Interview with Bill Moore, DeCA Director on the Federal News Network
DeCA Adapts to the Pandemic Era: A Conversation With Bill Moore’
On March 1, on the Federal Business Network’s Business of Government Hour, DeCA Director and Chief Executive Officer (CEO) Bill Moore was the guest, speaking for about an hour about a wide range of topics related to the agency, including its history, its mission and how it has had to adapt its operations related to the pandemic.
After going though the history of the agency with host Michael Keegan — with Moore mentioning that 2021 is the 30th anniversary of the agency, but that the history of the military commissaries actually reaches back nearly 200 years to Revolutionary War times — the DeCA director spoke about the organization, and how it runs as a global operation.
“We are in just about every state — we’re in 46 of 50 states — but we’re in 13 countries outside the U.S. … the global footprint is 236 stores, much smaller than we were in 1991, where we were over 400 stores. Just the downsizing of the Defense Department has made us smaller, but equally effective.
“It’s our intent to reach every eligible patron, but eligibility, in my mind at least … part of it is their geographic ability to reach a commissary, so many of our eligible patrons just aren’t anywhere near a commissary.”
Moore characterized DeCA’s budget as “significantly robust, and we get just over $1 billion each year from Congress in appropriation, and then we turn that into retail sales, a department that really doesn’t deliver like a normal grocery store would.
“It’s very small margins in grocery operations, so we need that subsidy to enable us to deliver the benefit, which is by law, 23.7 percent cheaper than local market basket averages … we actually have an independent contractor that goes out and studies the local market baskets at every single store location over the course of each year, and we have to report that to Congress quarterly.”
In fiscal year 2020, Moore said the agency delivered a 25-percent savings based on the local market basket average.
“So in my mind, for every dollar one of our patrons spend inside the commissary, they save about a quarter, which is huge,” Moore stated.
A BENEFIT OR A BUSINESS?
Asked by the host about the difference between a PX and a commissary, Moore admitted that “this was something I had to deal with” when he came on board as commissary director in late August 2020.
Moore said, “One of the big questions was, ‘Are the commissaries a benefit or a business?’ We are a benefit and our patrons consider us one of their most vital benefits, behind health care and their pay. And they love their commissaries. So we are a benefit, but in order to deliver it efficiently, we have to operate like a business.
“The exchanges are a little bit different. They are a service, really of convenience for basically the same patrons, and they are able to offer their services at usually lower prices than you can get outside the gate, but you have no statutory requirement or responsibility there. The good news is that whatever profits they make in the exchanges is brought back to the services into Morale, Welfare and Recreation (MWR) funds, so the exchanges contribute back to the services with their profits.
Moore stated, “We don’t make a profit in the commissaries, but we’re delivering cheaper groceries and a lower grocery bill … it’s part of their pay system but not part of their paycheck.”
Moore was asked to describe his duties for the agency as its director. “I am responsible to deliver that benefit, by law, to all of our eligible patrons,” he said. “So the 23.8 percent is like ‘job one.’
“Everywhere I go, it’s delivering that benefit, but as part of that, I am fiscally responsible for our budget, I’m responsible for our audit-ability, for the fact that we treat our customers well — the whole dignity and respect requirement — and how we treat each other and our customers.
“We have nearly 14,000 employees, so I am personally accountable, in my head, to each one of our employees … I like to lift them up, rather than be the guy on the top looking down, I see my role in enabling our employees to deliver the benefit. That’s kind of how I see it, sort of a servant/leader type of perspective, and I have a great staff that supports me in doing that.”
Moore said that “we have a fairly robust headquarters, about 600 or 700 people together, and we do the buying from that level. We work with industry, and part of my responsibility is dealing with industry … and making sure our stores are really upholding our standards in terms of cleanliness, modernization and product selection, which is a big deal with our customers.”
WORKFORCE ALL IN
The host asked Moore what has surprised him most in his time in this position, and the director said that “first and foremost” was the workforce.
“I was cautioned when I was initially hired that they might be in a ‘status quo’ mode, and it wasn’t like that at all. From my deputy director down, everyone is ‘all-in’ on the value of the benefit. We are all believers.
“I like to talk about ‘purposeful work.’ We have a great purpose in delivering this benefit. Every time I see a family walking into a commissary, I feel proud that I am involved in that.”
Moore said that he was part of a military family growing up, with his father being a former Army service member, a retired and disabled veteran who fought in the Korean and Vietnam conflicts as a non-commissioned officer, and his mother was a stay-at-home mom.
