September / October 2016 Vol 6 | No 5 $9.95
CORI & CARSON BONINA
the renaissance of
PM # 42211029
Stong’s market +produce MANAGER
Grocery Business September | October, 2016 Volume 6, Number 5
contents DEPARTMENTS
PHOTO GALLERIES
7
Golden Pencil Award Honourees
42
8
Front End
82 United Fresh | FMI
People & News
13
Open Mike The power of produce!
15
Perspective Consumers have a “friend” in Loblaw
88
83
Launch It, List It
86
It Figures
New & now discoveries
The cost-conscious consumer
88
In Other Words Doug McMillon, Wal-Mart Stores, Inc. 4
September | October 2016
Strong’s Market, NorthWoods store, Vancouver
Summer Fancy Food Show 2016 Connect
36
September / October 2016 Vol 6 | No 5 $9.95
ON THE COVER CORI & CARSON BONINA
the renaissance of
Stong’s market
Market 27 Stong’s A Retailing Renaissance
PM # 42211029
+produce MANAGER
54 82
57
FEATURES 17
Card Sharps
32
illennial Moms: The M Personas
The problem with interchange fees
49
Time’s Up for Joint Business Planning
50
A Potent Brew
53
he Case for T Collaboration in CPG
Strategies for beer and wine sales
54 Festive: ’Tis the Season for Indulgence
80 Exit Interview
Lesley McKeever
INDEPENDENTS’ DAY 35
59 Standing Ovation 65 Meal Solutions for Millennials
69 PMA Fresh
Summit: Schedule at-a-Glance
reat Things Come in G Small Packages
36 Drayton Market: Doing the “Local” Motion
40 2015 Financial Survey
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COVER PHOTO: VINCENT L. CHAN
September | October 2016
5
Golden Pencil Award
GOLDEN PENCIL AWARD HONOUREES 2016 Vince Scorniaenchi, Fortinos Michael McCain, Maple Leaf Foods The Food Industry Association of Canada recently announced that Vince Scorniaenchi, executive vice-president, Fortinos, and Michael McCain, president and CEO, Maple Leaf Foods, are the recipients of the 2016 Golden Pencil Award. Vince Scorniaenchi is a 42-year veteran of the grocery retail business, having held a number of executive positions within the 55-year-old Fortinos chain, which is now a self-managed banner within the Loblaw family. A native of Hamilton, Ont., and nephew of Fortinos co-founder John Fortino, Scorniaenchi started working in the stores when he was 12 years old. “I’ve worked all the fresh departments and most aspects of the store,” Scorniaenchi told Grocery Business in a 2014 profile article. Scorniaechi has led the retailer’s growth to more than 20 stores, its expansion into the Greater Toronto Area, and the rollout of the franchise stores. Scorniaenchi made his mark realizing his vision for Adventure Stores, which, among other innovations, brought a focus on the fresh department, natural foods, and home-meal replacement that was far ahead of the industry when the prototype debuted in 1996.
Michael McCain is president and CEO of Maple Leaf Foods, one of Canada’s flagship food companies. Born in Florenceville, N.B., McCain has devoted his career to the food industry. He started at McCain Foods Limited in the late 1970s, holding a variety of roles that culminated in his appointment as president and CEO of McCain Foods USA Inc. He joined Maple Leaf Foods in 1995, and was named president and CEO in 1999. McCain, who received his Honours Business Administration (H.B.A.) from the University of Western Ontario in 1979, counts among his career highlights the implementation of a bold transformation strategy to shed costs, reduce currency exposure and establish Maple Leaf Foods as a world-class food processor. McCain is a director of McCain Capital Inc., Maple Leaf Foods, and the Royal Bank of Canada. He is a member of the Richard Ivey School of Business Advisory Board and the Centre for Addiction and Mental Health Foundation.
The Golden Pencil Award Gala takes place November 14, 5:00 – 7:00 p.m., at the Fairmont Royal York Hotel, Toronto. Purchase tickets: goldenpencilaward.com
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September | October 2016
7
Front End
Transitions Alain Tadros has joined Metro Inc. as vice-president of marketing, Quebec. He previously was president of Publicis Montreal. Nielsen Canada has made a number of appointments: Mike Ljubicic (left) takes on a new role as managing director, Nielsen Canada; Krista Thompson assumes responsibility for client services; Rick Winslow (right) adds the marketing effectiveness practice to his portfolio of Nielsen value-add solutions; and Hanif Mohamed (left) will continue to lead Nielsen’s retail services team in Canada.
Food & Consumer Products of Canada has appointed Michael Graydon as CEO, replacing Nancy Croitoru, who announced her retirement as president and CEO in early July. Graydon most recently was president and CEO of the British Columbia Lottery Corporation. Mann Packing has named Greg Komar director of food safety and product quality. Komar joins Mann’s from SCS Global Services, where he was the director of food safety. Suzanna Dalrymple has joined Mars Canada as vice-president of sales. Previously, she held a variety of sales and marketing leadership roles at Procter & Gamble.
