Hawaii Retail Grocer

By STACY YUENThere’s a Japanese expression “okage sama de”– used to express one’sgratitude for others and theworld around us. It’s a phrase steepedin humility, and a belief that one ishere today not due to one’s actionsalone, but by virtue of the supportfrom others. This value was broughtto Hawaii by Japanese immigrants,including KTA Super Stores founderKoichi Taniguchi, when he arrived inHawaii from Hiroshima in 1907.“The phrase means ‘thanks to you –we are what we are because of you. Allof our gratefulness should go to you,’”explains Toby Taniguchi, KTA’s company president and chief operating officerand great-grandson of Koichi Taniguchi. “My great- grandpa had a strongbelief that it was important to humblyserve the people of our community.”And that philosophy is stronger thanever today at KTA.Taniguchi said his great grandfather’sbusiness philosophy hasn’t changedmuch over the 102 years since Koichiand his wife Taniyo opened a modest 500-square-foot grocery and drygoods store in 1916 in Waiakea Town.At the time, the couple had no ideatheir little store, then called K. TaniguchiShoten, would someday evolve into amulti-store supermarket chain, nowemploying approximately 870 associatesat seven locations across the Big Island.Toby Taniguchi, Sandy Taniguchi, Barry Taniguchi, Ryan TaniguchiNo stranger to voluntary service,Taniguchi is deeply involved with theBoys & Girls Club of the Big Island, TheFood Basket – Hawaii Island’s FoodBank, Junior Achievement, Friends ofNELHA (Natural Energy Laboratoryof Hawaii), the Hawaii EmployersCouncil where he served last year aschairman, HEMIC and Parker Ranch.Although now comfortable in KTA’sleadership role, being a part of thefamily business wasn’t something hehad always envisioned.As a student at Hilo’s WaiakeaHigh School, Taniguchi opted towork outside of the family business,bussing and waiting tables at a localrestaurant through high school. Aftergraduating in 1989 he headed to thePacific Northwest where he went onto earn his Bachelor of Science degreein Communication Management fromthe University of Portland.He remained in Portland where he– Toby Taniguchi, President/CEO, KTA Super Storesgained different perspectives while doing a variety of jobs, including desktopFood Industry Association. He sayspublishing, an industry that has alwaysThe business has endured naturalhe feels strongly about the HFIA’sintrigued him. But one day, his futuredisasters, world wars, recessions andtook a different turn.uncertain times. The household name mission to actively promote theinterests of Hawaii’s food and bev“I remember when my directionon the Big Island is a beloved comerage retailers and suppliers throughchanged. My dad (Barry Taniguchi,munity fixture and has experiencedhighly effective government relationsKTA’s Chairman and CEO) had comesteady growth in the past century.and advocacy, member education and up to Oregon for my sister’s collegeTwenty years after the opening ofindustry and community relations.graduation. I was thinking about makthe first store, the Taniguchis opened“I want to listen and hear from other ing a change and we had a talk. I askeda branch store in Downtown Hilo.members about what’s important toif there might be a place for me backIn 1946, the devastating tsunami thatthem, but we need to make sure we’re home at the store.”struck Hilo destroyed the originalmeeting our mission,” says Taniguchi.And the rest is history.Waiakea Town store.Taniguchi moved home to the BigHowever, the business, like the com- “I’m really looking forward to beingIsland in 1995 and started working atinvolved in this manner.”munity it serves, persevered.“There aren’t a whole lot of organizations that make it to 100 years,” saysTaniguchi. “I’m really happy and humbled to work for a company that wasfortunate enough to sustain itself for solong. I feel a great responsibility to makesure I do everything possible to keep itsolvent and healthy into the future.”Taniguchi gives credit to KTA’s associates, business partners and vendors,that help keep the stores competitivein a fast-changing industry. But he isquick to pay tribute to the values thecompany’s forefathers instilled.As with KTA, Taniguchi’s philosophy is all about service. The self-described “can stacker” embraces hisrole as the new chair of the Hawaii“My great- grandpa had a strong belief thatit was important to humbly serve the peopleof our community.”hawaii F OOD . com 11