“My sister and I were dragged to the commissary throughout my childhood, so I have seen it through that end,” he said, and in his Army job just prior to his current position — working in the Pentagon as part of the Department of the Army staff — “one of my responsibilities was representing my boss on the DeCA board of directors, so I kind of got to see it at the top and from the bottom, so that was really helpful in the way we work to deliver the benefit.”
Specifically about the workforce, Moore characterized them as “incredible, knowledgeable … it’s unbelievable the tenure of our workforce. Even at the headquarters level, many of them started out as a bagger, a checkout clerk, a GS 2 or 3 and have worked their way up through the commissary agency, so there is a lot of depth there … and a lot of commitment on doing the things that we need to do to transform the agency and deliver on the benefit.”
YOUNGER SERVICE MEMBERS NOT ALL IN
Moore noted that “the other aspect that surprised me” was that he witnessed younger service members not enjoying the commissary benefit.
“There is a perception that it’s just not cool,” he said. “We have a lot of retirees, we have a lot of senior military inside the commissary, so they fear going there. They don’t enjoy their benefit as they should.
“Like it or not, to this generation, convenience matters, and their time is so important to them, and they will choose time over value. They will trade that quarter off for a dollar saved if it saves them time going elsewhere or shopping outside the gate or avoiding those senior leaders.”
Moore noted that due to the needs of the younger service members, “We have to find a way to make it cool, and make it convenient … maybe even delivery to the barracks, as an example, as a way to get them to enjoy the benefit. They’ve earned that right to save, and I want to deliver on it. We’ve got to work on that.”
STRATEGIC VISION, PRIORITIES
Moore was asked the agency’s strategic vision and priorities, but he admitted he had to do his 100-day assessment “somewhat blind” due to the COVID environment.
“I couldn’t visit as many commissaries as I would have liked, I couldn’t visit some distribution centers, and I didn’t get overseas as I would have liked,” as he noted that 25 percent of DeCA’s stores are in these locations.
“With that in mind, I held an off-site with our team, once I had the opportunity to do my own assessment, and back in early December, I shared with the leadership team that this is what I am seeing … strengths, weaknesses, opportunities and threats perspective, what we call a ‘SWOT’ assessment,” he said. “And with their depth, the team gave me some really great points to add, or delete, from my personal assessment.
“From that, I published that 100-day assessment, and from that, during the off-site, we built the vision. I wasn’t comfortable with the old vision that we had … it was six or seven years old, and it just needed to be freshened up. To me, it didn’t meet what I would define as ‘the purpose of the vision.’ I wanted to set an aim point. What are we looking for?”
Moore said he met with many stakeholders after he was announced as DeCA’s new director back in July 2020 — “from industry to retirees to just plain shoppers to stakeholders within the building to service members themselves and the board of directors” — and he discovered that they all had a different perspective on “what DeCA should be.”
He said that he knew it was important to define that vision, and an updated vision was created.
“I have since socialized it with the stakeholders, and have achieved their buy-in — but we’ll see — on that, and the vision was published in December, and it went public just a few weeks ago,” Moore said.
The vision is as follows:
“To be the provider of choice for our eligible patrons, delivering a vital benefit exclusively for our military community and their families.”
Moore said that DeCA “is almost like a private club, so to speak, as you have to earn your right to shop there, and you have to offer your service to the nation to be able to enjoy this benefit. I wanted to capture that, the ‘exclusive’ aspect, but I also want DeCA to be the grocery store of choice, and with that comes a whole host of priorities.
“First and foremost, it has to be a safe place for them to shop. I think we have demonstrated with COVID that we can be safer than your normal grocery store, It also has to have what you want to buy.”
‘SIX LINES OF STRATEGIC EFFORTS”
From the vision, the director said he devised “six lines of strategic efforts.”
Moore said the top effort he was going to focus on, “the number one, and the one we get the most criticism from our patrons,” is the supply chain.
“There are many ways to measure this, but in the end, it is all about if the products that patrons desire to buy are on the shelf, or not.
“COVID has been very difficult on the supply chain — for everybody. For us, we went from about a 2 or 3 percent out-of-stock ratio to about 10 percent. Often, it was product that really needed to be on the shelf. We’re working on that, and that number one line of effort is improving our supply chain.”
Moore said that “as an old Army logistician,” the supply chain “is sort of my comfort zone.”
However, he characterized the U.S. supply chain as “convoluted” for DeCA, “and we don’t have a lot of control on a lot of the links inside that supply chain. I’m not used to that as an Army logistician, and I would like to fix that.”