September | October 2016 Volume 6, Number 5
Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca
Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey Contributors Thomas A. Barlow, Andrew Bond, Joanna Castellano, Tom Henken, Karl Littler, Christopher Marinangeli, Michael Marinangeli, Maria Proulx, John F.T. Scott
Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca
8
Creative Agency Boomerang Art & Design Inc. boomart.net
September | October 2016
Philippe Gaudet has joined La Rocca Creative Cakes as vice-president, sales, marketing and innovation. Gaudet previously was director, marketing and communications, at Ace Bakery. Nancy Carroll and Peter Wright have joined the sales team at Clorox Canada. Carroll has held senior management roles at companies such as Coty Canada and Revlon Canada. Wright’s career encompasses senior roles, including senior category director at Loblaw Cos. Ltd. Del Rollo has been elected chair of the Winery & Grower Alliance of Ontario. Rollo is senior director, government relations and estates, for Constellation Brands Canada.
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Subscription changes & updates or general inquiries: info@grocerybusiness.ca
Mike Longo, Longo Brothers Fruit Markets
Grocery Business Advisory Council 2016
Cheryl Smith, Parmalat Canada
Shaun McKenna, Acosta Sales & Marketing Thomas A. Barlow, Canadian Federation of Independent Grocers Perry Caicco (retired, CIBC) Jim Slomka, Clorox Canada Tim Berman (retired, Kraft Heinz Co.)
Michael Marinangeli, MIDEB Consulting Inc. Darrell Jones, Overwaitea Food Group
David Wilkes, Retail Council of Canada Cori Bonina, Stong’s Market Bill Ivany, Tree of Life Canada Denis Gendron, United Grocers Inc.
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© Copyright 2016. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6
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Front End ON LOCATION
Bizerba celebrates 150 years Bizerba Canada celebrated the company’s 150th anniversary with the opening of a new office in Mississauga, Ont., that increases the company’s capacities for customer service and support, as well as brings about unique opportunities to expand its sales and leadership in the region. Andreas Kraut, managing partner and CEO, Bizerba GmbH, attended the ribbon-cutting ceremony.
On a recent trip to South Korea, Michael Marinangeli, of Mideb Consulting, took a break from sightseeing to catch up on reading the latest issue of Grocery Business.
“ FCC is key to our company
growing
” .
Meb Gilani, President, Gilani Group Food Processing and Distribution
Let’s talk business Work with the leading lender to agriculture, agribusiness and agri-food in Canada. fccfinancing.ca
1-855-230-6821
Pictured (l-r): Susan Amring, Director, Economic Development, City of Mississauga; Robert Slykhuis, CEO North America; Andreas Kraut; Ian Longley, vice-president, Bizerba Canada; Ron Starr, City of Mississauga Councillor for Ward 6; Michael Lauber, Deputy Consul General of the German Consulate.
Front End
United Fresh honours Sobeys’ Denise Kelly with 2016 Produce Manager Award The United Fresh Retail Produce Manager Awards Program pays special recognition to produce managers in Canada and the U.S. who are on the front lines, working every day to increase the consumption of fresh fruits and vegetables. This year, two Canadians were honoured for their contributions: Denise Kelly of Sobeys, Charlottetown, P.E.I., and Gary Standing of Loblaw Supermarkets, Sydney River, N.S. (see “Standing Ovation,” page 59). Kelly was chosen for her innovation and leadership around unique events such as The Better Food Rally and the Fall Harvest event where local farmers showcase their bounty, and the store chef creates meal ideas around the fresh products. Kelly also supports other Sobeys stores in the area with training, education and category expertise, with a view to helping elevate the customer produce experience.
LocOaWlNl y GR
Front End
YEAR OF THE PULSE The Global Pulse Confederation has introduced the Pulse Brand and the Made with Pulses seal to help consumers easily identify food products that contain pulse ingredients, such as dry peas, beans, lentils and chickpeas. The distinctive green and gold imagery is available to food manufacturers, consumer packaged goods companies and the foodservice industry to use on packages and in promotions. The first packages featuring the new Made with Pulses seal are expected to begin appearing on store shelves before the end of the year.
®
Toonies for Tummies heads west The Grocery Foundation’s Toonies for Tummies program is heading into Western Canada via a partnership with Save-On-Foods. The pilot will take place during the 2017 campaign at more than 150 Save-On-Foods stores in British Columbia, Alberta, Saskatchewan and Manitoba. It will mark the first time Toonies for Tummies, which benefits student nutrition, is branching into Western Canada. Next year, the Toonies for Tummies program, running February 9-23, returns to Metro, Food Basics, Longo’s and 60 independents, all of which have actively supported the campaign for many years. The addition of Save-On-Foods means the number of participating stores has climbed to more than 500.
