainable through our passion and teamwork.”

The awards are named in honor of American statesmen who championed qualityof- life issues for the military community.

DeCA Historian Skirbunt Announces Retirement


• FORT LEE — Dr. Peter Skirbunt, the historian of the Defense Commissary Agency (DeCA), has announced his retirement. His last day with the agency is Sept. 30.

Skirbunt — who has a doctorate in History, with an emphasis on American Military History, from Ohio State University — has been with the agency in Public Affairs, later Corporate Communications, since the beginning of its existence in October 1991. Prior to that, he had been the historian at the Air Force Commissary Service (AFCOMS), one of DeCA’s predecessor commissary organizations.

In his position as historian, Skirbunt served as the historical advisor to DeCA leadership, functioning both as the agency’s historical expert and also as a representative at government and historical ceremonies and events.


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Meat Snacks Driving Growth


Randy Demster, AAFES Buyer, Direct Store Delivery (DSD), Dry Grocery, Meat Snacks, Bakery

A variety of direct store delivery (DSD) categories overseen by long-time Army & Air Force Exchange Service (AAFES) Buyer Randy Demster have continued their momentum from last year through the first half of fiscal 2017.

Demster reported that dry grocery, meat snacks and bakery segments combined “are showing strong performance” in comparison with AAFES overall sales growth. Through July 2017, year-to-date sales for these areas were $42.5 million, a 5.4-percent increase from the prior year.

As the Better-For-You category has grown, McLaughlin said customers are wanting more options such as organic, gluten-free, and no-soy. “Consumers are now able to find Better-For-You options in more categories such as confections, salty snacks, jerky, and dairy. The ease of shopping the category has also changed throughout the years. Consumers can now go to their local grocery store or C-store to purchase Better-For-You products, and it is no longer viewed as a specialty shopping choice.”

The main drivers have been “larger-pack types of meat snacks and our expanded baby assortment that we introduced in February 2017,” Demster said.

Demster added that healthy snacking options “are also growing in popularity, and especially among millennials.” ...



Select Subcategories Trend Up


Probiotics, letter vitamins and the ready-todrink (RTD) subcategory have been trending up this year in Navy Exchange Service Command (NEXCOM) stores, bucking some sales erosion stemming from a private label product recall and encroachment by large online vendors.


Jocelyn Cateternam, NEXCOM’s buyer for these areas, noted that year-to-date fiscal 2017 sports nutrition and supplement sales in NEX stores were running about 9 percent below the prior year.

“Much of our decline is coming from a combination of production issues, product recalls, and much like what other categories are experiencing, the ‘amazon.com effect,’” she said. “Unfortunately, sports nutrition is not an exception when it comes to the impact that amazon.com has had on all brick-and-mortar retailers.

“The competitive landscape has drastically evolved in the last five years. More retailers have shifted a greater focus on health and wellness and have expanded their product offerings giving customers more options to shop. Ultimately, this becomes a challenge for every retailer, as we all compete for the customers’ wallet share.” ...






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