Moore said he wasn’t sure he would be able to fix it “as he might like,” but “that’s OK, we will improve it either way, and hopefully, we will have more control, or at least accountability, for every link in the supply chain.”
The next goal was “to get eCommerce across the finish line.”
Moore said he was bragging back in November and December that under his guidance, DeCA had doubled the number of stores that offered curbside service, also known as the agency’s CLICK2GO program.
“We went from five stores to 10 stores, and now we are up to 11,” he said. “But it sounds great until I finish that point. It’s 11 out of 236. So it is nowhere near where it needs to be.”
Moore said he was “breaking glass” there, “looking at really interesting commercial options to where we can leap ahead, like every other retailer, in the COVID environment.”
He reported that the grocery industry is currently at 11 percent of sales being through eCommerce, and he recalled reading an article a few months before taking the DeCA position and in the early days of the pandemic, and the article stated that that was the target percentage for eCommerce for 2025.
“We are accelerating, at a dramatic speed in terms of how our patrons are buying their groceries, so we have to deliver on that,” he stated, saying that success in this regard is not only for convenience, “but it is a safety factor. People simply do not want to come into the store.”
Moore said the would like to be able to deliver on base if possible, “like the grocery stores do today … pick your competitor, Kroger or Walmart … and you can pick your delivery means … you want Uber Eats … if I could I would like to be able to hire veterans-owned businesses to do that, but I do believe that it will be a third-party thing between the customer and themselves and the delivery mode that they end up with.
“I’m hoping there are opportunities for veterans to have a business and to meet the need of our patrons. We are working this pretty hard under the eCommerce line of effort.”
Moore said the next priority is “patron focus.”
“We must deliver premier customer service,” he explained. “The customer is king, and I feel like we are kind of there, kind of not, and I just want to make sure that we have set clear standards of how we treat our customers, and it all comes back to that line of effort and what products we offer, so we are working that pretty hard.”
The next line of effort is related to “demand creation and revenue.”
Moore said that one of the reasons that he was hired was that the agency had declining revenue going all the way back to 2012, “from a high of $6 billion to $4.5 billion in 2019, and we matched that — and COVID actually contributed, especially with the panic buying in March and April — kept us above, so we didn’t decline in 2020. We were better by half a percent.
“That was a little behind the grocery industry, overall, because there was much growth in that industry in 2020, so we might have lost a little share, but we were on the plus side. But that said, we have to find a way to better deliver on demand creation and revenue.”
Moore reiterated a previous point, that every dollar in sales generates 25 cents in benefit to customers, “so if we increase sales, we increase our benefit delivery.”
The final two lines of effort encompass facility modernization, and the DeCA workforce.
“I just want to make sure that our facilities are clean and modern, and I want to take care of our people, give them the skill sets that they desire, and need, in order to operate in this transformed commissary agency going into the future, so I just want to make sure that we are ahead of the ball in offering good training and engaging with our employees.”
INTERNAL, EXTERNAL TRENDS
Moore was asked if there were specific trends within the Defense Department and/or within the industry that shaped this strategic vision.
“The external trends, the grocery industry, and the entire retail industry, is just changing so quickly, and we have to be on that bandwagon,” he said.
“We are in the midst of a transition with our information technology (IT). We are going to an Enterprise Business System (EBS). We cannot modernize our commissaries without having a modern IT system that from the supply chain and how we buy product to the point of sale itself, and how we deliver the benefit to the customers.
“That’s a big push, and that enables things like eCommerce, which is where the industry is headed, and delivery… when I did that off site, I alluded to Wayne Gretzky, ‘I don’t care where the puck is, I skate to where the puck is going.’ And I have talked with our team, and we must go where the puck is going.”
He said the team is all in with this direction, and with that comes innovation.
“It’s strange, in certain categories, we are first to market, and we get companies’ new and innovative products all the time and on the shelf very quickly,” Moore said. “Other categories, we don’t, and I want to make sure that we stay ahead of that, and can deliver on those new products that may have nationwide marketing going on. Our customers ask us where this new product is, so I want to get ahead of that as well in terms of external trends.”
As far as internal trends, Moore noted that the customer base is evolving. “Like it or not, our retirees are getting older, we rely on our retirees, they love their benefit. The young service members that I mentioned earlier, if they even understand it, they opt out, so to speak.
“I want to educate the young service members and their families on just how great a benefit it is, and then find a way to deliver it that they are comfortable with in terms of convenience while continuing to satisfy DeCA retirees and their families.”
