Canadian Grocer November 2023

NOVEMBER 2023

GOLDEN! Meet the 2023 Golden Pencil Winners Jamie Nelson and Susan Niczowski

Battling theft and loss Unleashing the power of retail media networks Snack attack!

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Contents

November 2023 || Volume 137 - Number 7

8

31 Features

Departments

25 Gold stars

5 Front Desk 6 The Buzz 51 New on Shelf

TOP, FROM LEFT: GETTY IMAGES/TARIKVISION, PEOPLE COLUMN PORTRAIT: LUCAS FINLAY, TEA: GETTY IMAGES/ALEXEY KOZA

Meet Jamie Nelson and Susan Niczowski, the 2023 Golden Pencil winners!

31 The battle against theft and loss

How grocers can fight back against store theft, organized retail crime and cybercrimes

39 Unleashing the power of retail media networks

In-store and online digital assets can be a powerful (and lucrative) tool for grocers

PEOPLE

8 Awesome sauce

Paul Gill left his corporate job to give entrepreneurship a fair shake of the sauce bottle IDEAS

11 Feeling squeezed

Survey says: millennials and gen Zs are struggling financially

13 Bumps in the road

Trucking firms face hiring woes and it’s impacting indie grocers

15 Weighing the threat of Ozempic on snack sales

Is the rise in weight-loss drug use changing shopping habits?

On the cover Golden Pencil winners Jamie Nelson and Susan Niczowski Photography by Mike Ford

17 Tough stuff

Star Women in Grocery winners, past and present, share stories of resiliency and perseverance

49 18 Star gazing

See photos from this year’s sold-out Star Women in Grocery Awards ceremony COLUMN

21 The great realignment Ipsos’ Kathy Perrotta on Canadians’ evolving health and wellness needs AISLES

43 Snack attack!

A look at what continues to drive the craze to graze

48 Defensive play

Post-COVID, consumers are taking a more proactive approach to their health

49 Tea: Four things to know

We’re spilling the tea on this popular beverage EXPRESS LANE

52 State of a nation

RBC’s Nathan Janzen on what’s next for Canada’s economy November 2023 || CANADIAN GROCER 3

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THREATS AND OPPORTUNITIES Navigating an obstacle course is an apt characterization of what it has been like to operate a grocery business these last few years. From COVID and its lingering effects to rising costs, natural disasters, labour issues and disgruntled shoppers, there’s been no shortage of hurdles to overcome. And then there’s the problem of theft.

While theft has always been a headache for grocery retailers, today it’s a growing menace. According to Statistics Canada figures, shoplifting jumped 31% in 2022 versus 2021 and retail groups say losses from criminal activity today reaches into billions of dollars and thieves are increasingly aggressive and even violent.

And it’s not a uniquely Canadian problem, around the globe retailers are contending with upticks in theft and violence in their stores. In the United Kingdom, the problem (some call it an epidemic) of theft prompted the launch of a Retail Crime Action Plan in late October. The plan, hatched by the government, senior police leaders and 13 of the U.K.’s largest grocers, sets out measures to tackle the rise in shoplifting, catch more offenders and keep workers safe.

In “ The Battle Against Theft and Loss,” writer Rebecca Harris digs into the problem of retail theft and violence. She reports on the new tactics retailers are employing to mitigate risk and protect employees as well as the balance they need to strike in creating safe environments that don’t diminish the customer experience. Take note: when it comes to anti-theft measures, Canadians are not on board with having their receipts checked when exiting a store. (Turn to

page 31 for the full story.)

On a brighter topic, we also delve into the world of retail media networks (RMNs). With so much buzz surrounding RMNs, writer Rosalind Stefanac talks to the experts about the opportunities for grocers in this space and what they should consider before taking the leap (read the story on page 39).

Finally, we are delighted to shine a light on Jamie Nelson of Pattison Food Group and Summer Fresh Salads’ Susan Niczowski, the 2023 Golden Pencil winners. Turn to “Gold Stars” (page 25) to see why these two Canadian grocery legends are deserving of this prestigious award. CG

Shellee Fitzgerald Editor-in-Chief

sfitzgerald@ensembleiq.com

Keep up to date on the latest news by signing up for our daily e-newsletter. It’s free and we’ll deliver it to your inbox each morning.

Visit canadiangrocer.com to subscribe November 2023 || CANADIAN GROCER 5

The Buzz

The latest news in the grocery biz

Eataly’s second Toronto location opened Nov. 2 at Cadillac Fairview Sherway Gardens shopping centre in the city’s west end

The first No Frills Plus store, located in Brampton, Ont., sells general merchandise in addition to its standard selection of grocery products

OPENINGS

Canada’s first NO FRILLS PLUS store opened in Brampton, Ont. in late September, offering the Loblaw discount banner’s standard selection of food with the addition of an expanded service offering.

Located at 85 Steeles Ave W, the store features Joe Fresh, Theodore and Pringle Optical, PC Financial services, PC Mobile as well as general merchandise. It’s the first No Frills to offer PC Express home delivery and curbside pickup.

Healthy Planet opened a 7,500-sq.-ft. store, offering an array of health products, in Toronto’s high-traffic Yonge-Dundas Square

EATALY has announced its second Toronto location—a 25,000-sq.-ft. space at Cadillac Fairview Sherway Gardens mall in the city’s west end—opened on Nov. 2. The Italian food hall first opened its doors in Toronto in 2019 at 55 Bloor Street West.

Toronto will be the second city in North America, after New York, to have more than one Eataly location.

NATURE’S EMPORIUM has opened its second location in Ontario’s Halton region.

The 24,000-sq.-ft. store in Oakville’s Dorval Crossing shopping centre features a wide selection of supplements; on-site nutrition experts; a wellness bar; a grab-and-go section with gluten-free, dairy-free, vegan-friendly and vegetarian 6 CANADIAN GROCER || November 2023

Nature’s Emporium’s new Oakville store offers a wide selection of vegan, gluten-free and vegetarian grab-and-go options

choices; organic produce; natural health and beauty products; household essentials; local brands and more.

GIANT TIGER continues its expansion across Ontario with the opening of an 18,800-sq.-ft. store in London and a 20,000-sq.-ft. store in the west end of Sault Ste. Marie. As part of the grand opening celebrations, the discount retailer donated to local charities in both markets.

News to share? Tell us about your openings, comings and goings, etc. by dropping a line to sfitzgerald@ensembleiq.com

EATALY, HEALTHY PLANET

SAVE-ON-FOODS has opened a new store in Prince George, B.C. The 38,924-sq.-ft. space, part of Pine Centre’s newly transformed shopping centre, offers a traditional grocery shopping experience including a meat and seafood department; a bakery; a selection of bouquets, potted plants and fresh-cut flowers; fresh cut fruit and vegetables as well as freshpressed juice in the produce department; Save- On-Foods Kitchen grab-and-go items; and a popcorn kiosk.

Toronto’s busy Yonge-Dundas Square is home to a new HEALTHY PLANET . The 7,500-sq.-ft. space includes a Healthy Planet Kitchen featuring a chef-inspired menu with an assortment of grab and-go items including soups, snacks and smoothies; organic produce; natural grocery products; dietary supplements; vitamins; natural beauty products; ecofriendly household products and more.

PEOPLE

Eataly has appointed Tommaso Brusò as its CEO for North America. Brusò joins the Italian restaurant and retail group from clothing brand Colourful Standard, where he was group CEO. He previously served as global COO for Benetton Group in the U.S. Prior to that, he was CEO of Diesel North America (2013 to 2017) and CEO of Furla Americas (2008 to 2013).

Tommaso Brusò

Drew Black

Joe Ens

Tom Szostok

Errol Cerit

Michi Furuya Chang

Drew Black is the new CEO at Egg Farmers of Canada.

Black, who stepped into the role on Nov. 6, previously served as executive director at Canadian Hatching Egg Producers, where he was the principal liaison between the board of directors, board committees and the organization’s operations. Prior to that, he was the director of environment and science policy at the Canadian Federation of Agriculture.

Joe Ens has been appointed CEO at Fontaine Santé Foods. Ens brings more than 25 years of consumer packaged goods experience to the role. Ens spent more than 20 years at General Mills in various leadership roles growing cereal brands such as Cheerios, Cinnamon Toast Crunch, Lucky Charms and Trix. He also served as vice-president of the company’s snack bars business unit that includes the Nature Valley and Fibre One brands. He most recently served as CEO of High Key, a maker of gluten-free and sugar-free cookies, crackers, wafers, clusters, candy bars and chocolates.

Lactalis Canada has appointed Tom Szostok to the position of senior vice-president, sales. Szostok will lead the company’s commercial sales, overseeing both the customer accounts as well as customer strategy and development (revenue growth management, e-commerce and shopper marketing, sales operations and business development) teams.

He most recently served as executive vice-president of sales, North America at Sabra Dipping Company.

Frank Spagnuolo has joined Burnac Produce Group as senior vice-president and managing director. With more than 30 years of experience, the executive has dedicated most of his career to Loblaw, in numerous roles. Most recently, he served as the grocer’s senior category director, produce procurement.

AWARDS/RECOGNITION

FHCP AWARD OF DISTINCTION

Food, Health & Consumer Products of Canada (FHCP) has selected Dino Bianco, CEO at Kruger Products, as the winner of its 2023 Award of Distinction in recognition of his “significant contribution to, and leadership within, FHCP and the Canadian food, health and consumer products manufacturing industry,” according to a press release. Bianco received his award during FHCP’s annual CEO and Executive Leadership Conference, held in Niagara-on-the-Lake, Ont. in October.

CFIG LIFE MEMBER AND SPIRIT OF THE INDEPENDENT RECIPIENTS 2023

The Canadian Federation of Independent Grocers (CFIG) announced the recipients of this year’s Life Member Designations and Spirit of the Independent award. Life Member Designations have been awarded to Christy McMullen of Toronto’s Summerhill Market in the independent grocery category, and Maple Leaf Foods’ Curtis Frank in the industry builder category.

Meanwhile, Pattison Food Group president Darrell Jones has been recognized with the 2023 Spirit of the Independent Award. The recipients were honoured during the Canadian Independent Grocer of the Year awards gala in Toronto on Oct. 25.

Christy McMullen

Curtis Frank

Darrell Jones

Food, Health & Consumer Products of Canada (FHCP) has made changes to its senior leadership team. Errol Cerit has been promoted to executive vice-president industry, government relations and membership development, and Michi Furuya Chang has been promoted to executive vice-president public policy, regulatory affairs and head of divisional strategy.

Kellanova has completed its separation from Kellogg Company’s North American cereal business and the company has named the executive team that will lead operations in Canada. The team includes Tony Chow, president; Angela Giancaterini, Canada legal director; Chrissie Say, Canada finance lead; Erin Towns, Canada sales lead; Gretchen Merkel, Canada supply chain lead; Lores Tomé, Canada corporate affairs lead; Nicole Gawen, Canada marketing lead; and Patricia Antonio, Canada human resources lead.

Tony Chow

Kellanova has appointed an executive team to lead its operations in Canada, including president Tony Chow

November 2023 || CANADIAN GROCER 7

People

Who you need to know

AWESOME SAUCE

A cousin’s soy allergy prompted Paul Gill to start a sauce business that’s now carried by major grocers

By Andrea Yu Photography by Lucas Finlay

30 seconds with …

IN

2012, a year after graduating from business school, Paul Gill was feeling the pull toward entrepreneurship. He was working as a sales representative for a marketing company in Vancouver at the time and realized that corporate life wasn’t for him. “I wanted to start my own business,” Gill recalls.

A conversation with his cousin, who has a soy allergy, led Gill to research coconut aminos—a soy sauce alternative made with fermented coconut sap and sea salt.

“This is a product that didn’t have too many options in the marketplace,” Gill explains. “I saw people on message boards asking how to find these products. There was pretty decent demand.”

After work, Gill would spend his evenings searching for suppliers, co-packers and distributors, working with agencies for the product’s branding, labels and website and setting his price points and promotional schedules. “All of it was new and foreign to me,” he explains. “But, at the beginning, it was very exciting.”

He named his business Naked Coconuts, representing the simple, additive-free nature of his products. The starting lineup would have two products: coconut aminos—the soy sauce alternative—and coconut oil.

Gill spent about a year working on the business while continuing his fulltime job. By February 2013, he was ready to launch Naked Coconuts and quit his sales job, going all in on entrepreneurship. He launched at approximately 50 small indie shops in Vancouver including Greens Market, Sprout Health Market and Famous Foods. “I knocked on all their doors and told them what I was trying to do,” he says. “They were very receptive and supportive. It was incredible to see my products on their shelves.”

One month after launch, Gill switched from plastic to glass bottles in response to customer demand, despite the higher cost and risk of breakage. His products were making such a small profit that he needed to raise his prices, which made the switch stressful.

Such moments made Gill question his decision to start a business. “Many times, over the first few years, I thought: Why did I get into this?” Gill recalls. “It was very common for me to go into my car,

roll up the windows, blast the music and yell, scream and sometimes cry just to let it out.”

But Gill persevered and by the end of 2013 he signed with a national distributor, which helped get his products in about 250 independent stores across Canada. That number grew to 600 small, independent grocery stores by the end of 2015. So, in 2016, Gill felt ready to expand the lineup with a teriyaki sesame ginger sauce made using coconut aminos as a base. This addition helped Gill break into around 125 Save-On-Foods stores across British Columbia, Alberta and Manitoba in 2016, which garnered the attention of other major grocery chains. That same year, Gill signed on with 80 Metro stores in Ontario and, in early 2017, he launched at 200-plus Loblaws stores nationally.

Looking to expand his product lineup once again, in late 2019, Gill launched protein bites and made his first full-time hire. Then, the pandemic hit. “On-the-go snacks [sales] dropped,” dramatically, he recalls. Gill had to shut down his new product line and let his first-ever employee go. “It was a learning experience, but it was a hard time,” he says.

Thankfully, his core line of sauces was doing well enough to help the company weather the pandemic.

A chat with a Loblaws buyer in 2021 inspired Gill to, once again, expand his sauce line. He launched a sweet Thai chili sauce, a sweet and sour sauce and a peanut sauce later that year to great success. “It really took the company to a new level,” he says.

Naked Coconuts rebranded to Naked and Saucy in 2021. Its products are now in more than 3,000 stores nationwide.

And this year brought another significant change to Gill’s business—he moved his sauce production in-house and now co-packs private-label products for other brands. Gill plans to spend 2024 settling into the new changes, and he’s eyeing a move into the United States in 2025.

Gill has no regrets about leaving corporate life behind. “I know this is what I love to do,” he explains. “I literally feel like an artist when I sit at my desk, working through a problem, the same way someone makes music, paints a picture or builds a cabinet. When I’m working, it’s the same feeling.” CG

PAUL GILL What do you like best about your job?

I love that no two days are alike.

I’m dealing with ever-changing, complex problems. Being in an uber-competitive market, there’s a daily tension I’ve grown to love and that tension never goes away. There’s always something to be worked on and solved.