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Open Mike
The power
of produce! By Michael Marinangeli
Ethnic stores have made produce their calling card. We are in a low-growth market. Growth comes primarily from about 250,000 immigrants to Canada each year, with the majority coming from Asian and Southeast Asian countries. Unfortunately, traditional grocers are not sufficiently capturing this segment of the market, which puts added pressure on their sales and tonnage growth. The challenge becomes even greater when you factor in square-footage growth amongst competitors. Some retailers, like Loblaw, Metro and Walmart, have strategies in place to tap into this opportunity. A few years ago, Loblaw bought T&T Supermarkets and Arz. Metro bought Adonis, which caters primarily to Middle Eastern clientele. Walmart has partnered with a store called Al Premium. In its Supercentre in Markham, Ont., Walmart merchandises Al Premium multicultural products alongside its typical assortments throughout many food departments. From my perspective, one of the biggest competitive advantages that ethnic stores have over traditional grocers is their produce departments. Recently, I did checks in 11 locations – four conventional, four discount and three ethnic stores – in one day. I created a basket of 15 key produce items to price-check in each store that I visited. Key takeaways from my store checks: 1. The ethnic and discount stores were all busier than any of the conventional stores. 2. The produce quality in ethnic stores was outstanding – better than most of the conventional and discount stores that I visited. 3. Of the basket of 15 produce items selected, ethnic store pricing was comparable to or better than that of discount stores on most of the items, and about 40 per cent cheaper than conventional stores on the total basket. I found this alarming.
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4. E thnic stores seemed to carry a broader assortment of produce items (especially ethnic), and did a better job of catering to the community that they serve. Retail consolidation has certainly given the larger retailers the buying clout, in most departments and categories, to effectively compete in this retail environment. However, size doesn’t seem to matter when it comes to produce. Ethnic stores effectively sell quality produce at lower prices than conventional stores. Their quality is top-notch and their freshness is second to none. Higher customer traffic generates better inventory turns, resulting in fresher product and lower shrink, which partially explains their better pricing. Ethnic stores demonstrate that, sometimes, being smaller has its advantages: they can more readily take advantage of spot buys and market surpluses to generate compelling price points versus the competition. All food retailers today understand the important role that produce plays in establishing and embellishing their “Fresh” image. A great produce department – with a broad assortment and high quality at competitive prices – goes a long way in giving you a leg up on your competition. You can grow your business in a low-growth market if you perform better than your competitors on key attributes. Ethnic stores have it right. Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. Contact: mjmarinangeli@gmail.com Michael is a founding member of the Grocery Business Advisory Board. September | October 2016
13
Perspective
Consumers have a “friend” in Loblaw By John F.T. Scott
The first question people asked me after Loblaw Companies Limited released its summer “gift” to the supplier community of a 1.45-per-cent price rollback was, “is it even legal?” Based on the intense scrutiny to which Loblaw is subjected by the Competition Bureau, I answered that it probably was. The second question was, “but is it fair?” Well, the probable disproportionate response would be that it’s not, as major suppliers will use power to negotiate; smaller vendors, with minimal leverage, will no doubt succumb to the request, regardless of the implications for their business. The third question: “was it a smart move?” That’s an entirely different issue. Those who read my itinerant publication, Perspectives, know that I have assessed Loblaw’s strategies of the past three years as well founded. Sure, the company has been aggressive, and has certainly used its newfound Shoppers Drug Mart locations to significant advantage. It has done the entire industry a great favour through strategic investments in research and retail education at the University of Guelph. It has been a resolute leader in sustainability and, more recently, in most categories of social licence and other societal issues. Its investments in new stores and technology have induced competitors to raise the already high bar of an exceptional grocery retail offering in this country. And its quarterly results have been good, so shareholders are, by and large, a contented lot. So why poke the bear now? Surely in doing so, Loblaw was aware of three realities. • First: it would merely lead the pack, with all others with power taking the same adversarial path.
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• Second: skillful trade spend professionals in each large supplier company will negotiate a compromise and then move funds around, with the net resembling the original spending envelope. • Third: some small vendors will be placed under severe pressure to remain in business, for many have never been able to pass on the original cost increases incurred by currency fluctuations and commodity price increases. Since the purge of the Allan Leighton regime in 2011, the leadership at Loblaw has cleverly positioned the company to be visibly on the side of the consumer. The excellent campaigns led by the commercials featuring executive chairman and president Galen G. Weston suggest that Loblaw is your friend – at your side, step by step. While Walmart and Sobeys have been rattling their sabres on price reductions, lost in the rhetoric of price rollbacks (Sobeys) and new fresh strategies (Walmart) has been the positioning as the consumer’s best friend. A statement of commitment to low pricing would have been insufficient to garner the interest of the media. No, something much more daring and emphatic was required; the 1.45-per-cent rollback did the trick, eliciting a huge coast-to-coast media response! This tactic caused great angst in the vendor community, but reached the consumer with a strong message that, on cost and price, you have no better friend. There is no doubt that it achieved the desired strategic effect. Clever indeed!
John F.T. Scott speaks, writes and consults on the food distribution sector. He is the author of “Perspectives on the Retail Food Industry,” an itinerant publication that explores various aspects of the industry.
