The year 2022 was an incredibly eventful year. It was a year full of challenging world events, economic difficulties and the ongoing recovery from the COVID-19 pandemic. The year presented unprecedented challenges for Associated Food Stores’ (AFS) member retailers and team members, including the tragic passing of President and CEO Bob Obray.
Bob died peacefully at home as a result of a rare neurological disease on August 9, 2022. Following Bob’s passing, the AFS family stood together to honor, respect and celebrate Bob as a leader, colleague and friend. Bob’s vision, direction and commitment to Associated Food Stores, its member owners, team members and partners continues to have an enduring impact on the company and on team members individually.
In September, the AFS board of directors announced that David Rice accepted the position of president and chief executive officer of Associated Food Stores. Along with the announcement of a new CEO, there were several other key organization and leadership changes:
- Roger White as executive vice president and chief operations officer
- Travis Boman as executive vice president and chief financial officer
- Justin Atwater as executive vice president and general counsel
- Darin Peirce as ARO president and senior vice president of retail
- Glen Keysaw was added to the AFS Executive Team and remained as vice president of distribution
These team members, and those who work with them, made tremendous contributions to the company’s success in 2023 and it is expected they will continue leading the company to even greater heights as the organization moves forward.
Vote for Other Top AFS Stories of 2022
With Bob’s passing and subsequent leadership changes as an obvious top story of 2022, the following summaries highlight some of this year’s other major happenings. Please review the many accomplishments and help name AFS’ top stories of 2022 by completing the quick poll at the end of the article. Additionally, there is a place to submit any top stories not currently on the list. The results will be announced in early January.
Wholesale operations will exceed $2 billion in sales by year end, which demonstrates how well the company’s member-owned retail stores performed. Associated Food Stores set an all-time weekly sales record in November. With more than $49 million in wholesale sales, the week’s totals exceeded the previous record by $2.7 million. Year-end totals will be reflected in AFS’ upcoming annual report.
Warehouse modernization is Associated Food Stores’ initiative to ensure the Farr West Distribution Center remains a full-service, state-of-the-art facility both now and in the future. The multi-million-dollar project was approved by the AFS board of directors in December. Automation will play an integral role in the revolutionary project. Warehouse modernization leads to important benefits throughout the company including:
• Increased speed, accuracy, and efficiency throughout the organization.
• Alleviate unavoidable labor challenges.
• Enhanced ability to meet the increasing demands of retailers and their customers.
• Improved efficiency for retail team members. As an example, pallets will arrive based on store schematic to save both time and labor expenses.
AFS plans to fund the warehouse modernization project with a combination of existing cash reserves, operating cash flow generation and bank financing and is forecasting no negative impact to member patronage rebates (residual rebates or otherwise) because of warehouse modernization. The company considers warehouse modernization a significant investment foundational to the future of “One Associated” that is fully expected to generate future returns for its member-owners.
With ever-increasing labor challenges, along with continual needs for scale and consistency, the AFS and ARO delicatessen teams progressed with a new commissary in 2022. Commissaries are commercial-grade cooking and storage facilities that are utilized by food service providers for large-scale product preparation and storage. The centralized production initiative reached a major milestone in the fourth quarter as sales of products produced through the partnership with local provider Tall Hat eclipsed $1 million.
Members of Associated Food Stores saw significant growth in 2022. Lee’s and Harmons opened new stores and many others made noteworthy remodels and improvements. As AFS members strive to meet the needs of their communities, financial success follows and many members have experienced record-setting results as they continue their commitment and dedication.
In 2022, Associated Food Stores was thrilled to announce it now has member owners in New Mexico. Two Farmers Market stores, owned by Matt, Michael and Grant Pennington, along with Deborah Vavra became members of AFS. Farmers Market is a third-generation owned independent grocer.
Associated Retail Operations (ARO) continued to see records fall in 2022. ARO recently reported it was at 95.8 percent of its stretch sales goal for 2022 with expectations to achieve the goal during Christmas week.
Macey’s soft-opened its twentieth store at in Eagle Mountain, Utah on Wednesday, May 18 and customer response was incredibly positive. As a licensed store owned by the Ridley’s organization, the store follows all business operations in accordance with Macey’s policies and procedures, with the Ridley’s organization maintaining ownership.
In addition to sales accomplishments, ARO has made significant progress in improving its branding and facilities. In 2022, Macey’s developed options to enhance the logo, typefaces, colors and textures that are used consistently in store and in marketing and advertising efforts. The new elements will fully debut in the Jeremy Ranch store which is anticipated to have a re-grand opening following a remodel in late 2023.