If you weren’t in the food manufacturing business, what would you be doing?

I’d be operating another business. I don’t know what type of business. It could be in tech, fashion or laundromats.

I’d be putting together another operation and trying to figure out how to grow it.

What’s the hardest decision you’ve had to make?

Letting people go, whether it’s employees or agencies I work with. It’s very hard on me because you’re affecting their livelihood … it’s not a decision I want to take lightly.

What’s your favourite product from your lineup?

I like our new keto coconut aminos because there is no taste compromise compared to soy.

It’s just so beautiful and light. I eat it with sushi, stir fry bowls, dumplings and gyoza.

What do you like to do when you’re not working?

I like playing sports, though I don’t play enough. If I can, I’ll join a pick-up game of basketball or tennis, or I’ll go for a run. I’m also very happy going to the beach and doing nothing at all. (The beach is) my spot where I can unplug and not think of work or what email needs to go out.

November 2023 || CANADIAN GROCER 9

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THIS LOGO STANDS FOR This logo represents a commitment to high standards in Canadian milk production. It stands for the sustainable practices that’ll help us reach Net Zero greenhouse gas emissions by 2050. It’s indicative of the way we care for our animals each and every day, and the dedication of Canadian dairy farmers to their communities.

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RETAILERS || SUPPLIERS || SHOPPERS || INSIGHTS

FINANCIAL HABITS

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FEELING SQUEEZED MILLENNIALS AND GEN Zs are important audiences for the grocery sector and, like a lot of the population, they are feeling the squeeze of cost-of-living increases. Leger’s sixth annual Youth Study sheds some light on how inflation is changing their shopping behaviour.

The study is based on a survey of 3,015 Canadians, with respondents divided almost equally between millennials (27 to 42 years of age) and gen Zs (11 to 26 years of age). Among all respondents, 39% were homeowners, 33% were renting and 26% were living with their parents.

When asked if the rising cost of living had changed their financial habits in seven key areas, 73% of respondents said “saving money,” followed by “foods” (68%), “bar and restaurants” and “clothing” (both 67%), “leisure and sports activities” (59%), “cultural outings” (53%) and “regular payment of your credit card or bills” (48%).

“The rising cost of living has impacted younger generations’

financial habits all around,” said Alison Watson, vice-president, public affairs, Western Canada, at Leger, during a webinar that highlighted the study results. “Quite frankly, we see [inflation] affecting them at higher levels than last year.”

The study also revealed that more than one-quarter of young people (29%) consider their personal finances to be in poor shape, more so with millennials than gen Zs (32% versus 25%). Only 22% of respondents said their personal finances “are in good shape.”

In addition, 51% of respondents said they lived paycheque to paycheque, up from 48% in 2022. “We see this proportion being higher among millennials compared to gen Z, as well,” said Watson.

A lot of this has to do with shelter costs. Nearly half of homeowners said their mortgages take up too much of their expenses (45%, up from 42% last year), while almost three-in-four renters (72%) feel their rent takes up too large a portion of their expenses.—Chris Daniels

November 2023 || CANADIAN GROCER 11

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about BEST QUALITY

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Ideas

BUMPS IN THE ROAD

SHUTTERSTOCK/IM_PHOTO

As trucking companies struggle to recruit drivers in a competitive post-pandemic job market, independent grocers feel the pinch By Mark Cardwell CANADA IS IN the throes of an acute shortage of commercial truck drivers.

The country is currently short some 20,000 truckers, according to a recent report from PwC Canada, commissioned

by Food, Health & Consumer Products of Canada (FHCP), titled Truck Driver Shortage in Canada.

That figure could soon reach 30,000, the report says, if actions are not taken by industry, business and government to recruit and retain new drivers.

“I’ve been in manufacturing a long time and there’s always been talk of driver shortages,” says Frank Scali, a supply chain expert who spent 22 years with Nestlé Canada before joining FHCP in 2019 as vice-president of industry affairs. “Now we know the reality.”

The report is based on data analysis, surveys, on-site visits at trucking facilities and executive interviews with large manufacturers, trucking companies and truckers.

Its findings paint a bleak picture of an industry with an aging workforce that is failing to connect with young adults. And independent food merchants are feeling the pinch of the shortfall.

Christy McMullen, co-owner of five Summerhill Markets in the Greater Toronto Area, says finding enough qualified, reliable drivers for the family’s fleet of five refrigerated trucks, which are used daily to shuttle perishable and other food items between its stores and from the Ontario Food Terminal, is a constant challenge.

“We have seven full-time drivers, but the frustration over long waits at delivery number of hours they can work is limited sites as the main irritants for drivers. by law,” says McMullen, who was named It also recommends a host of actions, vice-chair and director of the Ontario Food including more outreach to millennials, Terminal board in August. immigrants and non-traditional trucker According to McMullen, driver turnover populations, notably women, as well as has remained high since the pandemic, raising pay rates, creating and maintainwhen headhunters began actively recruit- ing a welcoming work environment and ing drivers from other industries and even investing in their trucks and equipment. home-delivery services such as Uber Eats.

Echoing Scali’s sentiments, Marco “Drivers used to be loyal,” Beghetto, vice-president comshe says. “But now we search munications of the Canadian “Drivers used for them everywhere: on Trucking Alliance (CTA), which to be loyal. social media, job websites— represents some 4,500 carriers, But now we even some guy who shows owner-operators and industry search for them up at the door will get a look. suppliers, says driver shortages everywhere When you find a good one, are nothing new in Canada. ... When you treat them like gold.”

“It’s usually a cyclical thing,” find a good She’s not alone. Kevin says Beghetto. “But COVID and one, treat them Schmidt, who owns Downall the disruptions in the suplike gold,” says town Family Foods in Winniply chain have changed everySummerhill peg with his wife Darcey and thing. There’s no new normal co-owner her brother Ryan Gingras, has right now.”

Christy to regularly deal with hoursHe says trucking companies McMullen long delays and even cancelare having trouble recruiting lations, often without notice, drivers in a very competitive by third-party carriers that deliver frozen, post-pandemic job market. “Every industry fresh and packaged foods to his store. wants and needs workers,” says Beghetto.

Schmidt says delays force him to redeThe seriousness of the driver shortage ploy staff when food shipments finally is not lost on everyday consumers, says arrive. Late deliveries can also result in Beghetto, pointing to a 2022 Nanos survey longer unloads and clogged store aisles. poll commissioned by CTA that found 85% “They really put a wrinkle in your day,” of Canadians were concerned with their says Schmidt. ability to get goods and products due to FHCP ’s report identifies working supply chain disruptions, especially percondi­t ions, pay, traffic congestion and ishable goods like food.

November 2023 || CANADIAN GROCER 13

Keep your coffee pods out of landfills

Through the Tassimo Free Recycling Envelope Program, you can recycle all brands of Tassimo T-DISCs that are sold in Canada for FREE! Scan to request a free envelope to get started.

Stewardship and

SUSTAINABILITY

Though inflation and interest rates (89%), labour shortages (76%) and supply chain bottlenecks (75%) are an ongoing concern for business leaders, the second annual BMO Climate Institute Business Leaders Survey finds that executives in Canada and the United States are increasingly paying attention to climate change.

And, based on a survey of 700 business leaders in both markets, the 2023 results reveal that many of those surveyed are already feeling the effects of climate change and this is driving them to think about mitigation plans:

Ideas

WEIGHING THE THREAT OF OZEMPIC ON SNACK SALES

By Mark Cardwell

48%

of respondents believe climate change is already affecting their businesses

81%

anticipate it will affect their businesses in the next five years

32%

of businesses have a plan in place to address it (up 6% from last year)

35%

SHUTTERSTOCK/ NATALIA VARLEI

are in the process of developing a plan U.S. business leaders (38%) are more likely to be moving forward with plans (up 10%) compared to Canada, where only 27% have a plan in place (up 3%) SOURCE: BMO CLIMATE INSTITUTE BUSINESS LEADERS SURVEY

IS THE GROWING POPULARITY OF weight-loss drugs taking a bite out of snack food sales?

No—at least not yet—say food marketing experts and grocers in Canada.

“It’s not a stretch to think a rise in the use of these drugs would impact people’s consumption of foods that are high in fat, salt and sugar,” says Jordan LeBel, a food marketing professor at Concordia University in Montreal. “But there’s no evidence-based research that suggests that’s happening.”

The issue made headlines in early October when, in an interview with Bloomberg, Walmart U.S. CEO John Furner suggested the retailer had seen a “slight change” in food purchasing habits of people taking weight loss and diabetes drugs such as Wegovy and Ozempic, compared to those who don’t.

His remarks came on the heels of a research note by Morgan Stanley that suggests an estimated 24 million Americans—or 7% of that country’s population—will be using hunger-suppressing drugs by 2035. The note said this could lead to “softer demand” for unhealthier foods and high-fat sweet and salty snacks.

LeBel, however, is skeptical that weight-­ loss drugs are starving snack food sales.

He pointed to strong sales figures being posted by Hershey’s and Nestlé, which reported double-digit growth in its confectionery brands in mid-October.

“Demand is not down,” says LeBel, whose research focuses on the role that pleasure plays in people’s food choices.

“But people are eating differently.” He says the pandemic upended traditional workplace and social behaviours related to noshing. “If you work from home now you may no longer need those predetermined office snacks.”

He says everyday eating rituals like late-night snacks, end-of-day comfort foods and even chicken wings and nachos on game day have also been affected by various trends and societal factors.

They include inflation, supply chain disruptions and the vast array of both decadent and healthier sweet and sugary snack food options that now compete for share of stomach on store shelves.

For his part, Winnipeg grocer Kevin Schmidt says demand for snack foods remains strong at his store. “I haven’t seen any big changes in sales,” says Schmidt, who owns and operates Downtown Family Foods. “If anything, they’re up from last year.”

Alain Royer, who owns a small store near the Mont-Sainte-Anne ski resort, a half-hour drive northeast of Quebec City, says he’s selling record amounts of chips, peanuts, mints and candies—though sales of gum and chocolates are down. “It might be different elsewhere,” says Royer, “but weight-loss drugs haven’t had any impact on our business.”

November 2023 || CANADIAN GROCER 15

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Ideas

TOUGH STUFF

“Being resilient is turning challenges into opportunities or setbacks and failures and turning them into lessons for success. Ten years ago, I left Brazil to do my masters [degree] in Lebanon, all in English, which is not my native language. I left the comfort of my house, my family, my friends and a stable, good job and career path for adventure in something new. When you’re in the situation it feels like you won’t get through it, but you get through it and you look back and say, ‘It wasn’t that bad.’”

—Randa Hassanie, team lead, Pattison Food Group & e-commerce, Tree of Life Canada

“While working at another company, I used to say to the team, ‘I’m going to go find my centre, I’ll be back.’ I would go into my office and close the door. It wasn’t that I was angry or whatever, sometimes you need to reset.

And being able to say to your team that I’m okay with being able to reset gives them the allowance to be broken, to be imperfect and to come to the table and say, ‘This isn’t working I need your help.’”

GOLDMEDIA.CA

—Karen White-Boswell, director, external communications, Sobeys

It’s a common misconcep­ tion that vulnerability in the workplace is a sign of weakness when, in fact, it helps build connections and creates an environment where people can be themselves, speak their minds and openly share ideas. But getting there can be tough. During a keynote presentation and panel discussion at Canadian Grocer’s recent Star Women in Grocery Awards ceremony, speakers shared stories of resiliency, perseverance, embracing failure and the importance of authentic leadership (yes, it’s okay to cry).

By Kristin Laird

“The thing about failure is it’s not static.

You don’t fall and stay still. Although, I appreciate as we get older it’s a little hard to get up sometimes. Failure—particularly for people who aspire to be leaders and associate success with leadership—is very uncomfortable, you can learn a lot from that.

You learn you don’t have to do everything by yourself. There’s probably a whole host of people who can step in and help and kindly let them do that, which was a big lesson for me. Some of your biggest growth moments come from your failures.”

“As our industry transitions from a few crazy years of the pandemic into an economic downturn and a future governed by a code of conduct or interventions, stand up for what is right, for what you believe in and approach the future as an opportunity with transparency and trust. And for the men in the room, here are some secrets you may find of value—it’s okay that women cry. We are not weak, we are definitely not upset, and somebody is likely not ill, you likely just pissed us off.”

—Brenda Kirk, keynote speaker and SVP merchandising and procurement, Pattison Food Group

“There’s a level of trust and transparency that we have at Loblaw and within my team specifically. We take a leap of faith sometimes and sometimes you cross your fingers and hope for the best. We know we’re doing it with the best intentions, so that’s okay. We make mistakes, but we need room to make those mistakes. We need to have a culture that supports each other and allows for those mistakes and allows us to bounce back even better. “ —Lori Verna, vice-president, supply chain systems, Loblaw Technology & Analytics

—Julie Filipuzzi, head of customer experience, Unilever Canada

November 2023 || CANADIAN GROCER 17

STAR sissauga, Ont.’s International Centre on the morning of Sept. 20 to celebrate Canadian Grocer’s 2023 Star Women in Grocery Award winners.

More than 550 attendees were on hand to help recognize this year’s 57 winners for their remarkable career achievements and contributions to the industry.

The morning kicked-off with Brenda Kirk, SVP merchandising and procurement at Pattison Food Group, and a 2015 Star Women in Grocery winner, sharing stories from her “wildly imperfect” career and stressing the importance of perseverance and leading with authenticity—a common theme that carried into a panel discussion featuring four of this year’s winners. Moderated by editor-in-chief Shellee Fitzgerald, Tree of Life Canada’s Randa Hassanie, Unilever Canada’s Julie Filipuzzi, Sobeys’ Karen White-Boswell and Loblaw’s Lori Verna discussed the importance of embracing failure and, of course, authentic leadership (read more on page 17). CG

18 CANADIAN GROCER || November 2023

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November 2023 || CANADIAN GROCER 19

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EATING IN CANADA || Kathy Perrotta

The great realignment

Canadians are putting their personal health and wellness needs at the forefront

More than one-third (33%) of decisions in an average day are motivated by the demand for healthy and nutritious foods and beverages

Canadians’ needs, preferences and choices are being impacted by a colliding set of societal, cultural, economic and geo-political forces. Canadians are also resetting their health and wellness priorities.

The trend toward balanced health was well underway before the pandemic, but the lockdown period prompted a short-term shift toward collective well-being as we cared for each other. However, as things have normalized, Canadians are once again focused on being proactive with their health and are taking control with personalized health goals.

Their approach continues to focus on nutrient and nourishment intake, physical benefits and emotional well-being to support efforts to live well with healthy longevity. (Societal health or the well-being of the world and its citizens still factors into conscious health decisions.)

Ipsos FIVE consumption tracking reports that more than one-third (33%) of decisions in an average day are motivated by the demand for healthy and nutritious foods and beverages. This realignment of personal regimes offers a unique opportunity for retailers, manufacturers and foodservice operators to meet renewed expectations.