September | October 2016
15
Card Sharps: The Problem with Credit-Card Interchange Fees By Karl Littler
The Walmart vs. Visa fight has attracted a great deal of attention recently, but high interchange rates are really an industry-wide problem. That’s why Retail Council of Canada (RCC) has renewed its campaign to persuade the Minister of Finance to limit the fees that merchants may be charged for accepting credit cards. Most grocers will be familiar with interchange – a compulsory fee paid to the credit cardholder’s bank, causing the merchant to receive less than the face value of the transaction. While banks are the ultimate beneficiaries, interchange rates are set by two credit-card payment networks, Visa and MasterCard, and are non-negotiable for merchants. Merchants do not object to interchange as such, but rather with the level, which averages 1.5 per cent in Canada. By contrast, the average interchange rate is 0.3 per cent in the U.K. and through most of Europe, 0.28 per cent in France, and 0.5 per cent in Australia, with no significant difference in the services provided. Public authorities (legislatures, central banks and competition regulators) in over 30 countries have already intervened to lessen the power of the credit-card duopoly in this relationship. Grocers are calling upon our policymakers to support legislation that would allow for a re-balancing of the relationship in Canada. While the issue might appear at first glance to be a business-tobusiness one, high interchange rates drive up the prices paid by Canadian consumers, costing them $5 billion annually. The problem is particularly acute in the grocery sector, for both merchants and consumers. On the business side, grocery margins are especially tight, having been measured by Industry Canada at
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1.78 per cent of revenues. That’s less than the 1.95 per cent charged in an instant for accepting a Visa Infinite Privilege card, or the 1.96 per cent for a MasterCard World Elite card. For consumers, it amounts to a reverse-Robin Hood problem, in which modest-income Canadians paying with cash, debit or standard credit cards end up subsidizing the purchases of highincome customers using premium cards. It is one thing to see these cards drive up the price of luxury goods, but quite another for basic necessities like groceries, pharmacy products and fuel. As operators of retail businesses, grocers do not call for regulation lightly. Our own industry is fiercely competitive, and we prefer that pricing be a function of open competition, with a level playing field. In this case, however, the card networks’ market dominance is such that there is a failure of competition – how else to explain that the same services are offered to merchants by the same companies in two different markets at pricing that varies by 400 per cent and more? In this type of market failure, due to oligopoly pricing, policymakers should intervene in the public interest. RCC is working toward a more balanced relationship, and it is a position that we hope will be supported by the entire grocery industry and by merchants of all types.
Karl Littler is vice-president, public affairs, at Retail Council of Canada.
September | October 2016
17
2016 CANADIAN INDEPENDENT GROCERS FINANCIAL SURVEY
STRATEGIC LEADERSHIP COFFEE
STRATEGIC LEADERSHIP COFFEE
C
offee is a thriving and evolving category that has experienced a 46% growth increase of its sales value in the Canadian market in the last 5 years. Virtuous beverage for some, morning fuel for others, coffee is and will remain an essential item in the pantry. With the development of the single serve segment and the evolution of consumers’ education on coffee origins and quality, this category certainly has many more opportunities for the years to come. In order to better understand the category, let’s look at how it is divided, and the trends that shape the way people buy and consume their coffee.
TL Single Serve Coffee
Category value ($ millions)
1400 1200
TL Traditional Coffee
1000 800 600 400 200 0 2012
2013
2014
2015
2016
46%
GROWTH in last 5 years
Source: Nielsen Market Track, National Grocery+ Drug+MassMerch+ Gen Merch+Warehouse Club, dollars, 52 weeks ending June 27 2016
CATEGORY SNAPSHOT
COFFEE SOLD IN RETAIL IS USING 3 MAIN SYSTEMS
TRADITIONAL R&G COFFEE (CANS & BAGS)
KEURIG® SYSTEM
TASSIMO® SYSTEM
$ VALUE
639 $M
460 $M
183 $M
SHARE
50% $SHR
36% $SHR
14% $SHR
$ %GROWTH
+6%
+15%
-3%
% SOLD PRICE REDUCTION
46%
25%
37%
MAXWELL HOUSE® FOLGERS® TIM HORTON’S® NABOB® KICKING HORSE® STARBUCKS® VAN HOUTTE®
VAN HOUTTE® FOLGERS® TIM HORTON’S® STARBUCKS® TIMOTHY’S® MC CAFÉ® KEURIG® VARIETY PACKS
NABOB® MAXWELL HOUSE® TIM HORTON’S® MC CAFÉ® GEVALIA® CARTE NOIRE® SECOND CUP®
TOP BRANDS ($ rank)
Other Technologies 0.5% $Shr
THE FIRST SHOPPING DECISION IS BASED ON THE TYPE OF TECHNOLOGY THAT PEOPLE HAVE AT HOME. It’s important to look at each segment and make sure to have the right space, assortment and shelf organisation for the shoppers. Sources: Nielsen Market Track, National Grocery+Drug+Mass Merch+General Merch+Warehouse Club, 52 weeks ending May 28 2016, other technologies including Dolce Gusto and Nespresso compatible pods.
STRATEGIC LEADERSHIP
KEURIG® SYSTEM KEURIG® SYSTEM VOLUME DISTRIBUTION
MERCHANDISING TIP 45
Some consumers are looking for a smaller count (price for their basket, space at home, variety may influence the shopper decision). Keeping the most popular flavours in both sizes (small and large) is still necessary.
