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Drank to be distributed in western South Carolina

BY Allison Cerra

HOUSTON Innovative Beverage Group announced that the company has entered into an agreement with South Carolina-based Modern South Distribution to expand the reach of the company’s signature relaxation beverage Drank throughout western South Carolina.

Currently, Modern South distributes household name food and beverage products including Calypso Lemonade, Liquid Ice Energy Drinks and Tillamook Beef Jerky, to some of the largest stores in the area including Walgreens, Piggly Wiggly and Gazbah.

“At Modern South Distribution we pride ourselves on bringing top-of-the-line products to every store we work with,” said Christopher Selinger, VP operations for Modern South Distribution. “Relaxation beverages are among the hottest trends in the beverage industry today, so in making this decision, we knew we had to go with a real crowd pleaser. With its great taste, Dank is not only the leader in the calming beverage category, it’s a customer favorite.  Adding this product to our lineup is a great decision for both parties.”

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Rx chains give food depts. fresh start with perishables

BY Barbara White-Sax

Food is an important business for the drug channel; National Association of Chain Drug Stores estimates suggested the category represents nearly 20% of front-end sales. While drug chains have steadily expanded their shelf-stable, refrigerated and frozen sections, they have largely stayed away from perishables, leaving the challenges of daily delivery of fresh-food products to other channels.

Now a few innovative chains are testing the waters in the fresh-food category. New York City-based Duane Reade has significantly expanded food at its 16th Street and 8th Avenue location in Manhattan. Food now comprises about 40% of the 15,000-sq.ft., two-level store. Offerings include fresh sandwiches, single-serve entrees, baked goods, freshly packed deli meats, freshly packed salads and vegetables, and self-serve Starbucks coffee.

The frozen food section also has been expanded in the store to 500 SKUs of frozen convenience foods—from frozen burgers and frozen chicken breasts to frozen vegetables and appetizers. A front-of-store island contains fresh sandwiches, microwavable pasta, macaroni and cheese, soups, bagged salads, packaged celery and carrot sticks, and fresh fruit. The soups and ready-to-eat entrees carry Duane Reade’s DR Delish brand label, which has been vastly expanded this past year

The fresh-food section also contains such fresh-baked goods as croissants and muffins, and produce that is delivered every day to the store. That’s easy to do in such a concentrated market area as New York City. At least 10 stores have extended food departments, and the chain plans to roll out the concept to more locations based on market demographics.

Walgreens, which recently purchased Duane Reade, will be carefully studying the strategy as it plans its own fresh-food expansion. Earlier this year, Walgreens hired grocery and convenience- store veteran Jim Jensen as its divisional merchandise manager for fresh foods. “We’re looking to add convenience for our customers,” said Walgreens spokeswoman Tiffani Washington. “Currently, a few hundred of our stores offer meal-to-go options, such as fresh fruit and salads, and we will be looking at rolling that out to more stores.”

Washington said that under Jensen’s direction, the chain would be looking at where expanded offerings make sense. “It has to be managed on a very local level, and selections will not always be the same from market to market. Duane Reade has done very well with fresh food in the ultimate urban market, and we can learn a lot from their experience,” she said.

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Ice system co. proposes heating up profit margins

BY DSN STAFF

SHEBOYGAN, Wis. —Ice is a high-margin business, but one the drug channel has not embraced. A new system, the Ice Gourmet, is out to change all that. The company wants to create a brand for ice, change the way it’s distributed and increase retailers’ margins in the process.

“Historically, bagged ice has been the No. 1 margin category for retailers with margins as high as 100%,” said John Williams, president of San-I-Vend, creator of the Ice Gourmet system. “But there are problems with the way ice is bagged and distributed. Consumers view it as a commodity product.”

Gourmet ice cubes are solid, block cubes that are made with purified water. The cubes have been covered by Food & Wine and Gourmet magazines, and are “hailed by bartenders for their slow melting qualities,” Williams said. The cubes don’t congeal with other cubes to form that giant mass of ice consumers are accustomed to getting in a bag.

The Ice Gourmet system brings production to the retailer with a backroom unit that includes a commercial ice-maker, along with a standard point-of-sale ice freezer. The ice-maker has a 30-in. by 30-in. footprint—not much bigger than a soda vending machine. The front-of-store freezer is 2 ft. to 3 ft. wide, depending on the model.

Store employees make ice as needed. “Anyone can be trained to make ice, and the ice bags can be filled in seconds,” Williams said.

The product also can retail at a higher price because it no longer is viewed as a commodity item. That means margins can be 200% to 300% on a product that normally retails for less than $2 a bag.

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