NUTRIENT AND NOURISHMENT TERRITORY The traditional health focus on nutrient and nourishment intake—more of the good and less of the bad—remains the largest territory influencing just under half of health-related decisions. And more than one in six label-reading consumers (64%) report that on-package detail from label flashes, nutrition facts tables or ingredient labels impacts their decision on whether to buy a product.

Country of origin, calories, sugar, protein, fibre, organic, artificial-free ingredients and flavours, and product naturalness all rank as important labels

influencing choices. It is important to note that nutrient priorities do, however, change by product.

Though this space is not the fastest-growing territory, it will remain important as new front-of-package labels hit store shelves and consumers see more labelling around sugar, saturated fat and sodium content. In FIVE’s ongoing tracking, more than twothirds of adults (67%) report that these labels will impact their future buying decisions.

PHYSICAL BENEFITS TERRITORY Undoubtedly, the pandemic heightened consumers’ awareness of the power of foods, beverages and their functional ingredients to aid in their physical well-being. Emanating from that experience is the rising consumer focus on immune-boosting foods, beverages and ingredients. Immunity motivated choices lean to options that have a functional, fortification or fermentation element. Interestingly, beverages, led by strong innovation in this space, are more often selected. Mined from the FIVE database, the top item choices are: 1. Fresh fruit, 2. Juice, 3.

Enhanced water, 4. Yogurt, 5. Hot tea, 6. Bread, 7.

Cereal, 8. Milk, 9. Kombucha.

Ingredients such as turmeric, ginger and garlic are also being included in Canadian diets for their perceived immune-boosting benefits.

EMOTIONAL WELL-BEING TERRITORY This territory is the fastest-growing health space led by demands to balance moods, boost focus and concentration, and relieve stress.

Interestingly, the rising demand for products that aid in emotional well-being shows strongest development among generation Z and millennial cohorts (11 to 42 years old). These items also hold a strong appeal to multicultural Canadians led by those from Chinese and South Asian origins.

These important groups are the fastest-growing cohorts in the Canadian population and represent the largest share of working adults.

The realignment of health priorities represents a huge opportunity for retailers and manufacturers. As demand grows, success in this space will be highly dependent on personalized communications rather than opting for a mass messaging approach.

Aiding consumers in their consumption decisions is key. Consider the integration of on-site or online nutrition consultants, and expert blogs and podcasts to assist consumers in their wellness journeys.

When it comes to decisions around living a better quality of life with optimal longevity, rest assured Canadians are listening and willing to invest. CG

Kathy Perrotta is a VP of market strategy and understanding with Ipsos Canada and leads the FIVE ser­vice, a daily diary tracking of what individuals ate and drank yesterday across all categ­ories/brands, occasions and venues.

Kathy.perrotta@ipsos.com

November 2023 || CANADIAN GROCER 21

Lavazza Nespresso* Compatible Capsules

*Lavazza is not affiliated with, endorsed or sponsored by Nespresso

CATEGORY CLOSE-UP

coffee Bring on the quality coffee—at home For many of us, it’s coffee time year-round. But especially as the temperatures start to dip across Canada, there is nothing more comforting and pleasing than a steamy cup of good-quality coffee.

According to the World Population Review, Canada is among the top 10 countries in 2023 where people consume the most coffee per person—the only nonEuropean country on the list. The latest 2022 statistics from the Coffee Association of Canada (CAC) show that 73% of Canadians drank a coffee in the past day, with the average number of coffee cups consumed at 2.7 daily.

But with ongoing inflation and the tightening of household budgets, most of us are still opting to make coffees at home—even if we’re heading out to work. With almost a quarter of Canadians noting that their financial situation is much or somewhat worse than the previous month, CAC numbers show that 33% of Canadians say it’s more affordable to make coffee at home. In fact, only 27% had a coffee prepared out of home in 2022, compared to 40% pre-pandemic.

Sustainable choices for home In recognizing that consumers want the convenience of making coffee shop quality at home, coffee producers

are offering a bevy of authentic, premium lines to choose from, without compromising on sustainability. Case in point, companies like Lavazza are providing premium flavour, quality coffee blends in single-use, CO2-neutral aluminum capsules that are compatible with Nespresso machines and good to the planet.

“Since the very beginning, the Lavazza Group has put a focus on combing excellence, sustainability and innovation to offer maximum quality with minimal environmental impact,” says Lauren Laventure, trade marketing manager at Sofina Foods. “With the single serve coffee category, consumers are especially concerned about sustainability and aluminum pods are the perfect solution to address this matter, with its new range Lavazza has become the worldwide market leader in the Nespresso compatible category and it is the fastest growing brand across the largest 15th markets worldwide, including Canada where Lavazza reached 25% market share of the segment.”

In helping shoppers discover new sustainable coffee varieties to make at home, grocers are encouraged to provide samples and regularly highlight new lines.

“These days more people are open to sampling again, and it’s about offering those powerful moments in-store that connect people to new flavours and options,” says Laventure.

Top Shelf Picks Premium taste on the go With a combination of six varieties of Arabica beans, Lavazza’s Qualita Oro brand provides a symphony of flavours enhanced by fruity and floral notes.

Qualita Rossa products from Lavazza feature a unique blend of Robusta and Arabica beans delicious with or without milk. **For ultimate convenience, both of these lines are now available in aluminum capsules compatible with Nespresso original machines too!

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER || November 2023

success Behind every is effort… effort Behind every is passion… passion Behind every with the is someone try. courage to

Congratulations Jamie Nelson and Susan Niczowski on your 2023 Golden Pencil Award!

from your friends at

Golden Pencil

GOLD STARS

By Shellee Fitzgerald and Kristin Laird Photography by Mike Ford

Meet the 2023 Golden Pencil winners Jamie Nelson and Susan Niczowski One is a grocery veteran who has climbed the ranks to the c-suite of one of Canada’s most admired retailers, the other has built a fresh food empire. Both are the recipients of this year’s Golden Pencil Award, the grocery industry’s most prestigious honour.

Handed out annually since 1957 by the Food Industry Association of Canada, the Golden Pencil Award recognizes long-standing contributions of grocery leaders to the industry and to their communities. On Nov. 20, Jamie Nelson, chief operating officer, Pattison Food Group, and Summer Fresh Salads founder and president Susan Niczowski will be celebrated as 2023’s Golden Pencil winners. Read on to see why these two individuals are so deserving of the accolade.

The Golden Pencil Awards will be handed out at Toronto’s Fairmont Royal York on November 20. For tickets visit groceryconnex.com

November 2023 || CANADIAN GROCER 25

Congratulations Jamie Nelson

Chief Operating Officer, Pattison Food Group

A friend and mentor to many, Jamie has built a strong reputation as a fair, humble and honest leader. Jamie’s contributions to the company and the grocery industry for more than 40 years have made a significant impact on countless people across Western Canada.

Congratulations on your 2023 Golden Pencil Award, Jamie!

Golden Pencil

JAMIE NELSON

Chief operating officer, Pattison Food Group

L

IKE MANY GROCERY execs, Jamie Nelson got hooked on the business early on. In Nelson’s case, it was a part-time job at Overwaitea Foods in Mission, B.C. that piqued his interest in grocery and he’s never looked back.

“I love the pace of the grocery business,” says Nelson, when asked what keeps him passionate about the business after all these years. “It’s always moving and changing; there’s never a dull moment.”

Indeed, Nelson’s 43-year career has been a steady ascent that has taken him from the store floor to the executive suite where today he serves as chief operating officer of B.C.-based Pattison Food Group, an organization that includes fast-growing supermarket chain Save-On-Foods as well as Buy-Low Foods, Choices Market and others under its umbrella.

An introvert by nature, Nelson says a skill that has served him well as a leader is the ability to sit back and listen. “When you truly listen to the challenges [of your team members] you can support and help them come up with the solution,” he says, adding that to be a good leader, “you need to build trust, and you do this by being genuine and showing people respect.”

Nelson learned early on the value of community and giving back. In 1995, when he was promoted to store manager at a Red Deer, Alta. location—back then a relatively new market for Save-On-Foods— getting out into the community and supporting local events and causes was “hugely important.” “It really benefited me not only as a leader, but as a person,” says Nelson. “When you work in the stores and live

in many different communities, you get the opportunity to be part of great charitable initiatives.”

On top of his day job, Nelson has contributed to the wider industry by participating on several industry boards over the years and most recently he stepped up to the role of chair of the Canadian Federation of Independent Grocers (he’s been on the board since 2015), where he will advocate for the country’s indies.

When asked what he’s most proud of in his long career, Nelson says he’s “very proud and thankful that I have had the opportunity to be part of the growth of what started as Overwaitea Foods and now is a company of 30,000 people that we call the Pattison Food Group.”

November 2023 || CANADIAN GROCER 27

Grocery Connex Monday, November 20, 2023

10:00 am - 6:00 pm (edt) • Fairmont Royal York, Toronto

EVOLVING RETAIL

Attend the premier event for Canadian grocery executives

• Retail Leadership Panel • Golden Pencil Awards & GenNext Awards Presentations • Insightful keynotes from NielsenIQ ... and more!

Special Social Media Presentation by: A full day event featuring: DANIEL BURRUS

DEB CRAVEN

CARMEN FORTINO

Global Futurist, Strategic Advisor and Best-selling Author

President, Longo's

EVP, Ontario Division Head and National Supply Chain, Metro

GONZALO GEBARA

DARRELL JONES

MICHEL MANSEAU

President & CEO, Walmart Canada

President, Pattison Food Group

SVP & GM, Canadian Consumer Business Unit, Kruger Products

JAMIE NELSON

SUSAN NICZOWSKI

GREG RAMIER

Founder & President, Summer Fresh Salads Inc.

Chief Operating Officer, Pattison Food Group

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Get your tickets before it’s too late! GroceryConnex .com Presented by:

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Golden Pencil

SUSAN NICZOWSKI

President and founder, Summer Fresh Salads Inc.

S

UMMER FRESH SALADS president and founder Susan Niczowski had her sights set on a career in dentistry, but discovered “looking in someone’s mouth 365 days of the year” wasn’t for her. Instead, Niczowski turned her passion for “great quality, good food” into a 30-plus year career in consumer packaged goods.

After graduating with a bachelor of science in chemistry and working as a microbiologist at a food company in Toronto, Niczowski identified a need in the market for fresh, premium prepared foods and got to work in her mother’s kitchen experimenting with flavours.

Using a “technology that preserves vegetables naturally,” Niczowski developed salad recipes—a Greek pasta salad and a summer rotini among them—that were sold in bulk to deli counters and foodservice clients.

“I always loved salads and created 18 recipes to manufacture that were fresh, all natural, no additives, no preservatives, no MSG, and started knocking at various deli doors,” she says.

And with this, Summer Fresh Salads Inc. was born.

Operations quickly moved to a 3,000-sq.-ft. manufacturing facility in Woodbridge, Ont., says Niczowski, and product lines expanded to include hummus and dips sold at grocery stores.

Like every entrepreneur, Niczowski has faced some challenges along the way. Still, she handles it with a can-do level of optimism. “From raw material prices to raw material supply to equipment to employees … every day is a different challenge,” but, “you dig down to find out what the actual problem is and get it resolved and get to the next step.”

Today, Summer Fresh boasts more than 2,000 recipes that Niczowski says can be manufactured at any time and the product lineup is constantly evolving to include on-trend flavours. (Summer Fresh recently launched a line of dessert hummus and decadent cheese spreads.)

“Food is fashion,” says Niczowski. “As the fashion industry brings out new runway items, Summer Fresh creates and develops exciting, new, fun foods that are flavourful, that are on trend.”

The Golden Pencil Award commemorates more than three decades of remarkable accomplishments for Niczowski and Summer Fresh, and learning she was one of this year’s recipients, she says, has been one of the most exciting moments in her career.

“Starting off in the food industry, I would go to these events and always aspired to be at that podium,” she says. “And when I got the call, I was taken aback. I was like, ‘Wow, I didn’t expect that.’” It’s definitely something to smile about. CG

November 2023 || CANADIAN GROCER 29

© 2023 Genetec Inc. Genetec and the Genetec logo are trademarks of Genetec Inc., and may be registered or pending registration in several jurisdictions.

Speed up investigations and reduce retail shrink Genetec™ Security Center Transaction Finder is a POS integration with exception-based analytics. The module helps you quickly and easily identify theft using a single application.

To learn about retail loss prevention solutions visit genetec.com/transaction-finder

Loss prevention

THE BATTLE AGAINST THEFT AND G LOSS With store theft, organized retail crime and cybercrime on the rise, how can retailers fight back?

GETTY IMAGES/TARIKVISION

By Rebecca Harris

ROCERS LIVE IN A WORLD of high inflation, rising costs and already-thin margins, so it’s especially painful when profits just walk out the door.

Whether from sticky fingers at the self-checkout or sophisticated organized crime rings, theft and loss has become a big problem for retailers. According to Statistics Canada, rates of shoplifting jumped 31% in 2022 compared to 2021. The Retail Council of Canada (RCC) says some of its members are reporting a 300% increase in thefts since 2020, pegging the losses at $5 billion a year. In the United States, the National Retail Federation found that shrink—primarily driven by theft and organized retail crime—represented US$112.1 billion in losses in 2022, up from US$93.9 billion the previous year. “[In general], loss is on the rise, more so with external theft, although some retailers report an uptick in internal theft,” says Rui Rodrigues, executive advisor, loss prevention and risk management at RCC. Beyond physical theft, with the move to e-commerce and omnichannel retail, “organized criminals also now perpetuate more fraud crimes on the online space,” he adds.

“So, there’s an increase across the board and it really started to escalate coming out of COVID.” In the grocery sector, higher food costs are undoubtedly driving some Canadians to steal. “There is desperation out there, for sure. A lot of people are struggling,” says Sylvain Charlebois, a professor in food distribution policy and senior director of the Agri-Food Analytics Lab (AAL) at Dalhousie University.

But, it’s not always about stealing a loaf of bread to feed your starving family—some thieves are seeking revenge. “I do believe a very small portion of people want grocers to pay because they think they’re profiteering,” says Charlebois, pointing to a recent

November 2023 || CANADIAN GROCER 31

Loss prevention AAL survey that found 82% of Canadians believe profiteering is somehow associated with rising food prices.

RCC’s Rodrigues notes that during the pandemic, there was an increase in brazen, aggressive behaviour in retail stores. “People were wearing masks and getting more confident with concealing their faces,” he says. “We also saw a reduction in response from police and courts to prosecute those offenders.”

Now, the right side of the law must play catchup.

“We recognize police resources [and prosecutors] are stretched trying to make up for lost time and getting through a back channel of cases,” says Rodrigues.

“But what we’ve seen is this confidence rising in the criminals, knowing there’s less and less consequences for their actions.”

When it comes to organized retail crime, thieves are taking advantage of the popularity of resale marketplaces. “[Organized retail crime] is definitely on the rise because the number of outlets is on the rise,” says Rodrigues. Social platforms, for example, allow criminals to sell directly to end users.