MILLIONS SERVINGS
40 35 30
LARGE CUP
25
70%
Of the TOP 10 large format SKUs are also in the TOP of the small formats
20 15
SMALL CUP
10 5 0
2013
2016
Large format took an important part of the volume in the last 3 years. But small format still represents 50% of the volume Sources: Nielsen Market Track, National Grocery+Drug+Mass Merch, Servings, total Keurig® system including all manufacturers, 24 weeks ending May 28 2016.
Sources: Nielsen Market Track, National Grocery+Drug+Mass Merch, Servings, total Keurig® system including all manufacturers, database ending May 28 2016.
BREWERS TREND: PUT COLOUR IN YOUR DECOR! CONSUMERS LOVE THE COLOURED BREWERS! (KEURIG® K200 SALES ON WEB)
White 9%
Sandy Pearl 12%
Black 21%
Orange Zest 13%
Violet 14% Strawberry 15% Source: internal data, May 2015 to December 2015
Turquoise 16%
A NEW TREND IN SMALL APPLIANCES THAT IS SPREADING TO BREWERS: differentiated and personalized offer! A good example is the K200 model that is mainly sold in various colours on the Keurig® website!
TRADITIONAL COFFEE
Various premium segments are growing
faster than the category; make sure you have the right offer in store for your shoppers.
6
%
+14%
TOTAL GROWTH OF TRADITIONAL COFFEE
NEW! E
Organic
UTT VAN HO URE T A N SIG
+11%
+12% Whole Bean
Espresso Sources: Nielsen Market Track, National Grocery+Drug+Mass Merch, Dollar growth, $Share on Total traditionnal coffee, 52 weeks ending May 28 2016.
CERTIFIED & ORGANIC COFFEE % agree that organic and certified represents a high-quality coffee (indexed)
SIGNS OF QUALITY
224
certified coffees 176 144
organic coffees
123
130 100 77 76
18-24
25-34
35-44
45-54
100 71
68
55-64
56
Coffees that are certified* and/or organic convey quality, but this is much more so among younger consumers (18-44) than the 45+ age group. *Rainforest Alliance, Fair Trade, etc.
65+
Sources: Beverage U&A study, Hotspex, March 2016
MERCHANDISING TIP
57
%
Of the consumers that have a filter and a single serve coffee maker at home are using the same brand in both technologies.
89
%
Of the consumers that are using the same brands in both technologies find it appealing to have them regrouped in the same displays.
Merchandise traditional and single serve type of products together within the brand umbrella for a bigger impact in-store and to facilitate shopping experience. Sources: Vision Critical consumer panel, 3700 respondents, July 2016
COFFEE CONSUMPTION
Breakfast is the most popular time for coffee consumption, with
77%
of past-day coffee drinkers having drunk * coffee at this time.
67%
Coffee is the most consumed beverage after water, with 67% of Canadians having drunk a cup the day before.*
Whether it is to create an experience at home or to save money from the morning drive-through purchase, some consumers are looking for better-quality and convenient products. There is definitely an occasion-based opportunity for retailers to bring foward the coffee category in-store. This can lead to conversion of these valuable shoppers, who will also buy complementary categories to consume at home.
Coffee made in the home remains a major market. According to the CAC, OUT OF consumed the day before were made in the home.*
7
10 CUPS
*Source: Coffee Association of Canada, 2015.
STRATEGIC LEADERSHIP
Stong’s Market A Retailing Renaissance By Sally Praskey
PHOTOS: VINCENT L. CHAN
Stong’s Market: Cori and Carson Bonina, the fourth and fifth generation.
Cori Bonina is accustomed to operating in a fast-paced business environment, but when the news came that the property where her very popular and much loved Stong’s Market, a 30-year fixture on Vancouver’s Dunbar Street, was to be redeveloped, she was forced to act quickly. Recognizing this change as a rare business opportunity, and revving up the entrepreneurial spirit for which she is known, Bonina, and her husband and co-owner, Ken Nilsson, decided to open not one, but two, state-of-the-art stores to service their loyal customers while attracting new ones to the Stong’s Market experience. Grocery Business spoke with Bonina about the challenges of building two new stores, and the role her son, Carson Bonina, plays as the fifth generation of this successful familyowned and -operated independent.
“ Our customers are very much into local, particularly in this store. I think local is the buzzword now, not organic.” – Cori Bonina
28
September | October 2016
SITE PLAN While the NorthWoods store was under construction, a developer approached Bonina with a site on Dunbar, just up the street from her previous location. After much soul-searching, Bonina seized the chance to remain in the familiar area. “Suddenly, we’re not one store but two,” she says. “We didn’t plan it, but here we are.” NorthWoods represents a homecoming of sorts for Stong’s, as Bonina’s parents once owned and operated four stores on the North Shore. While Stong’s NorthWoods opened in May, the new Dunbar store is scheduled to open in December.