Moore said that in 2020, Congress was “great,” opening the commissary doors to disabled veterans, “so if you have any service-related disability, whether you are retired or not, you can now shop at the commissary,” a decision that he noted added about three million potential customers to the commissary rolls “to the 12 million customers we already have that are potential customers, geography aside.”
“But our customers are having tough times gaining access, especially in a COVID environment,” he explained. “They don’t know how to get on base … some of my dad’s old Army buddies, they are retirees, they fought in Vietnam and are disabled, they say they don’t even know how to go on post. They haven’t been on post in 30 years. We have to find a way to reach that group and open the door for them and welcome them in.”
Moore said having these veterans as potential customers will help grow the commissary customer base, “but then again, they are going to have to make the choice” to use it or not.
Moore noted throughout the nearly hour-long interview that the COVID-19 pandemic has greatly impacted all aspects of DeCA operations.
“It has been tough on everyone,” he said. “It’s been really tough on our front-line commissary workers. Early on, some commissaries were shut down because of the risks involved, and this was before my time, but the Defense Department decided that commissary operations were a mission-critical function, at the installation level, and it was all about creating a safe place for our patrons to be able to shop.
“We were essentially told, ‘You gotta keep the doors open,’ which meant a lot of our employees had to put themselves at some risk. We didn’t want to put our high-risk employees that either have a medical issue or an age issue according to Center for Disease Control (CDC) guidelines, we frankly sent them home to protect them.”
The director said that DeCA was given the authority to hire temporary workers to come in and backfill those employees that were high risk, “and that allowed us to keep our doors open.
“It cost us a lot — somewhere in the neighborhood of $40 million, where we had to spend additional dollars to keep our doors open — but that is OK. The CARES act helped us out, that got us a little over $30 million, but beyond that, we’re kind of eating the cost, and we’re working our way through that. It’s just part of the business operation.”
To further provide a measure of safety to both employees and customers, the agency installed Plexiglas at checkouts, masks became necessary when inside the commissary environs, deep-cleaning is done every night, “and we are doing everything we can to ensure safe operation, and which mitigates the effects of a positive.”
Moore said the number of positives among DeCA employees “is very low, and it has remained low, and if I could knock on wood, I would,” but he admitted that “every day is a little scary.”
He said that back in November and December, “We had a steep incline in cases, and it was all that people were shopping … it’s a big selling period for all of resale, and we had a spike in cases. That has come down a little bit, but every day I pray that it will stay down.
“We have great procedures in place that whenever we do have a positive case, we can make sure that there is no risk for our customers, or other employees, as we continue to deliver on the benefit.”
But with the pandemic remaining top of mind a year after it was first widely acknowledged, “It has affected our business operations,” Moore said, adding that he “would love us to get over the finish line” on many levels.
Bringing up the supply chain again, Moore said that the agency went from about a 90-percent fill rate “on what we order to get into stores: to down below 50 percent as a result of pandemic-related issues on getting products on store shelves.
“We had that problem for a while because many or our suppliers couldn’t keep their manufacturing plants open,” he explained. “There were competing demands outside the gate, and there was just not enough product to go around.”
Moore said he has met with all of DeCA’s leading suppliers, “and sort of pleaded our case to get more than our fair share, so we can deliver on the benefit, and they have been very open to that.
“We are starting to see some improvements. We are up to a 67 to 70 percent fill rate range now. It’s still not where it needs to be, but we are working our way through it. A lot of our suppliers are kind of getting used to dealing with a COVID environment and still deliver on product, because we can’t make the sale if we don’t have the product.”
ENTERPISE BUSINESS SOLUTION
Moore spoke about how the EBS will modernize DeCA’s business.
“It is a great system, probably long overdue,” he said. “We initiated this back in 2016, we started deploying this new system, and we’re getting there.”
EBS has four increments of delivery, the first of which is a merchandising suite, which Moore explained is how DeCA deals with its suppliers, and upon which he said the agency is “essentially fully deployed.”
Increment two is used to helped replenish the agency’s commissaries, “So how do we see ourselves at the store level, is the product on the shelf or not,” he explained, adding that this increment is about 70 percent deployed, “and we need to get that over the finish line.”
Increment three is the point-of-sale system, which Moore said he considers to be an extremely important cog in the EBS rollout and implementation.
“Getting that to the enterprise level, where we can then do eCommerce very easily, and we can do things like self-checkout a lot easier, and other things our customers expect, we’re about 40 percent there … but it’s not soon enough,” he noted.
Moore estimated “We are probably about a year or so out, we would like to accelerate that, and I’ve got the team looking hard at how we can accelerate that across the board ”
The fourth increment involves distribution, in particular, how it is managed overseas in the agency’s warehouses. Moore said this increment began with the first warehouse rollout in October, “and we expect to see that over the next year to be fully implemented across our distribution centers.”