There’s also “fence operations,” which are physical locations used by organized retail crime rings to sell stolen merchandise. Rodrigues notes many mass retailers stock electronic goods, housewares, tools and other goods that can be easily taken and sold in a fence operation.

Generally, though, everything in the grocery store is fair game. “[Some] items might get targeted because they’re more in high demand on the black market, but I think in grocery, everything gets targeted,” says Rodrigues.

DEFENDING AGAINST THEFT

Amid the rise in retail theft, grocers must find new ways to mitigate risks. Stephen O’Keefe, president of retail consultancy Bottom Line Matters, notes that in the past, any type of security system was generally a standalone feature—a camera here, a security gate there. Now, “retailers put pressure on security-solution partners to get together and share knowledge to come up with a better solution: an integrated one,” says O’Keefe. “The outcome has been described as more of a security ecosystem.”

For example, if a security gate system is breached by a thief, the incident notifies security cameras to begin recording and an audio message is relayed to a company executive that a breach is underway.

“Additionally, technology is being used to collect evidence for the purpose of prosecuting offenders,” says O’Keefe. “While we hear of complaints that employees are restricted from doing anything when they see a shoplifter, the truth is the company doesn’t want the employee hurt and, behind the scenes, video evidence is being compiled. There are cases where a person is charged with multiple counts of theft when they thought they got away with it.”

In O’Keefe’s view, using technology to combat theft is essential. “First, it provides the type of deterrent

MITIGATING VIOLENCE IN STORES Hand in hand with the rise in retail crime is a rise in violence in retail stores. “Every day now, we hear about violent incidents. We hear about incidents where weapons are utilized,” says Rui Rodrigues, executive advisor, loss prevention and risk management at Retail Council of Canada (RCC). “Pre2019, we may have heard about that once every three months.

Now, it’s every day.”

That means retailers must take a serious look at how they train staff and keep their employees and customers safe. As it’s doing with theft prevention, RCC advocates for collaboration with local police services, courts and government agencies. It’s also working with partners to develop de-escalation training and best practices that can be used by retailers and their employees.

For Rexall, having intel on repeat offenders [via its retail crime intelligence and loss prevention platform] helps frontline employees stop thieves in their tracks.

“When a cashier starts their shift, they get to look through [reports and dashboards] and see all these people who we’re aware of—and that they should be aware of,” says Daryl Blackmore, director of asset protection at Rexall. “If that person walks through the door, it hopefully doesn’t take [long] for them … to be noticed and identified. It’s that first cashier having the ability to call out to that person saying, ‘Hey, you’re not allowed to be in here. You’ve already been told your business isn’t welcome here. You need to leave. I’m calling the police.’”

Blackmore maintains this is the company’s best defence. “These people don’t want to be acknowledged or recognized. As soon as you make that connection, they typically leave the store. It avoids so much of the violence that we’ve seen because you don’t end up having that interaction at the

point of it already being an issue.”

Nada Ebeid is director of signature brands in Canada for Genetec, which offers physical security solutions such as video surveillance systems, access control and automatic licence plate recognition. In Ebeid’s view, having proper situational awareness is the best strategy to mitigate retail violence, which includes having real-time information on what’s going on.

Retailers can also automate triggers to deter or de-escalate situations in stores. For example, if a retailer is monitoring what’s happening in stores and the system detects loud screaming at a location, that could trigger an audio message over the PA system directed at the affected employee. It would say something along the lines of, “We see what’s going on … a manager will be there shortly to support you.”

“Let’s say [the perpetrator] was me. If I hear an audio message saying what I’m doing right now is being witnessed by those beyond the person in front of me … I may think twice,” says Ebeid.

“All of these things would help de-escalate. It’s difficult to say that technology will eliminate it.

It’s more about being able to react quickly in the right way. And the best way of doing that is having the information in real time so that you can make those decisions.”

With these technologies, privacy is extremely important, she adds.

“As retailers consider implementing more technology to help [mitigate violence], respecting the privacy of all is key.” That means having the proper cybersecurity mechanisms in place and choosing technologies that follow the best practices of cybersecurity.

But it doesn’t end there, adds Ebeid. “It’s also [making] decisions on how you choose to store [and share] the data, whether it be with internal or external stakeholders.”

November 2023 || CANADIAN GROCER 33

SHUTTERSTOCK

Loss prevention measure that would prevent a first-timer from doing something dishonest,” he says. “Secondly, it allows for a safer interaction with a hardened repeat offender.”

For pharmacy chain Rexall, its approach to loss prevention has evolved because of the rise in organized retail crime. “It is what our focus is around, it’s what’s keeping us up at night … and it’s the biggest challenge we face,” says Daryl Blackmore, director of asset protection at Rexall.

In Rexall pharmacies, the categories most targeted by organized crime rings are health, beauty and accessories, including shaving, oral health and baby products. Organized crime rings do what’s called “shelf sweeps,” where they empty sections completely.

“That’s what makes them so much more damaging to us than the petty thieves who take one or two items for personal consumption,” says Blackmore.

To combat theft, Blackmore says Rexall put more resources towards it, including hiring staff to lead investigations and work with law enforcement and other retailers. The other big piece was leveraging technology. Rexall uses a retail crime intelligence and loss prevention platform by Auror. Among its features, the platform allows retailers to report detailed theft incidents, observe patterns of repeat offenders, spot organized retail crime groups, and receive realtime alerts of offenders from nearby stores.

“At the store level, it’s an awareness platform—to have our employees know who the bad actors are before they walk through the door,” says Blackmore.

“It’s meant to give them information so as not to have an interaction, other than calling the police, because they already know what this person is likely to do.”

Bobby Haskins, vice-president of retail partnerships at Auror, says the key to preventing theft is having intelligence and robust data that shows retailers “the top 10% of people who are responsible for (up to) 80% of your loss.” They also need to make the intelligence actionable, getting it to the right person so they can make the right decisions.

“That’s a huge tactic [used by a lot] of our retailers that are having success in this space, as they’re making sure their frontline teams are empowered with knowing who the individuals are that are stealing from them over and over again,” says Haskins. “Then, they can either take action if they’re approved and signed off to do that, or they can be the best possible witness and observe, report and get that information to their loss prevention teams.”

While technology is a powerful tool, good old-fashioned people skills can also be a deterrent, especially at the self-checkout—a hotspot for theft. Last year, Auror collected self-checkout theft data based on 2.5 million events across 10,000 North American grocery stores, not including specialty, big box or department retailers. The research found that 39% of all thefts within grocery stores occur at self-checkout, with an average dollar amount of US$120.

To deter theft, Haskins says having a high-quality

WHICH RETAIL SECURITY MEASURES ARE CANADIAN SHOPPERS IN SUPPORT OF?

SECURITY CAMERAS

88%

ELECTRONIC ANTI-THEFT ALARMS

85%

SECURITY GUARDS

78%

LOCKED DISPLAY CASES

74%

SECURITY MIRRORS

73%

SOURCE: LEGER’S RETAIL SECURITY SURVEY, AUGUST 2023

cashier in the self-checkout area who engages and interacts with customers makes a huge difference.

“It’s the people and the process piece,” he says.

“There isn’t a silver bullet of technology. It’s putting them all together and empowering your teams to make the right decisions. That’s the magic sauce that we see a lot of the time for retail.”

DON’T ‘X’ THE CUSTOMER EXPERIENCE In the battle against theft, retailers must balance their risk mitigation measures with the customer experience. Some retailers, for example, are locking up certain products, which can cause frustration for shoppers and result in lost sales.

Rexall’s Blackmore notes that many big-box stores are starting to put products such as toothbrushes and deodorant behind lock and key. “That is not the direction I want us to head in,” he says. “It’s about finding solutions that take away some of the risk, but don’t take the accessibility away from our customers because we all know what the end result of that is going to be. It’s not a long-term successful play because it is going to impact sales considerably.”

A recent survey on retail security by Leger found Canadians are divided on retailers’ anti-theft measures. A wide majority support the implementation of security cameras (88%) and electronic anti-theft alarms (85%), and there’s also support for having security guards (78%) locked display cases (74%) and security mirrors (73%). However, Canadians are less on board with measures such as store employees checking receipts upon exit (52%) and requiring customers to scan their IDs to make a purchase (17%).

AAL’s Charlebois observes that loss prevention technologies tend to be more visible in the United States compared to Canada. “They don’t shy away from putting tags on products you can see. In Canada, it’s more subtle,” he says. “I think grocers in Canada are very conscious of the fact that they don’t want to compromise the experience for most people who are [acting] in good faith. So, why compromise the experience for 99% of the people when you’re just looking for the 1% who may be tempted to steal?”

ANOTHER PIECE OF THE LOSS PUZZLE: CYBERCRIME

Theft of inventory isn’t the only loss grocers are contending with. Their data is also at risk with the rise in cybercrime. Many cyberattacks target customer information, which criminals can sell on the dark web or use to commit fraud and identity theft. Cyberattacks are also costly. According to an IBM survey of 26 victimized organizations, the average cost of a cybersecurity breach in Canada is $6.94 million.

Like physical theft, the rise in cybercrimes against retailers goes back to the pandemic, when retailers

November 2023 || CANADIAN GROCER 35

WHAT’S

NEW Sea Salt & Pepper Pistachios The new Wonderful Pistachios Sea Salt & Pepper No Shells adds a dash of excitement to typical snacking routines with its combination of bold sea salt and spicy black pepper – giving a little kick to the nutty goodness of pistachios. Pistachios are one of the highest protein snack nuts, and with six grams of protein and three grams of fiber per serving making them a smart and healthy snack option for Canadians.

Doing Good Has Never Been This Sweet This chocolate bar is designed not only to taste great but to do good. When Canadians purchase a Lindt One for One bar, a meal will be donated to someone in need. That’s because 100 percent of proceeds are donated to Second Harvest, an organization that works with thousands of businesses, charities and nonprofits to give Canadians experiencing food insecurity access to the nourishment they need.

New In The Coffee Aisle Zavida Coffee Roasters has launched the Keurig-compatible Discovery Variety Pack (Breakfast Blend Light Roast, 100% Colombian Medium Roast, French Roast, Hazelnut Vanilla, Canadian Maple and French Vanilla) and the Flavour Explosion Variety Pack (Hazelnut Vanilla, Canadian Maple, French Vanilla, Cinnamon Bun, Chocolate Fudge Brownie, Crème Brûlée, Apple Pie, Pumpkin Spice and Pecan Pie). Both packs contain 44 single-serve pods.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER || November 2023

accelerated their digital transformations. That meant implementing several new technologies that expose them to risk.

Dishank Rustogi, national leader, cyber risk management and transformation at BDO Canada, says when retailers implement emerging technologies such as point-of-sale systems, cloud-based systems, IoT devices, interactive digital signage, mobile applications and generative AI, it essentially increases their overall attack surface. “[That means] the way an attacker can come in—and the opportunities for them to come in—have increased because of all these new, additional technologies,” says Rustogi. “The challenge [for grocers] is the rate at which the technology has grown is not the same as the rate of pace at which the appropriate risk mitigation measures have been implemented.”

There are a few reasons for that. Rustogi says a shortage of cybersecurity professionals, budgets not keeping pace with technology and a general lack of awareness at the executive and board level all contribute to the problem.

While there’s no easy solution for cybercrime prevention, there are many ways to mitigate exposure. For grocers, it’s vital to secure their pointof-sale systems, which include credit card and personally identifiable information. “In most cases, grocers are working with third-party pointof-sale system providers,” says Rustogi. “So, they need to make sure there is adequate due diligence performed before they get into that relationship.”

Other tactics Rustogi recommends are securing cloud-based applications, identifying regulatory requirements and ensuring compliance, encrypting data and implementing a zero-trust access strategy, which maintains strict access controls and denies access by default.

“The last one is awareness and training. It’s extremely important,” says Rustogi. “You can have all the appropriate measures from a technology perspective to safeguard your information … but people are always the weakest link because they have access to information and they can be deceived into giving that information out.”

While it may seem that losses are coming from all directions and there’s no end in sight, there are positive developments. A year and a half ago, RCC formed a loss prevention advisory committee, which identified key priorities such as addressing increased organized retail crime, increased violence in stores, and collaborating with police, justice and government. It’s also working to create a joint-force operation across the country to facilitate information-sharing with retailers and the police.

Rodrigues is optimistic. “In my 30 years, I’ve never seen the level of people at the table talking together than I have now,” he says. “So, just bringing police, justice and members of government to the same table to meet every single month and talk about the issues is an amazing step.” Certainly, grocers will be hoping thieves take note. CG

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Retail Media Networks

UNLEASHING THE POWER OF RETAIL MEDIA NETWORKS Leveraging their digital assets in-store and online, grocers can generate new revenue streams and remain relevant to shoppers

By Rosalind Stefanac THERE IS GOOD REASON many are calling retail media networks (RMNs) the latest and greatest opportunity for grocers and brands. With a growing number of people spending time online—and realizing the ease of online shopping—RMNs open new potential advertising revenue for grocers and give brands a more targeted way to reach shoppers.

A strategy where retailers use their own digital properties to sell advertising to brands, there’s no disputing that RMNs are gaining momentum as digital ad spending continues to accelerate. According to the latest data from Statista, digital media ad spend worldwide is expected to reach US$126 billion by the

end of this year and grow to US$176 billion by 2028.

“What makes retail media so compelling is that it gives advertisers the ability to connect with their target audience when they are in a purchasing mindset, whether they are looking to buy in that moment or are planning a future purchase,” says Leanne Gibson, vice-president and managing director of Walmart Connect Canada, which provides a platform for advertisers to reach shoppers through various channels.

Walmart has built a robust omnichannel strategy that Gibson says allows advertisers to connect with shoppers in-store and online. In-store has been actualized through digital screens, signage and audio ads,

November 2023 || CANADIAN GROCER 39

Retail Media Networks while online tactics include search, display, social media and influencer programs.

Since launching its retail media division in 2015 in Canada, Gibson says Walmart has evolved its offerings beyond just awareness tactics to include performance tactics that measure a campaign’s return on ad spend both online and in-store. “[Brands can] close the loop and measure the effectiveness of their advertising strategy and see the return on their investment,” she says.

“In the future, we expect to see continued personalization in our offerings and more brand lift measurement opportunities.”

ARE RMNs FEASIBLE FOR MOST GROCERS?

For those still questioning the need to invest in RMNs, consider that GroupM, the world’s largest media buyer, is predicting revenue from retail media, which the company defines as including ad revenue from last mile delivery services, will eclipse TV ad revenue (including connected TV) between 2026 and 2028.

And the latest data from Kroger’s retail media branch, Kroger Precision Marketing, shows that 75% of targeted online display impressions and clicks were from new-to-the-brand households, with one in four of these new shoppers becoming repeat purchasers. (See sidebar for more on why RMNs are buzzing now.)