NAME CALLING The layout and design of the NorthWoods store signals to the consumer that they have entered a creative culinary space. Bakery = Knead Floral = Stems Produce = Harvest Meat and Fish = Land and Sea Prepared foods = Edible Cori Bonina with Carson Bonina (centre) and Ken Nilsson
WHAT’S NEW IN-STORE
POINTS OF DIFFERENCE
The 20,000-square-foot NorthWoods store boasts several features that were not in the smaller Dunbar location. For example, the store includes an area for merchandising and display, a café that Bonina says has become popular and a pizza oven to prepare Bonina’s favourite food. “Our chef’s mandate was to develop the best pizza crust possible, and I believe he has,” she says.
Asked what differentiates Stong’s from its competitors, Bonina cites the store’s product selection. “We offer a lot of different local and organic items that the corporate chains don’t necessarily carry. As well, the store design is really unique – it has a very open, European feel. And, of course, customer service is how we’ve always differentiated ourselves.”
She is also launching a loyalty-card program, which customers at NorthWoods – a very different market from Dunbar – have requested. “We’ve been in Dunbar for so long; when we opened in this new area, we found that we had a completely different customer,” says Bonina.
Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, agrees. “Stong’s is recognized as a best practice in grocery retailing, not only in Vancouver, but across Canada,” he says. “This reputation has been built by Stong’s focus on providing its customers with the products they want, and surprising them with new products ahead of their competitors.”
Although the NorthWoods customer has a different profile from Stong’s Dunbar clientele, Bonina notes that consumers in general are more food savvy and very much interested in global cuisines. They read labels and ingredient decks, and are looking for local products, particularly at the NorthWoods store.
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Barlow also notes Stong’s focus on customer service. “Cori and her team have a passion for customer service, which has been a Stong’s point of difference for generations.”
September | October 2016
29
BRINGING FRESH IDEAS AND INNOVATION TO CANADIAN RETAILERS
Greg Butler Complete Retail Solutions/ Pan-Oston
Experience
Understanding
Gene Cary, Southern Case Arts
Teamwork
Complete Retail Solutions Selects Southern CaseArts
“Our plan was to support Pan-Oston’s checkout, front of store specialization but we quickly realized the potential for CRS to represent our full line in Canada”. Gene Cary, President , Southern CaseArts
“Southern CaseArts enables us to add a full assortment of refrigerated and hot specialty cases along with complimenting fixturing to truly offer complete solutions”. Greg Butler, President CRS/Pan-Oston
Fresh display and fixturing solutions backed by experienced sales support, project management and nationwide service in Canada.
24-930 9 s h t o t Bo 8 2016 See us a Oct 17 & 1
www.completeretailsolutions.com
ngress Toronto Co ntre Ce
Representing… And the Peterborough industry alliance WOODARTS store fixtures/custom millwork
Experience
Understanding
Teamwork
660 Neal Dr. Box 267 Peterborough ON K9J 6Y8 705-748-4811 Toll Free 1–800-563-9182 Fax 705-748-9213
Cori’s POV Leadership style “I listen and encourage my team to succeed and be the best they can be.”
Most important business lesson “Ask questions, and never be afraid to take a risk or make a mistake.”
Team building “We hire on personality. Any skill can be learned as long as the person has passion plus the desire to learn and grow.”
Best career advice you received “To work on your business not in it.”
Passion “I love cooking and I collect cookbooks – I have over 1,000 in my collection. Just recently, on our trip to Newfoundland, I added five more.”
GENERATIONAL SHIFT
LESSONS LEARNED
Bonina’s son Carson, a recent business management graduate from the University of British Columbia, and a fifth-generation member of the Stong family, is now front-end manager at NorthWoods. In that capacity, he manages the cashiers, as well as file maintenance, cash and depositing, price changes, and the health and wellness department, among other responsibilities.
Bonina admits she didn’t have a great deal of planning time prior to construction. “We were kind of thrown into it,” she says. Never having built a store before, there are a few things she would do differently. “I would involve my staff and my department managers more in the actual planning because they’re the ones who are in the trenches working in it. What I might think looks great might not necessarily work great. We probably would have also put more detail into planning the HMR section,” she adds. The store now has a chef on board who is advising on refinements.
“We are mentoring him and grooming him to move up in the business,” Bonina explains. Carson, like his mother, grew up in the grocery environment, working summers and after school in the produce department (“mostly packaging berries and cleaning shelves,” he laughs), and later in the off-site commercial kitchen. “Many of our family vacations were spent touring different grocery stores across Canada,” he says. “Sitting around the dinner table, grocery was, and still is, almost always the topic of conversation. We can say we are a true family business when our family reunions turn into a business meeting.”
Bonina credits Stong’s wholesaler, Associated Grocers, with helping set up the new store. “They were absolutely tremendous,” she enthuses. “They gave us staff to help set up the store and anything we needed. They were there for us.”