Toby and Barry Taniguchi at the grand opening of KTA’s Kealakekua store, April 5, 2018.1 2 H awaii retail g rocer CO N VE N TI O N 2 0 1 8the store doing every job imaginable– cashier, stock, bagger, fish cutterand more.Candid and down-to-earth, Taniguchi says he vividly remembers his firstday working at KTA.“I definitely felt a lot of pressure. Mydad always told me, and it’s understandable, ‘you have to work morethan 100 percent because you’re partof the family. People will be watchingyou. You need to work 105 percent,”he recalls. “So I always tried to makesure I worked productively and safely.That weighed heavily on my mind onmy first day on the job. But we have agreat bunch of associates and I didn’tfeel uncomfortable for long.”Over the course of the next severalyears, Taniguchi immersed himselfinto the business.“I became assistant store director and ran the Waikoloa store forawhile,” he explained. “I’m not surehow it evolved but I believe you havedifferent jobs in life, if you’re lucky,you end up with a career and ifyou’re really lucky, you end up discovering your calling. I don’t think ev-

eryone totally embraces their calling,and at first it was challenging for me,as I didn’t necessarily feel I wanted tobe president. I was happy to be a partof the team. But looking back, I thinkit was my calling to help contribute tothe well-being of our organization. Ihave a responsibility to take care of thebusiness so we can hand it over to thenext generation healthy and solvent.”He often tells younger associatesthat the future lies in their hands.“I’m a generation Xer. I’m hereto steward and try to improve theorganization and keep us solvent,” saysTaniguchi. “But the future lies in thenext generation – the millennials. In thelast couple of years, we have broughtin what I refer to as our ‘young guns’ –they’re extremely talented and have somuch knowledge and information,” hesaid. “On the other hand we also haveassociates with 35 or 45 years of serviceto our company. We want to make surewe honor them and their contributionsand their values and principles thatMG RetailGrocer Summer2018 PROD.pdfbrought usto where we are today. Butat the same time we need to stimulategrowth and look at opportunities fornew and improved ways to service ourcustomers and the community.”The latest such growth is the openingof KTA’s seventh store – KTA ExpressKealakekua – in April of this year.“Opening in Kealakekua is significant. We’re happy to be afforded theopportunity to open in that community and offer growth opportunities forour associates,” he says.The store occupies the formerKamigaki Market, an iconic familybusiness that served south Kona.“Wayne (Kamitaki) and my dad,Barry, are good friends and Waynementioned they picked up the parceland asked if we had any interest in occupying it since it wasn’t particularlysuitable for their hardware operation,”explains Taniguchi. “So we took a lookand thought we could open a storeand bring our products and services tothe community. So we started planning, and a couple of years later weopened the store.”Looking ahead, Taniguchi says1 tries5/5/18PMintentional in hisheto be2:07veryapproach to the business, carefullyanalyzing efforts needed to move for-ward into the future. That intention isreflected in the new Kealakekua storeas the decision was made for it to haveno incandescent lights. Every singlelightbulb is LED.“I visited a very progressive,award-winning grocery store calledMy Fresh Basket in Spokane. It wasthe first store I knew of, to use onlyLED lamps,” explains Taniguchi. “Webrought the idea back and now ournewest store uses LED lighting anduses way less energy.”Taniguchi says with the dynamicchanges in the marketplace, it’s moreimportant than ever to make sure KTAremains relevant and as efficient aspossible to remain competitive.And this philosophy is not something new.Although KTA may have that smalltown community feel, progressivenesshas always been one of its strengths asit is credited with a lot of “firsts” in theHawaii grocery industry. These “firsts”include the introduction of the barcode scanner, self-service meat market,in-store bakery and full-scale deli.“In 2007, when energy prices wereCow-gratulationsand Moo-halo!CMYCMMYCYCMYKBeau OshiroV.P.,V.P., C.S.C.S. WholesaleWholesale GrocersGrocersOutgoingHFIAPresidentOutgoing HFIA PresidentDick BottiHFIAHFIA FounderFounderToby TaniguchiPres.Pres. && COOCOO ofof KTAKTAHFIAHFIA 20182018 NewNew ChairChairhawaii F OOD . com 13

Toby Taniguchi with members of the HTA pharmacy department (from left), Tricia Anderson, Lorna Kahauolopua, Elissa Brown.skyrocketing, I think we were the firstgrocery store in the state to commission a full-blown photovoltaic system,”recalls Taniguchi. “They paid off inabout a year and a half and helped usreduce our overall demand on energy.”He believes all this progressivenessis a matter of being in the right placeat the right time, meeting the rightsubject-matter experts and a little bitof luck.“I love talking to vendors andlearning from them. I think listeningand learning from others is how we’vebecome lucky enough to be a progressive company,” he says.Along with the ongoing quest toseek opportunities to enhance efficiencies, KTA is also always lookinginto opportunities to open newlocations. Taniguchi says he’s oftenasked if KTA would expand outside ofHawaii Island.“I can’t say we wouldn’t, althoughThank You Beau Oshiro!Welcome Toby Taniguchi!Honoring the Life of HFIA’s Founder Dick Botti1 4 Hawaii retail g rocer CO N VE N TI O N 2 0 1 8