He said that with the entirely of EBS, “we are getting there, but part of us getting there is getting EBS to the cloud. Right now, we are ‘on prim’ so to speak, so we own our own servers, and that sounds great, but it’s no so great.”
Moore explained that in his past Army position, he was responsible for the Army’s logistics IT, and he led the efforts to migrate to the cloud because “there were so many benefits there.”
He said he became “a believer” in the cloud, “as it creates much easier ways to modernize IT, to protect it. It is a bit counter-intuitive to me, but it is safer on the cloud, and it just allows for us to host it in a cheaper and more effective way.”
The director said that to get DeCA’s EBS accelerated is to get it to the cloud “and do other aspects that we hadn’t really investigated very well before I got on board, meaning we looked at it, we had a policy obstacle that wouldn’t allow us to get over the finish line, and I am talking about online payment.”
Moore said he has told the Defense Department that DeCA “cannot be a 21st century retailer without online payment. It’s just not feasible,” adding that this element is getting “great support” from the Pentagon “in getting that over the finish line,” so he believes that online payment will come to the commissaries sooner rather than later.
“If we get there with the cloud and we get there with online payment, then we really accelerate getting EBS out, and doing things like eCommerce in a different and more effective way.”
Moore said he hoped to have “the most important aspects of the cloud” operational in the next three or four months.
“We have a couple of obstacles,” he said. “Like it or not, we are part of the Department of Defense information network (DoDIN), we might be the only retail commercial entity that has to operate within all of these constraints of cyber-security within DoDIN, and we have an obligation to protect our patrons and their privacy information.
“It’s a unique challenge, but we are doing pretty well. The leap to the cloud requires some approvals because we are on the DoDIN, and we are working our way through that now. I’m predicting success, but I’m not quite there yet. I hope to get us over the finish line in the next few months.”
“DOT.MIL” IT ENVIRONMENT
Moore said that DeCA was in the “dot.mil” environment. “It makes it so unique when you are dealing with debit cards and credit cards and coupons and people’s personal bank accounts … you make sure people have money in their debit accounts.
“We have to operate in the ‘dot.mil,’ but we have seamless crossover to the ‘dot.com’ world, It has created some pretty unique challenges for us in the IT arena, but I am really proud at the way our staff has found ways to maneuver in that spacing and meet the needs of our patrons. If patrons want to use their debit card, I want to make sure they can.”
Asked by the host whether DeCA will ever fully move from the “dot.mil” environment, Moore said, “I will never say never, but it will be difficult because of having to validate the eligibility of each customer, we use their common access card, we use only very limited access because there is a fear of some of our patrons of having to get their card read in, but it does verify their eligibility, and so, it’s kind of the easiest way for us to do that.
“As long as we have to do that — which I think we’ll always have to — we’ll have to communicate with the ‘dot.mil’ if not stay on it.”
Moore admitted that that creates challenges, “and we may talk about that later and how we partner with the exchanges, and they are all on the ‘dot.com side of things, and it simplifies their lives a little better, so if we look at consolidating some of our IT over time, which is a possibility, the Department may have to make the decision that we are either going to be all in or more likely, all out, and then we would migrate to their approach. But that’s years downstream.”
Talking about technologies that are relatively new to the playing field — such as machine learning, artificial intelligence (AI) and block chain —Moore said EBS “gives us big data, so now we kind of have it, and we are in the midst of deploying the system, we are getting more good and big data, and one of the things that I have to make sure we have is good big data, because you can have big data, but if it isn’t good, you can make big, bad decisions.
“That is where I envision AI and machine learning … not only in ensuring our big data is good and accurate, but it also allows big data analytics. We have to learn how to leverage our big data so we can better deliver what our patrons need.”
Moore sees “a great future” as AI is increasingly utilized, “because there really is more to take on for a human being to do. We have an analytics group at DeCA, but it is really tough to get into the weeds of big data without some help from an AI perspective.
“I envision us to leverage out as we move forward, and that will help us to choose better products and deliver on our patrons expectations in a much better way moving forward.”
Moore said that DeCA is using analytics to better understand its customer base, “what the retirees desire versus young service members.
“We have this ‘Your Every Day Savings’ Program, and we are targeting that to young service members. I think when I was back as a kid and my dad, a staff sergeant, had very little buying power, so the commissary benefit was very much more …the value of the benefit was much greater.”
