Greg Ferrara took the helm as the National Grocers Association (NGA) president and CEO at the start of September, succeeding Peter Larkin. Previously NGA’s chief lobbyist, Ferrara brings his spirit of advocacy for independent grocers to his new role of leading and growing the organization, bolstering support for members, and helping them and this critical food retailing sector to prosper. Supermarket News Senior Editor Russell Redman got a chance to sit down and talk with Ferrara at the 2020 NGA Show in San Diego, and it’s clear his passion for independent grocery will go a long way in helping members address today’s challenges and opportunities. Here are excerpts of the interview.
SUPERMARKET NEWS: How has your term as NGA president and CEO gone thus far?
GREG FERRARA: So far, things are going wonderful. We're lucky to have a membership that is so engaged. They are so supportive and passionate about NGA, the organization and serving our members. Work is not really work. We have fun. I have an amazing team. And we're growing. The organization is incredibly strong financially and membership-wise.
SN: How many members does NGA have now?
FERRARA: We have around 1,500 member companies, which right now represent 8,500 storefronts. That includes members from Hawaii and Alaska to Maine and everywhere in between, all 50 states and in Puerto Rico.
SN: What do you see as some of the major themes of this year’s NGA Show?
FERRARA: Every year brings different developments that stand out. There's good energy this year. The economy is doing well, so I think a lot of people are interested in doing, to making investments in their stores and in their companies. That's really a good thing.
And education. What I'm most proud of, I think, about NGA -- the NGA show in particular – is we don't create our education in a vacuum. One, we listen to member surveys and the attendee surveys, and we really scour those things and get feedback from everyone who fills them out. Then we have a show planning committee that we bring together – including exhibitors, retailers, wholesalers and a lot of folks in between -- in the summer to start planning things like education. The education we do is diverse and reflective of what our members are looking for and what they need. And it’s really fueled by retailers and wholesalers as well. In terms of educational themes, it’s everything from meat to technology to people development. Independents can come in and get exposed to so many different sessions and take information back that's actionable, which is great.
SN: How would you describe the state of things overall in the independent grocery retail sector? How's it performing and what are its growth prospects?
FERRARA: I'm very bullish on independents. Our industry is obviously going through change. But change is good sometimes, and that's important to remember. As the marketplace continues to change independents are going to be really well-positioned to take advantage of that. They are the ones that have diverse stores. They have formats that are not cookie-cutter. They are unique and well-positioned to serve the communities they are in. They are nimble and able to diversify the product mix based on the store location, as opposed to a national chain approach where everything has to be the same standard set.
So I think there are tremendous opportunities, and customers are looking for that. Customers are looking for local; they are looking for main street. They're looking for that unique experience, and independents can take advantage of that. I'm really excited about the future.
SN: In some ways, chain stores are trying to incorporate some of the strengths of independents by differentiating their stores and getting closer in to customers.
FERRARA: A lot of independents are already positioned for those markets. Their stores are right-sized for the neighborhoods that they're in, for the most part. And I think that's great. What's neat about NGA is that we define independents by ownership, so we have a very diverse community of retailers. We have single-store operators. We have multi-store operators with five, 10, 15, 20 stores. And we have a large number of members that have 100-plus stores.
We’ve seen some of those companies continue to grow, and NGA has been helpful and supportive of that. And then we've had other members that have come into the organization, including some regional operators, and said, ‘Hey, we might be large by some standards. But you guys are doing a really good job in serving private businesses, and we want to be part of your community.’ So we've been really excited about that growth and bringing in new people into the organization. And our numbers reflect that.
NGA's Greg Ferrara (right) talked with renowned presidential historian Doris Kearns Goodwin in a Sunday evening presentation at the NGA Show. (Photo by Russell Redman)
SN: What do you see as the biggest opportunities and challenges for independent grocers today?
FERRARA: The challenges first. The pace of change continues to be fast. Technology continues to be a disruptor, and staying ahead of that curve is really difficult to do, even for large companies. The show provides a great opportunity to be exposed to all the latest and greatest technology out there. But it takes work to spend the time to educate yourself and understand what's going on with that pace of change.
NGA is a great resource to help independents be part of the opportunities. We are in a really neat place in our country, where there is this growing passion and, I think, realization of the importance of community and the importance of main street. And main street could be a neighborhood in a large metropolitan area, rural America and everybody in between. Consumers today, particularly Millennials, are very aware of local [retailers] and want to support locals. So independents are well positioned to take advantage of that. John Ross [president] of IGA talks about this a lot. He really does a great job. As an example, IGA stores are about local as you can get.