“ I have watched my mother work and succeed my entire life. My mother pours her heart and soul into everything she does, and it’s her passion that makes it successful. I have learned that when your customers and staff see your passion for the company, it’s infectious.” – Carson Bonina grocerybusiness.ca
September | October 2016
31
Millennial Moms
MARKETING TO MILLENNIAL MOMS
THE PERSONAS
Canadian Millennial families are three million strong and growing. Central to the success of any grocery retailer will be effectively navigating a relationship with the tech-savvy and well-educated Millennial Mom. Grocery Business and Parent Life Network teamed up to research what motivates these consumers, and how to effectively market and merchandise to them. This feature is the second segment of a two-part article on the shopping behaviour of Millennial Moms. The first part appeared in our July/August issue. You can read the full report on our website: grocerybusiness.ca
24%
32
THE CONNECTED, LOW-EFFORT SHOPPER
23%
THE ONE-STOP, WHOLESOME SHOPPER
Although their household income is 10 per cent lower than other Millennial Moms, they are more likely to spend on hot meals-to-go and sit-down restaurant-style meals at their preferred grocery store. For this shopper, convenience is key both in food preparation and store location. They are social media savvy, read store reviews regularly and are comfortable sharing their grocery shopping experiences online. These Millennial Moms skew younger (20-24), have one child under two years of age, live in a rented home and are urban dwellers with plenty of grocery store choices. And when it comes to organic foods, they say it’s the only thing they will feed their child, regardless of cost. Many of these shoppers were born outside of Canada and enjoy shopping – often with their spouses – at stores that offer new food discoveries.
Big-box stores here we come! This shopper is more likely than other Millennial Moms to prefer a once-a-week, one-stop shopping experience that the whole family can participate in. About 10 per cent wealthier, with a five per cent higher grocery spend (perhaps because they have two or three children), these shoppers are somewhat older than the average Millennial Mom and are more likely to live in suburban or rural areas. Nutrition is a priority, and they prefer to purchase brands they trust. Marketing that focuses on a leisurely one-stopshopping experience with the focus on wholesome foods will resonate.
Strategy: • Consider marketing a high-end shopping experience highlighting new food discoveries that these shoppers can share on social media with their friends.
Strategy: • Marketing the concept of a leisurely, one-stop shop, with wholesome foods from brands they trust, will resonate with this shopper.
• Create a unique experience this shopper can share with a friend. For example, invite them to an exclusive VIP event, such as a wine and cheese pairing class, in your store.
• A personalized, direct communication thanking shoppers for their loyalty, including coupons for larger packs of the brands they usually purchase.
September | October 2016
Millennial Moms
21%
THE DEAL-SEEKING FREQUENT SHOPPER These shoppers are always looking for the best deal, and can be classified as “cherry pickers.” To save money, they are more likely to shop at more than one store more than once a week, and prefer stores with consistently lower prices. They are less likely to try new foods, and although these Millennial Moms are impulse buyers, it’s usually of products they’re familiar with. They are also time-pressed, so their multiple-store/multiple-times-a-week shopping strategy has everything to do with their need to save money rather than saving time. This shopper is aware that since they’ve become moms, shopping in discount stores is a major shift from prior shopping behaviours.
18%
THE DISENCHANTED, PEOPLE-FIRST WHOLE STORE SHOPPER They are more likely than other Millennial Moms to feel that most food advertising is not geared toward them. Perhaps this is why they prefer the personalized experience of a grocery store with knowledgeable, friendly and helpful staff. These Millennial Moms feed their children more nutritious food than they eat themselves, and are more likely than other Millennial Moms to say that they prioritize their children’s health over their own. With a 10 per cent lower household income and five per cent lower grocery spend, these Millennial Moms are more likely to rent their homes in a suburban area and grocery shop less than once a week. However, once they’ve found a store they like and that offers the experience they’re looking for, this shopper is loyal.
14%
Strategy: • Marketing messages with a focus on everyday low prices on items they purchase often, combined with deep discounts on items they buy less frequently, will win with this consumer. This consumer responds to flyers with coupons and mobile apps loaded with deals just for them.
Strategy: • While this consumer may be less appealing to some grocers, they still represent 18 per cent of available shoppers. For grocers with top-notch service and best-in-class customer policies, this shopper can become a loyal and, over time, profitable customer.
THE TIME- AND COSTCONSCIOUS SHOPPER
Usually urban-based, this grocery shopper is an early adopter if the product or service promises to save them time at no additional cost. These are the shoppers driving the online trend, since they are more likely than other Millennial Moms to use online or click-and-collect services. And while they have a 10 per cent higher household income than the average Millennial Mom, these shoppers are more likely to ignore brand names and to purchase the lowest-priced item, including sale or discounted products. This shopper is time-pressed, so prefers to shop alone and only at stores within a 10-minute drive of home. grocerybusiness.ca
Strategy: • Focus messaging on saving time and money. • Include a significant number of loss-leader items to attract their attention. • Click and collect, with limited fees for new users, is perfect for this shopper, but ensure that the online experience is seamless, or they’ll move on.