Moore said, “I am trying to figure out how I would quantify that in some respect. When he was a retired NCO and the kids are grown, and he had a lot more buying power, he didn’t really need to shop anymore, but he still did, because he still liked saving money.
“But with young service members, in this program, it allows us to target the products that they need and that they are buying, like diapers. We can offer additional savings there, and we use big data analytics to help us to figure out what the products are that they need and desire and then how do we price it appropriately to where it maximizes the value of their benefit.”
The host posed a question about DeCA’s relationship with the military exchanges, and Moore said that the agency does partner with the exchanges, but this is a far cry for what had been proposed at one time and an issue that continues to be looked into: a move to consolidate commissary stores under one umbrella with the exchanges.
“But they are very different exchanges,” he explained. “You have the Army & Air Force Exchange Service (AAFES), run by Tom Shull, so they Army and Air Force had already combined; you have the Navy Exchange Service Command (NEXCOM), run by Rear Adm. (retired) Rob Bianchi, who worked as the commissary ‘director’ for a couple of years; and you have the Marine Corps Exchange (MCX), with Cindy Whitman Lacy.
“Those exchanges are very different, but they have all worked with us.”
Moore noted that there was a study done by the DoD chief management officer that concluded that “there was a lot of promise” in putting the exchanges and commissaries into one body, but there was a lot of criticism of that study, “that the assumptions were not very valid.
“The Government Accountability Office (GAO) took a hard look at it, and didn’t like the conclusions reached … and in this year’s authorization bill, Congress asked us to redo the study, which is now underway, and we have to deliver that sometime in the next few months, that re-looks at consolidation.”
Moore said that he doesn’t think consolidation will work “because it is just too expensive to do it and the return on investment (ROI) is 50 years … it will take forever to recover what it would cost.
“Just our IT system is an example. We are about $300 million to $400 million deep in our modernization of our IT, and I don’t want to have to start over in some larger IT effort, but that said, I think there is great low-hanging fruit in how we partner with the exchanges,” and the communication lines are open between the commissaries and exchanges.
“Rob, Tom, Cindy and I speak at least weekly about how we could partner together in this consolidation study so that we meet the needs of the Hill in answering that question once and for all. We also discuss opportunities of partnership. We have created a buying alliance where if we are buying the same product, we might be able to strike a better deal if we join forces in a volume-buying perspective. And that’s working pretty well.”
Moore said that at the present time, inside-commissary beer and wine sales “are being piloted … every grocery chain gets lots of sales out of beer and wine, and as a convenience to our patrons, I would like to offer it.
“It is piloted in 12 stores, and we are doing that as a partnership with the exchanges, so basically, we are buying product from the exchanges and then we offer it inside the commissary … if you want a red wine with that steak tonight, what I don’t want to do is for our customers to say, ‘I can’t get the wine at the commissary, so I’ll go to Kroger.’”
The director said he wants to make sure that the commissaries can deliver the benefit, and that patrons can save money “and get the wine as a convenience, or beer with a burger.”
COMMISSARY STORE BRANDS
Talking about various commodities, the subject of commissary store brands came up, and Moore said they are doing “extremely well.”
He noted, “We are growing with our commissary store brands every day. We are at about 1,000 products, and what is unique about our commissary store brands is that with these brands, we are able to deliver the commissary benefit and achieve some level of margin, or profit, with those brands.”
Two of these brands are commissary-only offerings: Freedom’s Choice encompasses food and water among hundreds of products, and HomeBase, which is a non-food brand. Moore reported that both of those brands are doing “very well.”
DeCA also offers six other brands as commissary store brands, “but they are just not unique to the commissary,” he explained. “They are offered at other stores.”
He explained, “When it is not cost effective to do it all on our own, we are able to deliver the product to our consumers without having us invest much in it. It is just a more efficient way to deliver.”
Moore said, “We do achieve some margin, and our appropriation now has been reduced to where we have to achieve some level of margin in order to finance the operations with the aim of delivering the benefit.”
He noted that the commissary store brands “are very near and dear to our hearts, but there are private label brands in every grocery store. We’re at 5 percent, 1,000 or maybe 25,000 items in our commissaries. A store like Kroger is well over 20 percent, and growing. In Adli or Lidl, they are up to around 50 percent. It’s just a better deal.
“Consumers expect it, to have that option. They can use that choice. I like to use my Jif peanut butter, and since I am a Jif guy, I am not going to buy a private label peanut butter. Brand loyalty matters. When it comes to bottled water, I feel kind of patriotic buying the Freedom’s Choice water. And, the commissary agency is making a few dollars, so it’s lowering what the taxpayer has to pay. It’s really a win-win.”
