Associated Food Stores - The National Chicken Council

ASSOCIATED FOOD STORES
Serving our Customers
Since 1940
Associated Food Stores
1.2 Million Square-Foot Warehouse
Farr West, Utah
2013
ASSOCIATED FOOD STORE
Associated is a Grocery Co-op with 500
member stores and 44 corporate owned stores,
in eight western states.
 We are a small 2 billion dollar full service
grocery distributing company.
 We are owned by our retailers whom are all
independent grocery store operators and
entrepreneurs.

ENTREPRENEURS
LOGISTICS

Our trucks log more than 10 million miles per year.

This would be the equivalent of circling the earth once
each day.
AFS Market Area
Utah-Idaho ACV Shares by Retailer/Supplier
Winco
(14 Stores)
6.7%
+0.4
URM
(40 Stores) Target
Other
(6 Stores)
3.2%
(71 Stores) +0.2
2.0%
6.0%
+0.1
+0.7
Wal Mart
( 60 Stores)
26.3%
-4.6
SuperValu
(41 Stores)
9.3%
+0.5
Kroger
(62 Stores)
20.4%
+1.2
AFS
(198 Stores)
26.1%
+1.4
Fresh Mkt
5.6%
(26 Stores)
-0.5
TDLinx Universe Data - 52wk Dec 2011 Open Stores Only - Supermarkets $2MM+
ARS
4.9%
(21 Stores)
+0.7
Harmon's
4.4%
(16 Stores)
+0.5
OTHER: Small Suppliers, Military, Safeway, Super Saver, Grocery
Outlets, NPS, Astd. Hispanic and Astd. Natural and Organic Markets
ASSOCIATED FOOD STORES ARE VERY DIVERSE
AND REQUIRE DIFFERENT MARKET STRATEGIES
We have stores in resort areas such as Sun Valley,
Jackson, Aspen , Moab, and Park City and others.
 The bulk of our stores are compete with Wal-Mart,
Kroger, Costco, Sam's Club, and Winco.
 We have to have multiple formats to service all of
the different customer bases in which we do
business.
 Our biggest issues is all of these stores want to be
different.

COMPLEXITIES OF MULTIPLE FORMATS
Beef: 9 different lines of beef.
 Pork: 3 different lines of Pork
 Multiple lines of seafood fresh and frozen
 Five different lines of fresh tray pack poultry
which includes Organic and ABF chickens
 2 full lines of 40# bulk chicken
 Generally, we have 3 different lines of IQF
chicken

POULTRY IS A HUGE PART OF OUR MEAT
BUSINESS
Eleven full trucks of fresh chicken weekly
 Three trucks of frozen chicken weekly
 Four trucks of fresh deli chickens weekly
 Eighteen to twenty truckloads of chickens go
through our warehouse each and every week

SOME OF OUR BRANDS
GOLD’N PLUMP
JUST BARE CHICKEN
PILGRIM’S PRIDE
SMART CHICKEN
VALUE ADDED CHICKEN
BUTCHER BLOCK
CURRENT AFFAIRS

Chicken sales are still strong but they are down
in tonnage with our business for the first time
in several years.
 Chickens
are up in dollars but off in tonnage as
much as -10% in some categories. First year in our
history chicken tonnage is down.
 Prices have increased as much as 35% from a year
ago on our #1 item bulk boneless skinless breasts.
 Have stagnant protein sales finally caught up to
chicken?
CHICKEN OPPORTUNITIES
Retail fresh beef case is shrinking
 Boneless skinless chicken breasts are the new
ground beef.
 Strong interest in organic and truly natural
chicken
 Chicken still has convenience in preparation
and meal options
 Chicken is still the value in the protein category

SHRINKING BEEF CASE

Retail grocery stores are shrinking their beef
case linear feet.
 Beef
is becoming unaffordable to some consumers.
 Beef is too expensive to shrink.
 Beef category is losing some of the different cuts
because consumers don’t know how to prepare
them.
 Shopper cooking knowledge is marginal at best
BONELESS SKINLESS BREASTS
Ground beef used to rule the meat case, 85 %
of consumers used to buy ground beef.
 Today boneless skinless breast have become
the # 1 protein item out of our warehouse.
 They have the same attributes, they can
produce multiple dishes, ease of cooking, and
both are convenient.

ORGANIC AND ABF CHICKEN
Strong interest in Organic protein and Chicken is
by far the cheapest way to get there.
 Our organic chicken line is up 32% over last years
sales.
 ABF or natural chicken is enjoying great sales in a
lot of our stores.
 Consumers have a desire to connect to the
producer and I believe this is how they think they
can get there.
 But these Organic and Natural products have to
perform or they will not succeed.

CHICKEN IS STILL A VALUE
Boneless skinless chicken breasts is the
number one protein item we sell out of our
warehouse by double, to its next competitor 80
lean ground beef.
 However, average selling price on boneless
skinless breasts is $3.78 as opposed to lean
ground beef at $3.39.

CHICKEN CHALLENGES
“BIG BIRD”
EVERYTHING IS GETTING BIGGER









Beef is bigger
Pork is bigger
Chickens are bigger
Technology is imperative in animal agriculture
The Beef People have a great story. We have the smallest
inventory of cattle as we have had since 1955.
Fortunately with the same amount of cattle we now produce
twice as much beef.
Produced 13.2 billion pounds in 1955
Produced 27 billion pounds in 2012
At the same time they use 6% less corn, 63% less grass.
WHAT DO WE DO WITH THESE BIGGER
ANIMALS?
The Beef people are coming up with new ways
to cut their products. “BAM” Beef Alternative
Merchandising. “Beef Value Cuts”.
 Pork is getting bigger they are changing the
name from a boneless pork chop to a Rib Eye
Pork Chop, and New York Strip Chop, T-bone
Chop.
 What can we do with those 14oz. to 16 oz.
boneless skinless chicken breast halves?

WE DESPERATELY NEED LONGER SHELF LIFE'S
FOR CHICKEN
Fresh chicken has the shortest shelf life of all
of the proteins with exceptions of a few seafood
items.
 Shrink numbers are probably higher on chicken
than all of the other proteins.
 We are getting as much as 28 days on fresh
tray pack beef and pork. Why not on fresh
chicken?

HELP ME HELP YOU
Help Me figure out what to do with the Big Bird
 Help Me keep a value protein in the meat case
 Help Me get a longer shelf life for chicken
 Help Me fill my trucks with out any interruption in
supply
 Help Me tell consumers about happy chickens,
don’t give us any surprises. (LFTB)
 Help me feed people with poultry and make a
profit, and I will show you the money.