Mercātus is an e-commerce platform provider that helps grocers create seamless shopping experiences across their digital channels. President and CEO Sylvain Perrier warns that those who aren’t in this space or in the process of building out some sort of comprehensive retail media program are practically surrendering their dollars to Instacart and every other grocery retailer already doing it.

While the grocery giants are better equipped with the capital, resources and scale to develop robust RMNs, Perrier says these types of programs aren’t out of reach for smaller grocers. In February, the Independent Grocers Alliance teamed up with digital firm Ideal by Design House to create the first RMN for independents in the United States. Not only can independent retailers partner with trade associations and vendors who can help them build out a program that gives them presence and scale, he says, “they can back that up with quicker, faster, more nimble programs that are more personalized and generally more difficult to execute at a national level.”

PREPARING BEFORE THE LEAP

Yet, even with all the potential benefits of implementing an RMN, analysts and grocers already running successful programs stress the need for pre-planning. Having a strategy is key, both from a technology and resource perspective, as well as in figuring out a grocer’s unique value proposition in the market that will draw those brands in. “Retailers want to jump in, but with so many retail media networks emerging, what’s the differentiator and why should I as a brand come to you,” says Livia Zufferli, a partner at Deloitte Canada.

Beyond selling advertisements on their sites, she says grocers could be packaging up reports on customer insights and analytics that brands would find very valuable. “If they are tracking their data in a way that is safe and appropriate, it’s a powerful position for retailers to be in,” she says. “But for those who aren’t there yet when it comes to collecting their data and being able to put it into usable, useful repositories ready to activate, there’s going to be an expense to getting their house in order.”

In developing a media business within a grocery business, retailers should be prepared to bring in talent from other sectors, including people with experience in ad tech, media and digital capabilities, says Alfredo Tan, senior vice-president and managing director of Advance powered by Loblaw (a retail media business unit launched by the grocer this past August). Then, collaboration is key. “It’s one thing to launch a media company on its own and another to launch one that also has to be tightly integrated and collaborative with the massive enterprise that Loblaw is,” he says.

Whereas many grocers in Europe started with the in-store experience and then drove customers progressively to digital, Tan says Loblaw’s approach has been the opposite. “The evolution of retail media for us will be from digital to omnichannel, which includes the physical space,” he says, noting the integration of in-store screens and audio to help promote national brands and private-label products. “If you do it right, all of that can be integrated … and there shouldn’t be a separate strategy for category merchandising teams that doesn’t include contemplating how to overlay retail media on top of that.” Loblaw has already started rolling out digital screens at its grocery stores nationally and at its Shoppers Drug Mart stores.

Why RMNs right now?

On top of a pandemic-inspired change in online shopping behaviours, retail media networks (RMNs) are buzzing of late due to a combination of factors aligning perfectly, says Kiessé Lamour, global head of media at marketing agency Wunderman Thompson. Here are some key reasons: Quality data: With the departure of third-party cookies due to privacy concerns, brands and agencies are looking to partner with retailers who have access to first-party 40 CANADIAN GROCER || November 2023

data that can help inform their marketing strategies and investment decisions.

Closed-loop metrics: With RMNs, there’s no need for marketers to guess which parts of their marketing dollars are being wasted.

Retailers give brands the chance to see the impact of ad spend, while gaining a better understanding of their customers’ buying habits and preferences.

Lucrative margins: Global management consulting firm McKinsey has estimated that RMN margins can reach anywhere

from 50% to 90%—far exceeding regular trade margins. “Amazon was also a great motivator by proving that you can be both a mega retailer and a mega media owner by claiming ad revenues that many retailers could only dream of,” says Lamour.

New revenue stream potential: RMNs offer grocers the opportunity to transact with brands outside of their regular suppliers. Lamour points to the example of a supermarket giving access to its data to an electric vehicle brand to understand and better reach eco-conscious shoppers.

Just be mindful that content aligns with customer interests. Seeing an ad for men’s deodorant when searching for cereal won’t necessarily drive conversion or loyalty.

While RMNs make it much easier for grocers to provide metrics to their brand partners, the expectation for immediate return on investment in this medium can be challenging, too. Walmart’s Gibson says advertisers sometimes concentrate on the metrics alone, focusing only on lower funnel marketing tactics. “We know that 87% of shoppers regularly or always start their purchase journey online. They plan their trips, compare prices and read reviews,” she says. “Advertising at the top of the marketing funnel informs shoppers and influences their purchase decisions, but does not always result in an immediate sale [yet]; each stage of the marketing funnel is important and plays a key role.”

In that same vein, retailers expecting their RMNs to be profitable right away will be disappointed. “If you think about it, the creation of inventory that you can sell and work with your vendors on takes time to build and there’s often a lag effect before people start adopting it,” says Loblaw’s Tan.

A PROMISING PATH FORWARD

As artificial intelligence and other technologies evolve, the capability of RMNs will too. Perrier points to advances in product sampling capabilities Mercātus is already working on that allow a real-time analysis of a shopper’s online cart so that appropriate, full-size samples can be suggested.

“The beauty of this is that these products are already on the shelves … and you get a nice text message before your groceries are delivered or you pick them up saying you qualify for a free one-litre bottle of Tide,” he says. “That is RMN on steroids and contributes value to the trifecta of CPG and consumer and retailer—and is easy for a regional retailer or chain to do.”

For Loblaw, Tan says the goal has never been for retail media to serve as a standalone solution.

“You need to start thinking about how you combine media with loyalty, with data insights, consulting capabilities, and collaboration with merchandising and category activities,” he explains. “We’re expanding more and more to be a solutions-oriented division that provides these services to our vendors and clients in collaboration with the broader enterprise across all of Loblaw’s capacities.”

He’s also optimistic about the future as grocers continue to make headway in this new retail space where they hold such a unique position in understanding their customers. “I love the fact that no one would have predicted that retailers that have been around for 30, 40, 50 years are now potentially playing in the same competitive landscape as traditional media companies and big tech giants,” he says. “Being able to provide relevant marketing messages throughout the customer journey in an omnichannel environment, and essentially influence the path to purchase … it’s amazing that retailers can now leverage that capability to build a new business.” CG

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SNACK TRENDS

SNACK ATTACK! The craze to graze continues, driven by international flavours, brand mash-ups, plant-based options and more GETTY IMAGES/JENIFOTO

By Matt Semansky

Evolving eating habits, ongoing demographic shifts and the wallet-squeezing effects of inflation continue to drive emerging trends in the snack category, prompting innovation from food manufacturers and grocery retailers alike. And while it might seem intuitive that snacks would be among the first options for trimming household budgets, all indications are that consumers are holding fast to their between-meal noshes.

Mondelēz International’s latest State of Snacking report, conducted in partnership with The Harris Poll, indicates that 75% of consumers “always find room in their budget for snacks.” Focusing closer to home, Innova Market Insights’ Snacking and Healthy Snacking Survey for 2023 reveals more than 70% of Canadians snack at least once a day.

The resilience of snacking is attributed, in part, to consumers today being more likely to opt for multiple, smaller calorie hits throughout the day than the traditional three large meals—and the range of products they are looking to fuel up on continues to expand.

“The lines between snacks and meals continue to blur, offering unique growth opportunities for snacks,” says Kathy Perrotta, vice-president of market strategy and understanding at Ipsos Canada.

Retailers have taken notice. Ontario grocer Farm Boy, for example, is

November 2023 || CANADIAN GROCER 43

made with real canadian maple syrup Maple Flavour Back Bacon Serving up a sizzling plate of our Maple Flavour Back Bacon is the perfect way to warm up on a cold Canadian morning; A balanced blend of lean, sweet, and salty.

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Aisles planning an extensive push into snacks over the coming year. “We’re in the process of revamping our grab-and-go snack category right now, because we’re seeing quite a bit of growth there in terms of the need for convenience,” says Alison McFarlane, private label product manager at Farm Boy, adding that customers will soon see more private-label products, such as trail mix, doughnuts and dried fruits, at the checkout.

Consumers may be snacking as much as ever, but that doesn’t mean they’re reaching for the same items they used to. Several trends are spicing up the category—in many cases, quite literally— reflecting the influence of global cuisines and the notion that two great ideas can combine to form an even better one.

GLOBAL FLAVOURS According to Perrotta, the consumption of sugary snacks is down 3.4% from 2019, while salty snacks are up 6%. Increasingly, Canadians are replacing their sweet teeth with “heat teeth,” with spicy snack eating rising by 11%.

Spicy flavours from all over the globe are driving this trend. Perrotta cites chilis, ghost peppers and Szechuan peppercorns among the tastes consumers are reaching for. Farm Boy’s McFarlane credits millennial and gen-Z shoppers for this adventurous turn.

“We’re seeing more interest, particularly among younger generations, in trying new flavours and I think that’s helped support the growth of these products,” says McFarlane. “Canada has a very diverse population, and people are also travelling more, so they’re very educated in global cuisines.”

McFarlane points to the success of Farm Boy’s private-label fatoush chips as an example of how the retailer has responded. “The flavour is very specific to Middle East cuisine, but it quickly became one of our highest-volume items and caught our eye in terms of what we can look for, globally, for inspiration.”

Food manufacturers are also ready to meet consumer needs with innovation.

Paul Hogan, vice-president and general manager of international, Conagra Brands Canada, says products such as Angie’s Boomchickapop Spicy Puffs, which launched this past summer, reflect the growing multicultural influence.

“There’s really a demand in Canada for culturally diverse ingredients, new

recipes with global inspiration and a desire for bolder flavours,” he says.

“Canadians are looking to satisfy their cravings with something spicy.”

THE MASH-UP David Grachnik, general manager of snacking at Bimbo Canada, is on a mission to take the company’s Vachon snack cake brand to the next level.

“We talk a lot about how we go from a snack cake provider that has an iconic brand in Quebec to a full-fledged snacking provider that has national presence,” he says. “To do that, we’re going to have to play in different spaces and innovate in different segments.”

Innovation doesn’t necessarily mean creating recipes from scratch. In fact, Grachnik says one of the key steps on Vachon’s path to national snacking prominence is the mash-up—discovering which of the brand’s bestsellers go best together from a flavour perspective.

“Last year, we launched a line of fusions, where we took our top-selling products and fused them together,” says Grachnik, citing combinations of Jos Louis, Passion Flakie and Ah Caramel cakes as examples.

“We just launched a strawberry shortcake version of Ah Caramel, which is doing really well, and we’re in the process of thinking through our Takis brand—why couldn’t we create a mixer of all our Takis flavours in one bag?”

PLANT POWER According to Mondelēz International’s research, 78% of global consumers believe “plant-based snacks are better for the future of our planet.” Add this to an increase in health-conscious shopping— more than half of Canadians intentionally seek out healthy snack options, per Innova Market Insights—and you have a recipe for growth in vegan and vegetarian-friendly snacking.

Dare Foods is one of many companies incorporating this trend into its offerings.

“Using real veggies in our products has played an important role in recent product development,” explains Paul Sinden, senior vice-president of sales, marketing and R&D for Dare. Sinden notes the use of real vegetables such as peas, carrots and beets in Dare’s Veggie Crisps and Bear Paws Veggies and Fruits cookies. “Our Breton crackers, Real Fruit gummies and Ultimate Crème Cookies are also all certified plant-based.”

PACKED AND PRICED TO MOVE In the shadow of inflation, customers are looking to squeeze maximum value from their snack dollars, whether that means going for volume in large formats or reaching for smaller packs.

“You’re seeing us innovate not only with flavours but ... trying to give consumers options on sizes and price points,” says Hogan. “Angie’s Boomchickapop is launching on-the-go-size bags, which is not something that previously existed in our portfolio in Canada.”

Grachnick, meanwhile, says Vachon is looking to address this issue while avoiding shrinkflation. “We’re mindful that consumers have a certain price point in mind,” he says. “So, we’re not going to downsize the Jos Louis, we’re going to look at how we can launch a two-pack, for example.”

Packaging isn’t just about price. Grant Daisley, senior local forager for Pacific Northwest and Canada, Whole Foods Market, says packaging is the clearest way for food manufacturers to address environmentally conscious consumers.

“The snack category is traditionally a huge source of packaging that often isn’t recyclable or compostable,” Daisley says, adding that Humble Potato Chips, a brand packaged in compostable bags and carried in Whole Foods’ Canadian stores, is an example of a product leading the way on this front.

WHAT’S IN STORE While approaching different snack trends in different ways, food manufacturers are united in shouting out retail partnerships as critical to their products’ success.

Sinden says Dare Foods works with grocers on displays and promotions, while Conagra’s Hogan is thrilled to see the return of shopper marketing campaigns post-pandemic.

“It gives us a great opportunity to create in-store theatre,” says Hogan.

Retailers are happy to oblige. “Once they’re on our shelves, I help equip our suppliers with all the information they need to help them be successful, including in-store demos, in-store signage, promo submissions,” says Daisley.

From research and development to sweet and savoury temptations at checkout, professionals in the snack business are optimistic about the future.

“We’re excited about snacking in general,” says Hogan. “A lot is happening in the space.”

November 2023 || CANADIAN GROCER 45

WHAT’S

NEW Pickled Quail Eggs Whether your customers are planning a delightful picnic, hosting a family gathering, or simply seeking a satisfying snack, Spring Creek Pickled Eggs are the perfect addition to any occasion. Their versatility and unique flavours are bound to impress guests and leave them asking for more!

Giuseppe Pizzeria Stuffed Crust Pizza Dr. Oetker’s Giuseppe Pizzeria is pleased to add a brand new Stuffed Crust innovation to its robust lineup. These delicious rectangle-shaped pizzas feature a light & airy stone-baked crust filled with three types of cheese: mozzarella, edam and cheddar.

Available in four varieties: Pepperoni, 3 Meat, Deluxe, and 4 Cheese.

Pizza Tradizionale Spinaci e Ricotta Dr. Oetker’s - Pizza Tradizionale maintains the traditional Italian practice of resting the dough to develop its unique texture and flavour. Italian-inspired ingredients are carefully arranged on the pizzas, which are baked directly on a hot stone to produce an incredibly crispy and airy crust. Available in four varieties: Spinaci e Ricotta, Salame Romano, Mozzarella e Pesto, and Speciale.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER || November 2023

USA Pears Bosc pears have a more firm, dense flesh than other pear varieties, so they are ideal for use in baking, broiling and poaching. They also retain their shape and texture better than other varieties, and their flavour is less likely to be overwhelmed by the use of strong spices like cinnamon, clove or nutmeg. Of course, they are also excellent for fresh eating, particularly by those who prefer a firmer texture.

Anytime, Anywhere Portable Snack Add a little heat to your meat snack assortment. Our new Cheddar Jalapeño sausage snacks provide a unique flavour your customers will crave. No refrigeration required means merchandising flexibility for you, and the perfect anytime, anywhere portable snack for your customers.