our mission statement is ‘to do ourvery best at fulfilling the food, household and healthcare needs of BigIslanders.’ I’m not averse to changingour mission statement, but there mightbe challenges with distribution andhow we would manage inventory,”Taniguchi explains. “If we ever didthat, it may not make sense to shipgoods to Hilo where we have established warehouses, as we wouldhave to turn around and ship it backout to a neighbor island. If the rightopportunity came along, we would beinclined to look at that opportunitybut currently there’s nothing like thatin the works right now.”Through 102 years of service tothe Big Island community, KTA hasmoved forward with the ever-changing times. But the truly importantthings never seem to have changed.“I think the principles our companywas based on are timeless,” Taniguchiexplains. “Taking care of our customers,associates, and business partners, working smart and being safe are all part ofwhat’s important to us. At the end ofthe day, it’s really all about people.”COMPLETE 4 & 5 NIGHTVEGAS PACKAGES FROM 699SEE WHAT’S NEWCruise in comfort on wide body 767 aircrafts!Hawaii’s favorite casino just got better, enjoy the newly renovated California Hotel & Casino!Visit Vacations Hawaii’s nsHawaii@VacationsHawaii1585 Kapiolani Boulevard, Suite 900, Honolulu, HI 96814 Honolulu 808-591-4777 and Neighbor Islands 800-548-8951SMIT’S GOOD TORELAXEDSMıBoydVacationsHawaii.com133072Fnt VH DrillTeam Ad 4.625”x4.937” Insertion Date 9.1.17CongratulationsToby TaniguchiHFIA's New Board Chairfor continuing the legacy of HFIA's FounderDick Bottihawaii F OOD . com 15

The HFIA willpay tribute to itsfounder Dick Botti,during its annualAwards Banquet,Saturday, June 2,as part of the 2018HFIA Convention,June 1-3 at Aulani,A Disney Resort &Spa in Ko Olina.BA Special Tributeto HFIA FounderkciDBotti1 6 H awaii retail g rocer CO N VE N TI O N 2 0 1 8otti, who passed away lastJune, retired from the HFIAon December 31, 2010,after more than 40 years ofleadership to the organization whichhe founded in 1972.He invented his own legendarycareer establishing the LegislativeInformation Service of Hawaii (LISH),testified more than a thousand timesat the Capitol, got numerous bills beneficial to business passed, while killinghundreds of harmful ones. He helpedcreate Rainbow Fever, the Made in Hawaii Festival, and supported laws thatmade the Hawaii Foodbank possible.Foregoing a complete collegeeducation, Botti moved to Hawaii in1968 to take over the state’s chapter ofthe nonprofit National Federation ofIndependent Business (NFIB), goingdoor-to-door throughout the state recruiting new members and renewingcurrent ones.He became involved in local politics and began delving into legislativelobbying. He established LISH in 1970as a take-off on the NFIB, but offeringmore services. LISH was established toprovide small businesses with a way toget information on laws and regulationsfrom one source in an easy-to-understand format. LISH kept membersupdated with research on new laws.Botti and the late John Ushijima,Senate president from 1974 through1978 worked to pass the bill that established the small claims court in Hawaii.

One of Botti’s biggest lobbyingsuccesses was the glass advancedisposal fee program of the mid 90s.Glass refuse was melting on the wallsof H-Power during incineration andhad to be sandblasted off. Wholesalerswho sold products packaged in glasswere told to come up with a solution,or one would be legislated for them.HFIA supported a half cent tax on allglass at the wholesale level, which successfully took 35 percent of the glassout of the waste stream.As LISH was just beginning to gearup, Botti established the Hawaii FoodIndustry Association from scratch in1972. “He saw a need,” said Botti’swife Gwen. “LISH was the first. ThenHFIA became its flagship organization. HFIA had outstanding people,positive thinkers, go-getters.”When Botti first started HFIA, hegot Foodland, Star, Times, and ChunHoon as a core group, and went tothe neighbor islands to recruit otherstores like KTA, Big Save, Big Way,Ooka, Noda, Sure Save, and anythingelse smaller. There was always thepotential for contentiousness betweenretailers and wholesalers.However, Carl “Kini Pono” Hebenstreit, president of Trade Publishing,explained why that was never an issue:“HFIA is so vibrant because [wholesalersand retailers] have been able to put aside the[differences between] seller and buyer and worktogether. HFIA has provided an arena where all areequal and where the value of what they bring iswhat counts. To a large degree, Dick fostered this.”– Carl “Kini Popo” Hebenstreit, President, Trade Publishing“HFIA is so vibrant because [wholesalers and retailers] have been able toput aside the [differences between]seller and buyer and work together.[The leadership] rotates betweensuppliers and retailers by tradition.HFIA has provided an arena where allare equal and where the value of whatthey bring is what counts. To a largedegree, Dick fostered this.”Other ventures didn’t directly raisemoney for HFIA, but brought it recognition. Rainbow Sales & Marketingfounder Bill Prideaux and Stan Sheriff,legendary University of Hawaii athletic director, started the now familiarRainbow Fever program, which raisesscholarship money for athletes.Botti’s biggest success is the Madein Hawaii Festival, a brainstorm ofRepresentative David Morihara,whose father, an HFIA member, had agrocery store in Kula, Maui. Nobodywanted to take it on because of therisk, so HFIA agreed to do it.Botti once said HFIA started thefestival as a means of supporting Hawaiibusinesses, but it has turned into a smallbusiness incubator, allowing very smallvendors to make and stockpile a product at home and sell it at the festival.In the more than 40 years at thehelm of the HFIA, Botti dealt withconflict between members’ interests,and managed to weather throughindustry challenges.The HFIA is proud to honor itsfounder, the late Dick Botti at the 2018Summer Convention.This article, in part, summarizes “BottiDouble: One Man Packs an ImpossiblyFull Career,” by Jason Y. Kimura. Hawaii Retail Grocer, Spring 2011.hawaii F OOD . com 17