What independents need to do is to capitalize on owning the local brand and being the community store. A lot of our members are very humble. But sometimes you've got to lean in to show who we are and take advantage of the opportunities. And that's powerful for us on a national level, dealing with Congress, to be able to go and say, ‘OK, we are local; we are that community store. Our members elect you, and their officers aren't 12 states away. They're in the community.’ That's important.
SN: Earlier, you mentioned disruption. How are independent grocers adapting to the rise of e-commerce and the need to develop an omnichannel model?
FERRARA: Today, you need to be able to serve your customer when they want to shop and how they want to shop. It might mean that they are using clickand-collect for some purchases and then coming into the store for other purchases. So we need to be flexible to serve that customer. I've never been a believer that, you know, the brick-and-mortar store is going away. I don't think that's reality or that's what's going to happen. But in the presentation this morning on next-gen stores, they did a great job talking about how stores have to become experiences, and you need to capitalize on what you do really well. If that is fresh, then create an experience. An experience might also be phenomenal customer service or fresh-prepared foods. So it’s about how do you create that experience, that area of differentiation that brings customers into the store?
SN: Before you became NGA president, you were the chief lobbyist. What are the leading issues for independent grocers right now? What are they most concerned about?
We look at things both in terms of threats and opportunities. On the opportunity side, there's a lot going on with what we call Farm Bill-type issues, such as nutrition programs, some, whether it's SNAP, WIC [Special Supplemental Nutrition Program for Women, Infants, and Children], Double Up Food Bucks, which we are doing a lot of programs on here today. And then you move into things like emerging products, such as CBD. We've been very engaged with CBD and making sure that our members are able to serve customers with legal product and that we're working with federal agencies and Congress to make sure our members are not penalized because the agencies haven't released regulations at this point in time.
The other thing for us is always looking at those business issues. There are tax issues. We need to finalize the tax reform that we're putting into place. We've got some technical corrections, and they need to get done. This is a big issue. Pharmacy DIR [direct and indirect remuneration] fees. Over 3,000 independent groceries have pharmacies in their stores, and these are community pharmacies. These are local pharmacies. You talk about rural America, and that’s big issue. I think what's frustrating is that there’s bipartisan recognition that it needs to be addressed, and Congress is just almost lethargic in getting something across the finish line.
SN: What's going on with QIP, making qualified improvement property eligible for full and immediate expensing?
FERRARA: That’s another frustrating issue. There’s bipartisan recognition that it was a technical correction. It is not really controversial. But because it’s Washington and because we're in an election year, there’s nasty politics involved. So it’s like, ‘Yeah, we know we need to get it fixed, but we want to see how much concessions we're going to get from the other side to fix it.’
And so, effectively, you've got Congress using main-street businesses as political pawns. Some of these elected officials are really talking out of both sides of their mouth. You can't say you support business, small business and main street if you're not willing to fix issues like that. So we're going to continue to push and educate. We're storytellers. We grew up on Capitol Hill, and we share what our members do in their communities and the investments they're making in their businesses. A lot of people here [at the NGA Show] are likely going to be buying equipment and fixtures that to invest in their stores. Let's not penalize them for that.
SN: How much of an impact has this had on retailers trying to make store improvements?
FERRARA: We have some members who have shared with us that they have actually foregone purchases and investments in new refrigeration or other products because this issue hasn't been resolved. And they don't necessarily have the confidence that Congress is going to get a fixed. There are others who are kind of crossing their fingers and their toes and hoping Congress gets this thing fixed. It needs to be addressed.
SN: Grocery retail is a tough business. What advantages to independent grocers bring to the table in terms of competing with the bigger players?
FERRARA: I think, for independents, it's that entrepreneurial spirit. And I think that's an opportunity for CPG [consumer packaged goods] suppliers. There are advantages to working with large national retailers. But when you work with an independent, you're able to get really specialized execution -- maybe a certain demographics and markets that you're trying to grow or a program that you want to roll out quickly. Independents are faster and nimble. They're entrepreneurs. We have associate members [suppliers] that have found tremendous success in working with independents. One associate member told me a number of years ago, ‘We were flat over the past year in terms of growth except for our business with a certain independents because we were able to go to them and do programs and execute and work together collaboratively.’
We're lucky to have a lot of associate members that engage with us and with our members. They know our members, and they have relationships. That's really the thing about NGA. We're the convener. We're able to bring everyone together throughout the year and bring the opportunities so that the associate members and our retailers and wholesalers can collaborate and grow together.