Lin’s also made several extraordinary improvements through highly strategic “small ball” projects leading to widespread results for the Southern Utah stores.
At Associated Food Stores’ annual meeting on April 5, Brent Foulger, vice chairman of the board of directors, announced this year’s election results. Two new retailers were added to the board of directors. Chris Gentry, from Madison Foods in Ennis, Montana, and Paula Simerly from Simerly’s in Wendell, Idaho were elected to the board.
AFS has a long tradition of holding regional meetings throughout the company’s trade area to ensure AFS Members and AFS Executive Team members have frequent interaction. Two years ago, the meetings were interrupted by COVID-19, but the events were back for the second year in a row and participation was high. The meetings allow member retailers to make suggestions, ask questions and receive updates on AFS’ key initiatives.
New Vistas, a process AFS launched in 2022 to help member retailers better understand their unique opportunities, build plans, provide resources and make progress on their journey toward better business performance, paid off for participating retailers. Many retailers used the available resources to reinvest in their businesses and teams with impressive results.
KeHE Distributors®, Associated Food Stores’ partner for natural, organic, and specialty products, held its holiday show in June in Chicago, Illinois. As part of the event, Mindy Rich, vice president of analytics and consumer insights at AFS, was invited to be a featured guest in a panel discussion about empowering women in the workplace. Mindy participated in the panel with three brand owners as well as Laura McCord, KeHE’s executive director of sustainability and corporate responsibility.
Senator Mike Lee, along with some of his staff members, visited the Farr West Distribution Center on October 12. Senator Lee spoke with members of the AFS executive team and with team members throughout the facility.
Later in the fall, the National Grocers Association (NGA) testified before the Senate Antitrust Subcommittee on the proposed Kroger-Albertsons Merger. Senator Lee was extremely sympathetic to the concerns voiced by NGA. He specifically called out Associated Food Stores during the hearing and gave the company credit for being a great organization.
The AFS Pharmacy aggregation transitioned 340 pharmacies from McKesson to Cardinal Health from one day to the next. On March 1, AFS and its participating retailers started a five-year relationship with Cardinal after being supplied by McKesson for 10 years.
The move was a part of the Topco Aggregated Pharmacy Initiative (API) bid process that was completed last year with the objective of not only providing our pharmacies stronger economics but forging a relationship with a supplier whose strategy was more aligned with Topco’s goal of helping its member partners survive in an increasingly challenging operating environment.
As consumers battled inflation, private-label products continued to be a welcome opportunity for shoppers to save money without sacrificing quality. Associated Food Stores’ Exclusive Brands saw impressive sales results in 2022, including growth of AFS’ internally developed Red Button Vintage Creamery and Beehive Bread & Pastry Co. brands.
In addition to the notable sales growth, the first official Red Button Vintage Creamery treat shop was opened in the remodeled Provo Macey’s.
In 2022, Associated Food Stores made major improvements to its retail and team communications. StoreLink, the company’s extranet site for retailers, was relaunched making the site more accessible, searchable and current. Headlines, a new and popular retail-focused newsletter, allowed AFS to keep retailers updated on the latest news. Communication with team members was also enhanced with greater use of video, email and other relevant platforms.
During the time most impacted by COVID-19, Associated Food Stores cancelled some of its long-time company events to keep the team safe and healthy. In 2022, the team welcomed back many of the beloved activities that make Associated Food Stores a special place to work including the annual FoodShow and annual meeting. AFS is proud to work with retailers and employ a diverse team from all walks of life. Company events allow retailers and team members from around the company to meet, interact and learn more about each other.
Throughout November, guests at Macey’s, Dan’s, Dick’s Market, Lin’s and Fresh Market were asked to donate to the Utah Food Bank at check out through the stores’ Harvest of Hope effort and they responded—combining for a total of more than $240,000. In addition to these stores, hundreds of AFS member-owners also participated and the results of their contributions will add to the incredible total.
On October 18 and 19, the AFS technology and marketing teams hosted several of the company’s key shopper-facing technology partners in Salt Lake City. Technology partners included BRdata, eComSystems, Rosie/Instacart, and RORC in this first-of-a-kind gathering. The goal for the meeting was to bring these important partners together to align visions around the shopper experience AFS is building for its member retailers, brainstorm and challenge one another on opportunities and prioritize development paths to help the group quickly move together as a cohesive team.
After reviewing the top stories of 2022, it’s now time to vote for the top five. Click here to vote or submit any stories not currently on the list.