Raising The Bar Despite a busy lifestyle, Canadians want to savour every moment— even on the go. Bob’s Red Mill’s Bob’s Bars are a deliciously rich and satisfying treat made of simple and wholesome ingredients. Made with whole grain oats, creamy peanut butter and sweetened with organic honey, these gluten free, dairy free snack packs 6 to 8 grams of nourishing protein to keep Canadians fueled up, wherever their day takes them.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER || November 2023

DEFENSIVE PLAY

Supporting or boosting the immune system has gained importance with consumers since the pandemic—and grocers can help By Chris Powell IF THERE WAS one silver lining to emerge from the pandemic period, it was the decrease in colds and flus thanks to a sharp decline in in-person interactions.

And now that the world has (mostly) returned to normal, there has been a significant shift in consumer focus from reactively treating cold and flu symptoms, to proactively preventing them by building or boosting immunity.

With some health experts bracing for another so-called “tripledemic” of COVID-19, RSV and influenza this cold and flu season, grocers could find themselves on the frontlines of preventative care, as consumers look to everything from vitamins and supplements to their food choices to enhance immunity.

“Consumers are still focused on immunity post-COVID, and they’ve gotten more specific about how they are addressing immunity with specific food ingredients and vitamins, says Shelley Balanko, senior vice-president of the U.S. research firm The Hartman Group.

To be clear, the main consumer focus when it comes to boosting immunity resides primarily with vitamins and supplements. According to The Hartman Group’s research, vitamins and supplements are increasingly part of consumers’ “toolkits,” 48 CANADIAN GROCER || November 2023

with more than two-thirds of respondents (68%) saying they play an important role in their health and wellness.

But the products consumers are using to achieve their health goals are shifting, with The Hartman Group noting a 12% drop in the number of people who have used multivitamins in the past year, offset by pronounced growth in specialized vitamins and minerals such as vitamin D (+10%), vitamin C (+7%) and the vitamin B series (+8%).

Paul Galbraith, senior vice-president, managing director with Jamieson Wellness, says nearly 75% of Canadian households have purchased vitamins, minerals and supplements in the past year.

“Seasonal trends, like a focus on immunity during cold and flu season, have returned with high demand for innovative product,” says Galbraith. Jamieson is attempting to meet those consumer demands with an array of products including its Vitamin C + Immune Shield Gummies, and its high-potency D3 Softgels.

But, while immunity has emerged as a key sales driver in the category, Galbraith says other factors are playing into the category’s growth as well. “Immunity is important to consumers, but overall health and wellness, including sleep,

stress and mental well-being are also driving product popularity,” he says.

According to Statista, revenue in the Canadian vitamins and minerals market amounts to $1.52B in 2023 and is expected to grow annually by 5.54% (CAGR 20232028). And while grocery represents just one of many sales channels—along with specialty retailers and major online retailers including Amazon—experts say there’s potential for it to become a significant player in the fast-growing segment, particularly as consumers place greater emphasis on healthy eating as a way of boosting immunity.

In a recent survey of 2,000 Canadians, as part of its research into better-for-you eating trends, Mintel found health considerations ranked third behind lowest price and preferred taste—and ahead of brand preference, all-natural ingredients and ethical considerations—when it comes to what matters most when shopping for food and drinks.

Joel Gregoire, Mintel’s associate director of food and drink, says there’s an opportunity here for grocers to guide consumers to be healthier.

According to Gregoire, more than one-third of respondents cited immunity-boosting ingredients as an attribute they’d like to see in better-for-you foods.

“When people think about health, the first things they think about are energy or cardiovascular … but immunity is something that resonates with consumers,” he says.

Not surprisingly, food brands are beginning to move into the immunity space.

Nestlé’s new Life Cuisine brand of frozen power bowls, for instance, features can’tmiss messaging on its packaging that promises “immune support” through antioxidants and vitamins.

“Usually when you think about immunity you might think about tea or beverages or supplements, but this puts immunity front and centre on the package,” says Gregoire. “Why I find this product interesting is because it’s from the biggest food company in the world; it’s a very mainstream product, and it’s not [a claim] that they buried in the copy—they lead with it.”

Health positioning, says Gregoire, can be a “tiebreaker” for consumers when deciding between brands, with 80% of people indicating that when choosing between similar products, they’re more likely to purchase what they perceive as the “healthier” option.

SHUTTERSTOCK/LALLAPIE

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1 KEEP CALM AND SIP ON

Aaaaah, tea. From the brewing process to the fact tea contains L-theanine, a stressalleviating amino acid, everything about it feels like a decompress. In fact, a 2023 survey from Innova Market Insights found one in two Canadians drink tea “to relax and unwind,” followed by “taste” (43%) and “health benefits” (29%).

“The comfort tea provides, the unique flavour profiles and knowing it’s good for your body–it’s a trifecta that has made a cup an enduring daily ritual,” says Lu Ann Williams, global insights director at Innova.

Tea Four things to know

By Chris Daniels

GETTY IMAGES/ALEXEY KOZA

3 STEEPED IN SUSTAINABILITY Innova reports that 35% of tea products launched in North America in 2022 included an “organic” claim, while 28% were “GMO-free.” “Tea drinkers today are looking for brands that are grown ethically,” says Williams.

Carried in Whole Foods Market, Loblaws and Goodness Me!, Traditional Medicinals is “focused on partnering with retailers who share our efforts to execute promotions that give back to the communities we source from,” says Rod Sinclair, managing director - Canada at the California-based botanical wellness company. That includes “funding reliable water sourcing in India.”

The Sweet Potato recently listed Clef des Champs, after the Toronto grocer’s body and apothecary manager, Amanda Leblanc, visited the certified-organic farm in Quebec where the brand grows medicinal herbs. “The ethics they operate by are impressive,” says Leblanc, who loves the product names such as Goddess Tea.

4 HOT WHEN IT’S COLD

2 LOOSEN UP Globally, consumers love the convenience of tea bags. But, Market Research Future’s 2023 Tea Market Overview notes loose-leaf tea has “experienced the quickest growth,” having gained attention for being fresher, of higher quality and with less packaging.

Since launching in Canada in 2012, Dubaibased brand Alokozay has been mostly carried in ethnic grocery stores. However, it has recently been listed by mainstream chains, including Loblaws, as these grocers look to

Aisles

meet the needs of a diverse consumer base.

“Canada is a land of immigrants and different cultural practices around tea, whether it’s the British steeping it, Indians boiling it with milk or the Chinese sharing a pot of green tea, and it’s all loose-leaf,” says Jeeba Siddiqi, operations and branch director, Alokozay North and South America regional office. “We have strong sales in loose-leaf tea because it’s made for drinking on social occasions rather than while running around in the morning.”

As the mercury drops, the demand for tea heats up! The Sweet Potato sees a seasonal sales surge of 30% to 40%, as consumers crave warm beverages in the cooler months, but also because of cold and flu season.

“People look to support their nervous and immune systems with herbal tea,” says Leblanc.

Regular tea is made from leaves of the tropical plant camellia sinensis.

Herbal or tisane teas are infusions of leaves from other plants, herbs, spices, dried fruits, seeds, roots, bark and flowers.

“The Canadian tea market is growing, tracing to the herbal tea segment,” agrees Naihely Hernandez, Tetley brand manager at Tata Consumer Products. “A large portion of the growth comes from teas that have been fortified with vitamins and minerals.” In 2019, Tetley launched Super Teas: Immune combines lemon and echinacea with zinc, while Antiox blends apple, cinnamon and turmeric with vitamin C. Tetley Super Teas have grown by 75% since launch year, says Hernandez, and this winter will be displayed with Ricola cough drops at Loblaws and Walmart.

November 2023 || CANADIAN GROCER 49

AN ELEGANT & UNIQUE EVENING

In Support of Canadian Children F E AT U R I N G

Carly Rae Jepsen with a Symphony Orchestra

Saturday, January 27, 2024 • Metro Toronto Convention Centre

Get tickets at nighttonurture.ca

New on shelf!

1 MCCAFÉ FRENCH VANILLA MEDIUM ROAST COFFEE Made with 100% ethically sourced Rainforest Alliance Certified Arabica beans, McCafé French Vanilla Medium Roast Coffee delivers a rich, smooth taste and texture with a hint of vanilla sweetness and no artificial flavours. The new brew is available in 12-count K-Cup pods.

Aisles The latest products hitting shelves

1

2 SNACK TRAX EDIBLE DOUGHS Perfect for a snack or as a dessert, the No Sugar Company has launched edible cookie dough bars and edible brownie dough bars that are safe for school. Both varieties are egg-free, nut-free, dairy-free, sugar-free (of course) and contain five grams of whole grain oats and three grams of protein.

2

3 SABRA BUFFALO, BBQ AND SOUTHWEST HUMMUS Sabra Canada is expanding its line of hummus with the addition of three bold new flavours: Buffalo (made with Frank’s RedHot sauce), BBQ (inspired by Stubb’s barbecue sauce) and Southwest (inspired by the taste of tacos). All three varieties are plant-based and kosher and can be used as dips or spreads.

4 HERSHEY’S OAT MADE Hershey Canada has launched its first-ever plant-based chocolate bar. Made using oat flour in lieu of dairy, Hershey’s Oat Made chocolate bars are 100% vegan, non-GMO Project Verified and have no artificial flavours. The bars are available in two flavours—Creamy and Almond & Sea Salt— and can be found in the confectionery aisle in major grocery retailers.

5 NATURESOURCE MIXES In time for the holiday entertaining season, naturSource has launched what it’s calling “premium mixes” with Hot Maple Almonds (maple praline almonds with cayenne and habanero pepper), Smokey Praline Snack Mix (praline almonds, salted pretzels, cashews and oven-baked pumpkin seeds) and Cinnamon Crunch Gourmet Fruit & Nut Mix (cinnamon-glazed sliced almonds, pumpkin seeds, cashews with sea salt and raisins). CG

3

4 5

November 2023 || CANADIAN GROCER 51

Express Lane

STATE OF​ A NATION

What’s next for Canada’s economy?

By Kristin Laird

Some of the country’s grocers have suggested food price inflation is starting to moderate. Is this what you’re seeing?

Yeah, I think we are. It’s important to remember that inflation is a rate of growth. So, it’s not that food prices are declining, but the rate of growth in food prices has been slower. If you look at the Canadian Consumer Price Index, the price of food purchased from stores is up just under 7% year-over-year as of August and it peaked at more than 11% last winter. So still rising, but more slowly.

Will food prices return to pre-COVID levels?

In terms of the level of prices, likely not.

Prices do rise over time. It’s not usually as fast as it has been over the last couple of years, but we’re not expecting significant declines in prices. It’s the pace of price growth that can slow.

Right. And as prices increase, how do you put that toothpaste back in the tube?

Yeah, exactly. It’s easier for prices to rise than for them to fall. There’s a lot of catch up to past inflation that’s still happening in wage contracts. But, as you do catch 52 CANADIAN GROCER || November 2023

up on the wage side it makes it harder for prices to fall from that point on.

When it comes to inflation and food prices, what are some of the headwinds that grocers are still facing?

The economy is still short of labour. High immigration rates are helping right now to fill some open positions, but we also know every new arrival to Canada that fills a job also becomes a consumer and increases demand for products and downstream demand for more workers as well.

Labour shortages over the longer run are being driven by structural factors like the aging population. The share of the population that’s in retirement age is growing.

These are people that are consuming, but no longer producing in a job. Also, in Canada, supply chain disruptions lasted longer than some of the international supply chain disruptions we had earlier in the pandemic recovery, which was tied to labour shortages. And things like domestic trucking and rail transportation costs peaked later than the international supply chain challenges peaked and have declined more slowly. That’s partly why we’ve seen more persistent price growth overall, but particularly for food products.

Food prices are rising and belts are tight­ ening, but are we seeing improvements from, let’s say, a year ago?

Food prices look like they’re growing more slowly. Hopefully that gives households time to catch up. You can have a period where food prices aren’t expected to decline, but wages are still rising so household purchasing power starts to

improve. The worrying thing now is we are starting to see some softness in labour markets—the unemployment rate has increased by half a per cent since the spring—and households are vulnerable to any kind of a downturn in labour markets.

To date, we’ve seen slower hiring more than firing. We have a lot of labour force growth and it’s just been taking more time to absorb those new workers. But households are a year and a half into significantly higher prices, significantly higher interest rates and higher debt payments.

For now, broader consumer demand has held up well, but households at this point look vulnerable to any kind of a downturn in labour markets.

What challenges will grocers face in 2024?

We know some food demand is cyclical.

We know food at its core is a non-discretionary item, but spending patterns do change when the economy gets softer.

We think headwinds for higher interest rates and higher inflation over the last year are building and we’ll see a “mild” downturn in the economy over the second half of this year, which is what we’ve been assuming at a higher unemployment rate. So, households are still going to buy food, they’re still going to eat, but they might make different decisions at the store—buying cheaper options when available, potentially wasting less. But through those factors, you do historically see some softening in food sales because of an economic downturn. CG FOR MORE Q&A WITH NATHAN JANZEN VISIT CANADIANGROCER.COM

ROYAL BANK OF CANADA

GROCERS CONTINUE TO contend with a tight labour market, mounting input costs and supply chain issues, while Canadian households attempt to keep up with the rising cost of living. We recently spoke with Nathan Janzen, senior director, economic research with the Royal Bank of Canada on these topics and what challenges grocers could be faced with in the year ahead. The interview has been edited for clarity and length.