However, Moore said he “does not feel comfortable” that the agency has optimized its strategy, which he said has been based in the past on achieving margin and the number of products that these stores offer.
“I think it’s a complicated strategy that we need to put in place that considers revenue, and margin, and number of product lines,” he explained. “If a product is not selling, then I want it off the shelf. It’s not important to me that it has to be a thousand or more, it’s important to me that we have the right products there that our consumers want.”
He added that if private label products got up to 10 percent, amounting to 2,000 or 3,000 products, “that would be great … but only if they are all selling.”
Moore said that that strategy is being looked at, and that the agency is “trying to take a disciplined approach to the future of commissary store brands, much to the chagrin of some of our suppliers, but it is here to stay, because it is something that the customer expects. They want that option, they will make that choice of whether they buy that private label item or they buy the name brand, and suppliers just have to realize that that is a competition that they are going to have to overcome.”
However, Moore said that what he does not want to do is “to not offer store brands just because we can. I just want to make sure that it is what our patrons desire. If they have that brand loyalty that I do with Jif peanut butter, so be it.”
The host asked Moore how he was leveraging partnerships and collaboration with the private sector to improve operations.
“DeCA had kind of gotten away from collaborating with industry partners,” he stated. “It was a very conservative approach, and there was some worry that it wasn’t as ethical as it should be.
“We are a link to our suppliers. We are dependent on them, and in my opinion, we must collaborate with them. They can help us to properly market product, and reach our consumers in ways that we can’t, just because of the rules and the policies that we have to live by.”
Moore said he has made an “express effort” in reaching out.
“We call them listening sessions, but since November, I have met with all of our top suppliers — the top 25 or so — and I have let them tell me what is working and what isn’t. They have given me a lot to think about and our team a lot to think about, and we are making headway and they are helping us on our eCommerce — how you offer a product on a digital shelf — and this is a science evolving by the day. It is very different compared to how you offer a product on a physical shelf.
“They are also helping us plan properly with innovative products so we are first to shelf, but we cannot be first to shelf if we don’t know what is coming … if they are going to offer a new flavor of Gatorade, we have to make the choice if we are going to offer it to our patrons.”
Moore said DeCA has a lot of brokers who represent suppliers, “and that is who I am meeting with now, doing the same listening sessions for our brokers … they have a little different perspective, because they earn their profit a little bit differently than our suppliers, so we are working our way through that and hearing them out. We are learning a lot from them.”
Collaboration with distributors is also an important part of the business. “Distributors work for our suppliers, so as I always say, ‘Follow the money,’” Moore explained. “We pay the suppliers, the suppliers pay the distributors, and the distributors bring our products to us.
“It isn’t a very efficient system, as there is a lack of transparency between us and the suppliers and the distributors, and the brokers are in there somewhere, so I am trying to clean that all up based on input from the distributors. We don’t want items sitting in their warehouse that we are not going to order, and they don’t want it either. It’s a lose-lose.”
Moore said the agency works closely with four major distributors within the U.S., “and we are figuring out how we can do this better as we move forward … how do we reinvent our supply chain, so in terms of collaboration with suppliers, brokers and distributors, these are three different entities that we must be in sync with as we move forward, while we protect ourselves from the policies and statutes that allow for competition and all of that.
“We are doing it with eyes wide open and doing it well.”
Asked about the future of the agency, Moore went back to a constant touchstone of current commissary operations.
“I want to be the grocery store of choice for every eligible patron,” he stated. “Those eligible patrons, they want new things. For one, we are at 236 locations. I am not sure how we got where we are, but that is where we are, from over 420 commissaries when DeCA was formed in 1991. It was a bigger Department of Defense, but I am not sure how smart those decisions were made.
“There are really no dollars available to grow the number of commissaries, so how do we deliver the benefit to our patrons when we have limited locations, limited hours — we have a lot of commissaries that are not open seven days a week, l mean, what grocery store is not open seven days a week? — How do we get our stores open seven days a week to meet the needs of our patrons?”
Moore said he wants to find better ways of doing that, “but that adds to the cost of the operation and we’re not going to get any more taxpayer dollars. So in trying to figure that all out, I don’t expect us to have more locations, so the question is how do we deliver at the locations that we have? How do we get to that young service member? Are there ways to do that through eCommerce and delivery? Are we offering the right products for them?
“They are very health conscious. We just rolled out this Green Thumb Program where we have dietitian-approved items on the shelf and it is very easy to see it with the green thumb. We are offering meals that have already been prepared, and your shopping list is ready for you. And that is just one of the ways that I see us being able to deliver moving into the future.”