A ‘SNAP shot’ on proposed policiesBy The National Grocers AssociationA lot has been going on these days in Washington, DCwith regard to food and nutrition policy, especially surrounding the Supplemental Nutrition Assistance Program(SNAP) and labeling regulations. Here’s a brief “SNAPshot” of the various proposals that are being debated byfederal lawmakers and other important stakeholders.In February of this year, the Trump administrationreleased its Fiscal Year 2019 budget proposal, which included drastic changes to the SNAP program by replacingabout 40 percent of household SNAP benefits with agovernment run commodity box delivery service. Insteadof letting households use their SNAP benefits at theirlocal grocery store, SNAP funding would be used to sendeligible households a box of non-perishable food items.As soon as this “Harvest Box” proposal was releasedNGA’s governmentrelations team hitthe ground running,meeting with WhiteHouse policy officials, USDA, andkey stakeholders onCapitol Hill to expressour opposition to anyproposal that cutsout the private sectorfrom food delivery.NGA also organizeda letter to Congresssigned by nearly900 independentretail and wholesalegrocery companiesfrom all 50 states withthe message that anyCongressional effortsto put the governmentat the center of delivering nutrition benefits fails to recognize the competitive principles that have made the SNAPpublic-private partnership a successful program.While the President’s budget request officially kicksoff the formal process and outlines many of the Administration’s priorities, Congress typically creates their ownauthorization bills. The Harvest Box debate comes at aIn February of thisyear, the Trumpadministration releasedits Fiscal Year 2019budget proposal,which includeddrastic changes tothe SNAP programby replacing about 40percent of householdSNAP benefits witha government runcommodity box.Continued on page 361 8 H awaii retail g rocer CO N VE N TI O N 2 0 1 8

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TalkStorywith HFIA’s New Secretary/Treasurerand New Board Membersfood basket survey. We impress uponour customers that you don’t have todrive 12 miles outside of our community because we’re going to comeout at a considerable savings. It reallyboils down to staying relevant to yourcustomer base and community.Q:A:Secretary/TreasurerCharlie GustafsonVice President of Store Operations,Tamura Super MarketQ:A:What do you think is thebiggest issue facing grocers?Since we live on an island,everyone shares this economicpie. The challenge is to maintain orincrease the size of your slice by fendingoff your competitors. For us, and Ibelieve this goes for other traditionalSupermarkets is the big box stores.Obviously, they have some pricing advantages, but for our store we do havea geographical advantage by being onthe west side and far from town. Wehave some competitors out here butwe really see the big box stores as ourbiggest threat. We try hard to cater toour customers’ needs and I alwayschallenge our employees and customers – that if you take our supermarketcart and fill it up and match it withour competitors, we’re going to comeout with the best overall prices in ative. I think HFIA is a great organization that serves our industry well. Ihope to learn more from an inside viewand help in any way I can.What’s the biggest trend inthe retail industry today?Companies like Amazon areaffecting brick and mortar businesses like ours. Internet sales are onthe rise and it’s going to continue. Rightnow, this affects more of the generalmerchandise side and not the food sideyet, since some of the advantages thatAmazon has hasn’t fully transferredinto the grocery industry. E Commerceand those companies that can get ahold of utilizing data analytics are going to position themselves best in goingafter the Millennials.Q:A:Do you think Tamura SuperMarket will offer onlinedelivery in the future?It’s something we’re watchingbut

of KTA Super Stores. Mahalo toBEAU OSHIRO of C&S Wholesale Grocers. . KTA Downtown, Hilo 321 Keawe Street 808-935-3751 KTA Puainako, Hilo 50 East Puainako Street 808-959-9111 KTA Waimea Waimea Center 808-885-8866 KTA Kailua-Kona Kona Coast Shoppin