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2023

CATEGORY

CAPTAINS

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Printed in Canada

Bread Canned Tomatoes Coffee Coffee Creamers Dry Packaged Dinners Fresh and Deli Frozen Food Peanut Butter Personal Care Plant-Based Specialty Foods Yogurt

5 7 9 11 13 15 17 19 21 23 25 27

BREAD

Commercial Bread is $3.3 billion in sales1 for the latest 52 weeks (ending August 12, 2023) with sales growth of +10% and gaining over $290 million in Canada. Commercial Bread is a large grocery category and plays a significant role at retail with a high household penetration of 97.7%2. Higher Health—comprised of grains, rye, dietary needs (weight management, no fat, no sugar, gluten free) and organic breads— is the largest segment in Commercial Bread with a 19% dollar share, followed by White Bread at 18%, Buns & Rolls at 18%, and Breakfast at 15%. These four major segments account for 70% of the Commercial Bread category. Higher Health is the segment that supports consumers’ growing awareness and demand for healthy, nutritious and “better-for-you” products.

fig 1. INNOVATION KEY GROWTH DRIVERS

Established Items

New Items/Innovation

Commercial Bread

99%

1%

Higher Health

99%

1%

White Bread

99%

1%

Wheat Bread

100%

0%

Breakfast

99%

1%

Buns & Rolls

99%

1%

Flatbread

99%

1%

Specialty

100%

0%

New product innovation plays a key factor in category growth and innovation is coming mainly from the Higher Health, Buns & Rolls and Flatbread segments.

fig 2. COMMERCIAL BREAD SEGMENTATION ($ SHARE/GROWTH %) Commercial Bread = 100 (+3%)

Specialty 10.8 (+6%) Flatbread 13.1 (+3%) Breakfast 15.2 (+3%)

Higher Health 18.17 (+3%)*

Buns & Rolls 17.9 (+4%)

White Bread 17.8 (+3%) Wheat Bread 6.4 (+2%)

1 NielsenIQ MarketTrack National Incl NFLD GB+DR+MM L52W Period Ending August 12, 2023 2 NielsenIQ Paneldata National Total Outlets L52W Period Ending Jun 17, 2023 fig 1. NielsenIQ MarketTrack BRANDED ONLY L52W Period Ending August 12, 2023 fig 2. NielsenIQ MarketTrack L52W Perieod Ending August 12, 2023

CATEGORY CAPTAINS 2023

5

CANNED TOMATOES

In the L52W period ending June 2023, the Total Tomato category is valued at $289.9M dollars and experiencing growth at 14.1% (sales) with declines in tonnage at – 6.4%. The Canned Tomato category is valued at $101.6M and is also showing growth of + 11.2% (sales) with declines in tonnage (-5.9%). Diced, ground + cut continues to be the largest segment, contributing 22.1% of category sales. Private label contributes 27.4% and is growing in sales (+20,6%) and declining in tonnage (-6.1%). All remaining segments are growing in sales, (except for Stewed Tomatoes which is relatively flat), and declining in volume (except for Crushed which is growing +1.4%). Paste is the fastest growing segment at +20.1% sales and -2.1% tonnage and is followed by Crushed at +16.6% sales and +1.4% tonnage. As spending power continues to be pressured by inflation, consumers continue to show a greater interest in higher quality canned tomatoes, as we see consumers paying double the price for a premium Italian brand over a value brand. This trading up is a key driver for growth in the Tomato category.

fig 1. SEGMENT SALES

70

65.9

60

64.2 56.9

20.6%

50

12.8%

40

34.8

30 20

28.9

29.4 27.1

20.1%

8.4%

10

28.6

26.3

8.7%

20.2 19.1

16.6%

16.2 14.6

5.7% PRIVATE LABEL

DICE + CUT + GROUND TOMATOES

TOMATO PASTE

TOMATO SAUCE

PIZZA SAUCE

13.3 11.4

WHOLE PEELED TOMATOES

STRAINED TOMATOES

CRUSHED TOMATOES

fig 2. TOTAL TOMATO CATEGORY

fig 2. TOTAL CANNED TOMATO

(excluding Pizza) 83,049,768

77,516,157 -6.7%

2022

2023

35,362,715

-0.7%

3.9 3.9

11%

SALES VOLUME

0

$ SALES YA

% CHG - $ SALES

SALES VOLUME

$ SALES IN MILLIONS

SALES

79.4

80

STEWED TOMATOES

33,285,933 -5.9%

2022

2023

Source: NielsenIQ Grocery+Drug+Mass – L52W Period Ending June, 2023 – Whole, Diced+Cut, Strained, Paste, Pizza

CATEGORY CAPTAINS 2023

7

Same Bears New Grind

Everyone’s favourite Bears are taking over the coffee aisle!

4 NEW SKUs

Kraft Café Barista Medium Roast & Dark Roast Coffee

Single Serve Pods 30 pack / Ground Coffee 875 – 900g

Now made with 100% Rainforest Alliance Certified Coffee Beans that are proudly roasted and packaged in Canada.

New recyclable* canister made with paper-based materials from renewable resources. *Excludes freshness seal

Nabob Roast and Ground Coffee 340 g

COFFEE

Coffee is a $1.5B category in Canada and is found in over 80% of households, a triedand-true grocery staple. While consumers continue to reacclimate post lockdown and post pandemic this past year, in-home coffee consumption was faced with a new change in routine as businesses have reopened and begun resuming pre-lockdown operational hours. Consumers are left with more preference in choice of coffee consumption. However, the past year has resulted in a change in routine for Canadian coffee drinkers as the popularity of hybrid working models has helped maintain consumption. Coffee category household penetration reached a three-year high at the peak of the pandemic in 2020 at 80%. However, despite consumers engaging in more away-from-home channels, retail coffee has maintained its household penetration in 2023 to prior year. The past year we saw a rise in commodity prices leading to an increase in coffee prices at retail which has continued an upward trend in 2023.

Retail coffees’ price per ton is 20% over the past two years. Coffee category sales are up 2% previous year and up +5% vs 2YA, proving that Canadians are willing to pay more for their daily cup of coffee. The Coffee category remains optimistic and shows promising success with the introduction of new formats and flavour innovation hitting the shelves and will challenge the current breakfast and snack occasion.*

fig 1. TOTAL COFFEE - HOUSEHOLD PENETRATION EVOLUTION 100 80

80.30%

79.13%

80.32%

2021

2022

2023

60 40 20 0

fig 2. TOTAL COFFEE - $ PRICE/POUND

EVOLUTION

$13.01

$13.00 $11.89

$12.00 $11.50 $11.00

$10.95

$10.50 $10.00 $9.50

Avg $/LB 2YA

Avg $/LB YA

Avg $/LB

$ BILLIONS SALES

2

$13.50 $12.50

fig 3. TOTAL COFFEE - $ SALES EVOLUTION

1.5

1.448B

1.463B

L52W $2YA

L52W $YA

1.538B

1 0.5 0

L52W $

* NielsenIQ Market Track, National GR+DR+MM, Coffee, Period Ending September 23, 2023 fig 1-3. NielsenIQ Market Track, National GR+DR+MM, Coffee, L52W Period Ending September 23, 2023

CATEGORY CAPTAINS 2023

9

pour

some

flavour in your

coffee

*ACNielsen MarketTrack; National GB+DR+MM L52W ending Sep 9th 2023 Silk®/ International Delight® used under lic. © 2023 WhiteWave Services, Inc. All rights reserved.

COFFEE CREAMERS

Canadians love their coffee. As such, their consumer experiences and habits have undoubtedly been among the most heavily impacted by the unprecedented inflationary pressures and hybrid/remote work trends in recent years. Coffee consumers swiftly transitioned from buying their favourite brews outside to preparing them at home.

This shift prompted consumers to seek ways to replicate their preferred flavours, leading them to explore Coffee Creamers and Flavourings to satisfy their cravings. We can see this in the rapid growth of the Coffee Creamers category vs regular dairy-based coffee cream (+10.8% vs +2.9% in the last 3 years). Both Traditional and Plant-Based Creamers experienced nearly a 3-point growth in household penetration during the same period (2.9 and 2.4-point increases, respectively). Likewise, Refrigerated and Shelf Stable Creamers followed similar trends in household penetration, with growth rates of 3.2 and 3.4 points, respectively. Despite this momentum, the Coffee Creamers category remains at only 33% household penetration, with tons of upside for growth remaining to be unlocked through meaningful and exciting innovation.*

fig 1. HOUSEHOLD PENETRATION COFFEE CREAMERS

28.8%

32.7%

33.1%

July 2021

July 2022

July 2023

fig 2. COFFEE CREAMER SEGMENTATION AND SHIFTING Dollars

Plant-based 31% CAGR: +30.9%

Coffee Cream 51% CAGR: +4.4%

Coffee Creamers 49% CAGR:+16.7%

Traditional 69% CAGR: +11.7%

* Nielsen Homescan, 52W Period Ending July 3, 2021 to July 1, 2023. fig 1-3. Nielsen Homescan, L52W Period Ending July 1, 2023

CATEGORY CAPTAINS 2023

11

DRY PACKAGED DINNERS

Dry Packaged Dinners (DPD) is a large and mature category of $281MM ($CAD) and a 6.30% CAGR over the last two years1, that spans across several sub-segments.

Within this category, macaroni & cheese represents a whopping 69% of the DPD category sales with an average household penetration of 51.6% over the last two years2.

In the last 52 weeks, DPD delivered over $281.8MM, up +7.1% compared to the year before with macaroni & cheese driving this trend growing +4.6% YOY. Dry Packaged Dinners reach two main consumption occasions, lunch and dinner as a main or a side, with snacking occasions on the rise as new formats become available. 79% of people decide they’re going to eat macaroni & cheese within an hour before consumption3 driving high impulse purchases on the shelf and consumption at home. Macaroni and cheese also demonstrates expandable consumption, with consumers trading up to larger pack sizes and increasing consumption after it is in the pantry with households purchasing every 36 days with 2.7 units bought per trip4.

fig 1. HOUSEHOLD PENETRATION

fig 2. MACARONI & CHEESE IS GROWING IN

MACARONI & CHEESE

IMPORTANCE IN THE DPD CATEGORY

$ Share

48.7%

49.4%

52.2%

50.1%

2020

2021

2022

2023

64.5

65.3

69.6

68.8

2020

2021

2022

2023

fig 3. MACARONI & CHEESE GROWTH IN SALES BUT DECLINE IN

UNITS YOY DUE TO PRICE INFLATION

MILLIONS

300

200

249,454,698

262,305,965

281,857,364

140,524,599

132,572,973

128,319,241

L52W 2YA

L52W YA

L52W

$ Units

100

0

1. Nielsen MarketTrack Data – L52W ending August 19, 2023 2. KHC Nielsen Homescan Factbook L52W - week ending July 01, 2023 3. IPSOS Lumiere Study. NielsenIQ Market Track Nat xNfld GB+DR+MM 2018 4. Nielsen IQ, Shopper Tracking, TOTAL – BMO – Total Outlets – L52W – week ending Oct 01, 2022 Fig 1. NielsenIQ, TOTAL National - BMO-TOTAL OUTLETS – L52W - week ending Jul 01, 2023 Fig 2. Nat xNfld GB +DR +MM - L52W > week ending Jun 17, 2023 vs year ago Fig 3. NielsenIQ, TOTAL National - L52W period ending August 19, 2023

CATEGORY CAPTAINS 2023

13

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A

FRESH AND DELI

Rising food prices and buying less food to stay on budget continues to be the mindset for many Canadian consumers. According to Statistics Canada, the leading culprits driving food inflation are meat (up 6.9%), bakery items (up 12.9%), and dairy products (up 7.4%)1. Adapting to these cost pressures, consumers are shifting preferences toward the centre store (+0.4%) while avoiding the store perimeter (-0.3%)2 to save money.

Deli cheese prices in Canada have surged by 10% in the past two years3. While these increases have pushed the category to be worth more than $850M in sales4, it has negatively impacted deli cheese consumption5. In response, many consumers are opting for pre-packaged cheeses in the dairy aisle. While Canadians will not stop eating cheese, half are willing to forego their deli staple to save a buck or two6.

Offering tiered cheese assortments and weekly deals can be effective to drive sales and encourage trial for new consumers. Additionally, cross-category promotions with segments like crackers, wine or cured meat ensures that the cheese will not stand alone.

fig 1. PERFORMANCE BY STORE SECTIONS Centre of Store Food

Centre of Store Non Food

Perimeter

$ Shr

45

19.7

30.1

$ Shr Chg YA

+0.4

+0.3

-0.3

Confectionery 0.8 Cold Beverages Prepared Foods Snack Hot Beverages Condiments & Sauces Refrig/Dairy Dessert Frozen Foods Baking Needs Alcoholic Beverages

Cosmetics OTC 12.2 Pet Needs 8.1 Body Care 9.1 Hair Care 8.4 Shaving 6.7 Baby Care 7.2 Oral Hygiene -2 9.4 Paper Products 7.5 Household Products 11 General Merch

fig 2. IMPORTANT FACTORS WHEN CHOOSING

WHAT CHEESE TO PURCHASE, 2022

Price Flavour Format Made-in-Canada All-natural Added Benefits Artisan Organic Lactose-free Vegan

5.6 10.4

6.7

13.7 9.2 6.4

Bakery Deli Produce Meat & Seafood

12.1 8 2.7 6.2

10.8 6.8 4.6 6.7 12.6

fig 3. CHEESE INFLATION TRACKER

CANADA, AUGUST 2023

66% 64% 45% 39% 28% 16% 13% 13% 11% 4%

Which of the following factors do you consider when choosing what cheeses to purchase?

Base: 1,901 internet users aged 18+ who eat cheese

1. Statistics Canada. Consumer Price Index, monthly 2. Nielsen IQ MarketTrack, National All Channels, Total FMCG, WE July 01 2023 3 and 5. Ibid 4. AC Neilsen, National All Channels, 52W Period Ending December 31, 2022 6. Mintel Cheese Canada 2022 fig 1. NielsenIQ Market Track, National All Channel, Total FMCG, L52W, Period Ending July 1, 2023 fig 2. Kantar Profiles/Mintel, April 2022 fig 3. Statistics Canada’s Consumer Price Index Tracker

+3.5%

+10%

1—Year Change

2—Year Change

CATEGORY CAPTAINS 2023

15

FROZEN FOOD

Since the start of the pandemic, food shopping and consumption habits have shifted regularly. But a few key habits appear to be here to stay, including shoppers’ purchasing and leveraging of Frozen Food. Canadians are still preparing more meals at home, but life has come back to busy schedules and more time away from home, as well as the added layer of a 40-year high inflation. As a result, consumers are increasingly relying on Frozen Food to help, evident in Frozen Foods unit sales growth vs pre-pandemic (+2.8%4-YR CAGR)1. The category is driven by multiple factors including: Ethnic: In 2022, a record 400,000+ immigrants came to Canada, making the new total share of immigrants/permanent residents hitting 23% of the total Canadian population2. As the influence of global flavours continues to grow, retailers will evolve their current assortments to cater to new immigrants as well as Canadians who choose to try new flavours. Asians, particularly Chinese and Southeast Asian individuals, while making up just under 22% of total Frozen Food occurrences3, over-index compared to other food departments. Particularly, Asian backgrounds over-index compared to Frozen Meals and Frozen Appetizers making these categories a gateway into Frozen Foods. Restaurant-inspired foods, particularly multicultural, are also appearing in the Frozen aisles as consumers seek restaurant-inspired cuisines.

Convenience and Home Cooking: Partially homemade options remain strong and amongst the largest growing preparation method as Canadians seek convenience (chart 2)4. Not surprisingly the #1 motivator when purchasing Frozen Food was the “easiness to prepare” and “required little to no planning” according to 31% of Canadians, particularly amongst Frozen Meals over-indexing in importance to the total department3. As a result, Frozen manufacturers are providing more convenience options – whether a steamer pack without the removal of the bag to cook, or an all in one, one-pan meal for the family - to accommodate the busier lifestyles of Canadians.

fig 1. FROZEN FOOD DEPARTMENT PERFORMANCE CANADA1 $5.2B +23.7%

Dollars Units

$4.2B +5.1%

867.8M

886.9M, +2.2%

1.0B, +153.6%

1.0B, -1.3%

970.8M, -4.1%

Jan 2019

Jan 2020

Jan 2021

Jan 2022

Jan 2023

+2.8% 4-YR CAGR

PT ∆ VS. PT ∆ VS. 2021 2019

Home prepared

72%

Completely homemade/ scratch

Meal Kit

$5.6B +6.1%

$4.0B

fig 2. CANADIAN PREPARATION HABITS4

Partially homemade

$5.3B +2.3%

49% 17% 7%

1 NIQ Market Track Canada L52W Jan 2023-Jan 2019 2 IPSOS Canada Chats (IPSOS), September 2022 3 IPSOS FIVE Frozen Food, April 2023 4 Immigration Refugees and Citizenship Canada (CanadaVisa), Feb 2022 fig 1. NIQ Market Track Canada L52W Jan 2023-Jan 2019 fig 2. IPSOS Canada Chats (IPSOS), September 2022 fig 3. IPSOS FIVE Frozen Food, April 2023

0.2

0.7

-0.1

0.5

1.2

1.3

-0.9

-1.0

fig 3. CANADIAN MOTIVATIONS TO

EATING FROZEN FOODS3

31.1% 45.9%

Easy to prepare

30.5% 27.3% 30.2% 33.4% 29.8% 42.2% 25.3% 29.3%

Satisfies a craving Wanted something tasty Satisfies my hunger Could be eaten quickly Total Frozen Foods

Frozen Meals & Entrees Index 148 90 111 142 116

Frozen Meals & Entrees

CATEGORY CAPTAINS 2023

17

Over

0 0 1,3 nuts Peinaevery jar

*

*1 kg Jif® Creamy Peanut Butter based on average production (excluding Light).