The director said as he had mentioned earlier, beer and wine is another area that might be a future resource for the agency, “but I am not sure that I will get that over the finish line. I would like to offer patrons meals that they just pick up and are ready to take home and put into the oven, like you see at Kroger and Whole Foods.
“I think that convenience factor for our younger service members is huge. They have more buying power than my dad did as a staff sergeant in the 1960s, and we have to keep that in mind as we move forward.”
Moore said, “Our ability to partner with other vendors … we are constrained in doing that now, it’s just policy … and we don’t want to be in competition with the exchanges, they do that, so when you see a Popeyes or a Burger King on an installation, that is in partnership with the exchanges.
“That is a pretty clear line that I am not allowed to cross, but I would love to find ways to partner with them and maybe at least deliver some of those conveniences, maybe under our roof, but as a partnership with the exchanges … you can get that Starbucks coffee if you want it while you are grocery shopping. That is what you see at a Whole Foods or a Kroger.”
The director said both “the policymakers in the building and the lawmakers on the Hill” are open to these ideas “while we don’t create unhealthy competition with the exchanges as we try to deliver what our consumers desire.”
He does see a bright future in this regard, “low-hanging fruit not quite as high on the priority list as some other things I outlined earlier, but areas where I do see promise.”
The host asked Moore what listeners should take away about DeCA from this conversation.
“Number one, it goes back to the vision,” the director said. “I mentioned that benefit. If you can save a quarter on every dollar that you spend in the grocery — I just buy for me and a couple of teenage boys — but that can be [money] in my pocket. Who wouldn’t want that? And when I see one of our eligible patrons not shopping the commissary, it really leaves me scratching my head.
“They have to understand the benefit, so we have to do a bit of education, I would want all of the understanding that it is the benefit, and then they can make a conscious decision — ‘I’d rather pay an extra quarter for that gallon of milk’ — so we’ll see.”
Moore said the second takeaway “is that we are driven to offer the commissary benefit in a more convenient way. We are going to get there on eCommerce, and I think we are going to get there on delivery as well … probably through a third party, but at least offer it.
“You won’t save a quarter on the dollar on delivery, so if you decide that $5 is what you are willing to pay to get your groceries delivered to your barracks door, then so be it. If you Grub Hub a sandwich, it can go from a price of $12 to $22. That is an extra $10, but they never have to leave the house. That is how these kids think. We have to be able to deliver on those conveniences.”
The third takeaway is the workforce. “They have taken a beating over the years with just the way the commissary agency has evolved,” Moore noted. “Morale is getting better, but it is not as great as it could be, but we have this great workforce — they are all in on delivering the benefit, ‘purpose for work,’ you couldn’t find a better purpose.
“I like to tell our workforce, ‘You serve those who serve.’ That is what we do. I’m loving that and with morale getting better every day, I want our customers to understand that we are all in. Sometimes I think that they may not think that we are, based on reading the comments that we get. We have to get better on how we communicate on social media moving forward back to the young service members.
“We have got this great workforce, and I love what they do every day, they love what they do every day, and I would love our patrons to better understand that.”
CAREER PUBLIC SERVICE ADVICE
Asked about a career in public service, Moore said he has more than 37 years in public service at this juncture, ‘and it has been a great career for me, and I would encourage anyone who is thinking about it give it a whirl.
“I made a choice at about the 10-year mark to leave for industry, I was told I left a lot of money on the table because we don’t pay as well inside government, but you have such intrinsic rewards in serving those who serve, as what I was, which was a Department of the Army civilian. I am now a Department of Defense civilian.
“I go home pumped, and in the morning, pumped to deliver the benefit. The pay is not bad, the benefits are pretty darn good in terms of health care and retirement, You might not make quite as much as you would make from industry, but you are going to sleep a lot better. You don’t have to worry about ‘I don’t have this contract, so I don’t have a job tomorrow.’ There is a job security aspect to it, and then there is that higher purpose of delivering something. I have just enjoyed every single minute of it.
“My dad was my greatest coach until he passed away, but he used to ask me every day, ‘So what have you done for soldiers today?’ He got me to the place where I would ask myself that question at the end of every day.
“Like I said, it’s a great career in terms of reward, the benefits are good, pay is pretty good, and keep in mind the job security offered by public service.”
The entire interview can be accessed at https://federalnewsnetwork.com/business-of-government-hour/2021/03/deca-adapts-to-the-pandemic-era-a-conversation-with-bill-moore/.