TM/©/® Smucker Foods of Canada Corp. or its affiliates.

PEANUT BUTTER

The Peanut Butter category has seen consistent consumption year over year, reaching $330 million in annual sales1 and a 76% household penetration.2 The category experienced inflationary growth in dollar sales +8%, while tonnage volume slightly declined -2%.1 The Regular (Stabilized) Peanut Butter segment leads the category, representing 80% of sales, with +9% dollar growth vs. year ago.1 While the Natural Peanut Butter segment appeals to health-conscious consumers, Regular Peanut Butter continues to be a pantry staple for Canadians.

As inflationary pressures persist and Canadians prioritize their physical and mental well-being, consumers are seeking accessible food alternatives to balance healthy lifestyles and economic stressors.3 Peanut Butter offers a quick and affordable protein solution with 72% of Peanut Butter users agreeing that it is a good source of plant-based protein.4 PB&J sandwiches are a classic comfort meal that appeals to consumer’s connection with food and value for convenience. Nostalgic foods will grow in popularity as consumers focus on emotional well-being as part of an integrated approach to a healthy mindset.3 Peanut Butter acts as a healthy, comforting, and convenient meal that is suitable for all occasions.

Despite inflation being top of mind, brand name is still a significant factor for Canadian shoppers and remains a top two purchase driver.5 Retailers should ensure shelves are stocked with Peanut Butter brands and varieties to meet evolving consumer tastes and needs.

300

304

330

305

200 100 0

59,742,885

56,843,410

55,839,657

L52W 2YA

L52W YA

L52W

fig 2. PEANUT BUTTER SEGMENTS

20% 80%

Tonn Vol (KG)

Natural PB $66,265,412 Regular PB $263,908,894 Total PB $330,174,306

fig 3. PEANUT BUTTER SUB-SEGMENTS 250 $ VOL IN MILLIONS

$ SALES IN MILLIONS

fig 1. PEANUT BUTTER 3-YEAR TREND

200 150 100

63

50 0

1. NielsenIQ, National All Channels, L52W Period Ending July 15, 2023 2. Numerator Panel, L52W Period Ending July 15, 2023 3. Ipsos, A New World Disorder? Navigating a Polycrisis and Global Trends (2023) 4. Erikson Research, American Peanut Council Evaluation – Canada (2021) 5. Nielsen Inflation Report (2022) fig 1—3. NielsenIQ, National All Channels, L52W Period Ending July 15, 2023 Note for fig 3. : Creamy and Crunchy calculations exclude overlap of Light and Dark Roast Sub-Segments

223

Creamy

Crunchy

40 Light

4 Dark

CATEGORY CAPTAINS 2023

19

Discover Dove’s Moisturizing Care

CARE MAKES A MAN STRONGER

PERSONAL CARE

(Personal Wash & Deodorants) Personal care is a massive $1.1Bn category that has grown 10.3%^ $ share and declined by -3.6% in tonnage (vol) share^. The category comprises items consumed daily to maintain personal health and hygiene which reflects in the high penetration numbers within Canadian households~ (77.8% for Personal Wash and 67% for deodorants). Personal wash encompasses bars, body washes and hand washes to make up 61% of the category while deodorants make up the remaining 39% of the category. Barring hand washes which saw a surge in demand in 2020 due to Canadians seeking anti bacterial formulas during Covid -19, all other formats saw a massive decline in demand with people staying at home due to the lockdown. However, with the exception of deodorants, absolute tonnage sold has bounced back on all these formats in 2023 to levels comparable to pre-COVID times (2019).

With consumer preferences evolving, naturals as a trend continues to grow as more consumers are conscious of what they choose to use for their bodies. One of the key purchase drivers for natural buyers within cleansing is mild/gentle formulations for sensitive skin and within deodorants is aluminum free formulations. When it comes to sweat and odour protection, consumers are increasingly gravitating towards dry sprays versus antiperspirant sticks because of ease of use and the non-sticky sensorial that a stick doesn’t necessarily provide. In deodorants, efficacy of product and trust are the biggest drivers of brand strength while in body washes (biggest segment within personal wash), it is a product that delivers on meeting the needs of the whole family and helps attain glowing and pampered skin*. Despite current inflationary pressures, the category will continue to see innovations leveraging macro trends of enhanced performance, naturals, value added benefits (premium ingredients, derm focused offerings, health and wellbeing) and self care.

fig 1. ANTIPERSPIRANT & DEODORANT (APDEO)

$ AND TONNAGE (EQ) BY FORMAT

(growth)

$

$

+7%

600 500 +11%

200

0

EQ

700

+17%

300

100

(growth)

MILLIONS

MILLIONS

400

EQ

fig 2. PERSONAL WASH $ AND (EQ) BY FORMAT

+23% +25%

+2%

-3%

+6%

+5%

TL APDEO

Sticks AP

Sticks DEO

Dry Sprays

+10%

400 300 200 100 0

-5% Hand Wash

10.4%

4.9%

61.9%

39.8%

Dry Spray

Roll On

Sticks/Solids

Bars

L52W Penetration % June 2023

+6%

-2%

-4%

-2%

-8% Bars

Bodywash

Personal Wash

53.1%

40.9%

Bodywash

Hand Wash

L52W Penetration % June 2023 All formats exclude baby

^ Nielsen IQ Market Track August12th, 2023 L52W ˜ Nielsen IQ Shopper Track June 17th, 2023 * KANTAR Brand Audit. Female Bodywash 2022, Female Deodorants 2023 and Kantar Brand Power Deep dive for APDEO and Bodywash fig 1-2. Nielsen IQ Track August12th, 2023 L52W and Nielsen IQ Shopper Track June 17th, 2023

CATEGORY CAPTAINS 2023

21

Plant-based has never tasted so good.

Lactose-free

High in Calcium

Blend of oat, soy & coconut

Silk® used under lic. © 2023 WhiteWave Services, Inc. All rights reserved.

PLANT-BASED

In Canada, the plant-based category has experienced successful growth with consumers over the past decade. Nearly 50% of global consumers have made changes to their diet in the last 2 years to lead a more sustainable lifestyle1, and with 15% of individuals trying to cut back on weekly dairy intake2, the runway for plant-based beverage remains strong. Most consumers shift to plant-based in pursuit of taste, health, and variety in diet, reflecting a flexitarian diet that complements animal-protein intake3. This has propelled growth in a variety of plant-based bases, with almond maintaining its leadership in beverages, and incremental gains observed in oat, soy, coconut, and cashew for various uses in cooking, breakfast, snacking, and coffee4.

As plant-based beverages grow in popularity, expanding beyond the most common occasions presents a big opportunity for the category. Today 2/3 of occurrences are additives/ingredients (such as in smoothies or cereal). This means that only 34% of plant-based beverage occurrences are consumed by the glass with drinking rates vs 51% of Dairy Milk glass occasions.5 As such, the Dairy-like segment is making a strong case for the by-the-glass occasion as the #2 base $ contributor to category growth (after oat)4.

fig 1. $ SHARE OF SEGMENT — PLANT-BASED

BEVERAGE 2023 YTD

fig 1. PURCHASED DAIRY AND/OR NON-

DAIRY MILK, BY AGE, 2023

Dairy and non-dairy milk purchased 73%

Dairy-like 2% Oat 27%

68%

57%

Cashew 3%

34%

Coconut/Almond 1%

67%

55%

43% 30%

27%

Coconut 4% Soya 15% Almond 48 %

Any non-dairy milk

Dairy milk and non-dairy milk 18–34

35–54

Dairy milk only

55+

fig 3. REASONS FOR CONSUMING NON-DAIRY MILK, 2023 Reasons for consuming non-dairy milk

31%

Healthier than dairy milk

31%

Prefer the taste

29%

For variety in diet 25%

Trying to consume more plant-based foods/drinks

24%

Dairy/lactose intolerance 18%

Better for the environment than dairy milk For animal welfare Prefer the texture

15% 14%

1. FMCG Gurus 2022 2. Ipsos FIVE R12ME September 2022 – % Individuals; CHATS Custom Study October 2022 3. Mintel Report–Dairy & Non Dairy Milk 2023 4. The Nielsen Company, Marketrack, National incl NFLD GDM, L52W Period Eending September 9, 2023 5. Ipsos FIVE R12ME November 2022; % Occurrences with change vs. Pre-Pandemic Period R12ME November 2019 fig 1. The Nielsen Company, Marketrack, National incl NFLD GDM, YTD Period Eending September 9, 2023 fig 2. Mintel Report– Dairy & Non Dairy Milk 2023. Base: 1,952 internet users aged 18+ who have purchased dairy or non-dairy milk in the past three months. fig 3. Mintel Report– Dairy & Non Dairy Milk 2023. Base: 1,011 internet users aged 18+ who have purchased non-dairy milk in the past three months.

CATEGORY CAPTAINS 2023

23

Importing Brand Management Tri-Temperature Warehousing Market Insights National Distribution Advanced Data Reporting

National Retail Coverage National Food Service Coverage

@treeoflifecan Tree of Life Canada

www.treeoflife.ca

SPECIALTY FOODS

The correlation between international cuisine and immigration continues to heavily influence our grocery landscape and instore experiences. Canada’s population has now reached 40 million people, many with diverse and vibrant backgrounds.1 Currently, 80% of ethnic consumers feel that their ethnic food and ingredient needs are satisfied in their local communities, but recent newcomers (those who immigrated between one and four years ago) continue to look outside of their communities to find familiar foods.2 This indicates an opportunity for retailers to identify their regional consumer base and adjust item assortments accordingly.

Another indicator of international influence is the proliferation of Asian and Indian cooking sauces on shelf. Not immune to inflationary pressures, consumption of Asian and Indian Cooking Sauces are flat, but the category represents a sizable $195M.3 Global cultures continue to be well represented on a multitude of food trend lists.

Ingredients such as ube (a purple yam used frequently in Filipino desserts), crispy chili oil and pandan (a fragrant green leaf used in Southeast Asian cuisine) are frequently mentioned. Meanwhile aromatic and versatile curries have found a permanent place in Canadian households, with several cultural variations widely explored.

fig 1. TOP 3 COUNTRIES OF ORIGIN BY RECENT

IMMIGRANTS, 2016 AND 2021 2021

2016

1

India

18.6%

12.1%

2

Philippines

18.6%

12.1%

3

fig 2. SELECTING A STORE

26.1%

Purchase all from mainstream grocery stores

36.5%

vs.

vs.

Purchase most from mainstream grocery stores 18.6%

China

4.1%

Purchase all from ethnic grocery stores

33.3%

Purchase most from ethnic grocery stores

12.1%

$ SALES IN MILLIONS

fig 3. SAUCES AND PASTES 160 140

159,642,526

% Change

10.1%

120 110 100 80 60 40

30,240,721

20 0

Asian Sauces

18.7%

2,787,514 2.6%

2,379,163 -6.4%

Indian Sauces

Indian Pastes

Asian Pastes

1. Statistics Canada, June 2023 2. Caddle Survey, July 2022 3. Nielsen Canada, National, GR+DR+MM, L52W Period Ending, Sept 2 2023 fig 1. Census of Population, 2016 and 2021 (3901). “Recent immigrant” refers to a person who obtained landed immigrant or permanent resident status in the five years preceding a given census. For the 2021 Census of Population, this refers to the period from January 1, 2016 to May 11, 2021. fig 2. Caddle Survey, July 2022 fig 3. Nielsen Canada, National, GR+DR+MM, L52W Period Ending, Sept 2 2023

CATEGORY CAPTAINS 2023

25

BRINGING HEALTH THROUGH FOOD TO CANADIANS

* 2g of sugar and 8g of protein per 95g serving. **With more than 109 CFU Bifidobacterium lactis per serving, a probiotic that contributes to healthy gut flora. ***per portion than the leading 200ml drinkable yogurt.

Activia® / Danone® / Two GoodTM used under lic., © 2023 Cie Gervais Danone.

Oikos® used under lic., © 2023 Danone US, LLC. All rights reserved.

DANONE CANADA IS A CERTIFIED B CORPTM

YOGURT

Yogurt remains a highly relevant category, answering Canadian consumers’ everchanging health needs, which is reflected in its YTD growth (11.5%)1. In fact, consumers are increasingly selecting food for health reasons and favoring benefit-led options: Protein is the third most important dietary need for Canadians, with 4 in 10 looking for foods that are a good source of protein and yogurt is one of the top foods those “increaser” households have turned to for protein, contributing to +$60M growth in the category. As interest in probiotics and gut health continues to grow year over year, Active Health follows in segment growth (+$19.6M YTD) followed by Plain (+$15.5M) as consumers increasingly leverage yogurt in cooking and baking occasions. Not to be ignored is the fastest growing segment in the yogurt category: Indulgence, growing at +19.5% YTD pushing the boundaries of the yogurt occasion beyond breakfast into snacking and late night treats. Non-dairy yogurt remains an opportunity to stimulate category penetration amidst continued plant-based trends, as well as customer interest around adopting a flexitarian diet, sustainability and animal welfare. Moreover, the potential of this segment is palpable with 97% of its growth coming from market expansion2.

fig 1. ABSOLUTE $ GROWTH OF THE YOGURT SEGMENT (‘000) Greek

+60310$

Active Health

+19613$

Kids Regular

+13243$ +7314$

Plain Light

+15511$ +1692$

Indulgent

+12896$

Plant Based and Organic -273$

fig 2. $ SHARE OF SEGMENT — YOGURT Indulgent 6% Light 5% Plain 8% Regular 9% Kids 15%

Plant-based and Organic 5% Greek 32% Active Health 21%

1. The Nielsen Company, Marketrack, National incl NFLD GDM, YTD Period Ending September 9, 2023).

2. NielsenIQ, Homescan, TOTAL CANADA, 52W Period Ending, 25th Feb 2023 vs YA

CATEGORY CAPTAINS 2023

27