About the researcher Sean Copeland is the director of research at Student Life Network & Parent Life Network. Copeland is a Canadian Millennial and a Certified Marketing Research Professional. If you have any questions regarding this study, please contact: Sean Copeland sean@parentlifenetwork.com 905-531-5155 Interested in learning more about how the Parent Life Network can support the growth of your brands? Please contact: Dave Chestnut dave@parentlifenetwork.com 416-725-7992
September | October 2016
33
Independents’ Day
Great things come
in small packages How the small guys are driving big changes in grocery. By Thomas A. Barlow
Vincent Van Gogh said that “great things are done by a series of small things brought together.” As the grocery industry gathers October 17-18 for Grocery Innovations Canada, its annual exhibition and conference, it’s a timely reminder of the importance of small businesses, and the impact that a collection of individuals can have on the industry as a whole. Often heralded as the backbone of Canada’s economy, small and medium-sized enterprises (SMEs) account for 98 per cent of all businesses in Canada. Representing $12.8 billion in sales, Canadian independent grocers have a history of doing great things together and driving change on issues in the grocery sector. An example is the constant pressure that the Canadian Federation of Independent Grocers (CFIG) has put on government to compel the credit-card companies to review their rates. CFIG led the creation of the Small Business Matters Coalition, which comprises more than 25 national trade associations representing more than 100,000 small businesses across Canada. The result? Parliament will review a private member’s bill this fall that proposes changes to the fees. Visa has just lowered its grocery rate to 1.26 per cent, which will save the average store tens of thousands of grocerybusiness.ca
dollars; one of our members estimated a business savings of $40,000 per year! Another area in which independent grocers have been pushing for change is restoring normal competitive practices to the food industry, which have become distorted due to retailer and supplier consolidation. CFIG, not just on behalf of its members, but for all of us who believe in this industry, continues to advocate for a long-term industry-wide solution – perhaps one as simple as enshrining a few basic principles that ensure fairness for all, through a Code of Conduct. In Ontario, where the provincial government brought forward changes to the distribution of wine and beer, CFIG worked to ensure the frameworks rolled out did not put independents at a competitive disadvantage. Consequently, independents were allowed to bid for licences against other independents in a separate pool. As well, they received a guaranteed 20-per-cent allocation of the beer licences in Ontario; that has been increased to 25 per cent for wine licences. Another example of small business making a difference is the work that CFIG and its members did, in partnership with the chains
and the Government of Canada, in cochairing the development of a national food safety program for all retail grocery stores in Canada. So whether it is investing in food safety, launching the country’s first electronic loyalty program, pioneering online grocery shopping, showcasing and eagerly testing new products, or leading the early support for buying local – innovation remains the lifeblood of our independents. This year, Small Business Week in Canada is celebrated October 16-22. There can be no better way to recognize this special event than by joining us: October 17-18, 2016 Grocery Innovations Canada Toronto Congress Centre GroceryInnovations.com
Thomas A. Barlow is president and CEO of the Canadian Federation of Independent Grocers, which represents more than 4,000 independent grocery retailers across Canada. Email: tbarlow@cfig.ca
September | October 2016
35
DOING THE
“LOCAL” MOTION By Sally Praskey
For Debra Ramage, owner/operator of Drayton Food Market, an independent grocery store in the village of Drayton, Ont., it’s all about being local – whether it’s hiring staff, sourcing fresh meats and produce or sponsoring community events. In a bedroom community where many residents work in larger centres, Ramage knows she must pull out all the stops to ensure her customers purchase their groceries locally. “I have to continually think of new ideas to attract the locals,” she says. This is especially true in the off-season when the large contingent of cottagers pulls up stakes. With this goal in mind, Ramage works extensively with community organizations; she also started a popular loyalty program. “For every $5 you spend (excluding liquor or tobacco), we give a stamp,” she explains. “You can either save those stamps for yourself and get dollars off your groceries, or you can give the stamp back to the community.” In the past two years, the store’s program has donated more than $15,000 to the community. And when it comes to sourcing fresh food, the closer, the better – free-range chickens, grain-fed turkeys and all manner of produce from local farmers, including unique products from the nearby Mennonite community. “Whatever I can get locally, I do,” says Ramage.
36
September | October 2016
Independents’ Day
grocery store owners themselves.” She also takes advantage of educational events offered through the Canadian Federation of Independent Grocers (CFIG). Beyond the demands of managing her own grocery business, Ramage has ambitious plans to develop a strip mall on property she owns beside the store. Also on her agenda is online ordering through the store’s website – she already takes phone orders for home delivery – and teaming up with the owner of the local gym to promote healthy eating online and in-store. On display: Drayton Food Market, liquor department
There is also a strong focus on vegetarian and health foods, inspired by visiting actors who were performing at the Drayton Theatre. “The Drayton Food Market was a bit of a beacon for me and my colleagues when I spent several weeks in a theatre production there,” says Adam Proulx, a Toronto-based actor. “We were happy to find that the market stocked many items you would not expect to find outside of an urban specialty store. On my first visit, for instance, I found a variety of protein powders and really interesting produce items.” It didn’t take long for Ramage to realize that it wasn’t only the actors who craved healthy fare. “It was the theatre that started it,” she says, “but now it’s just part of our store.” Earlier this year, Ramage rented out 300 square feet in her 12,000-sq.-ft. store for a pharmacy that she helped design and build. “We feel that we’ve created a point of difference from a main pharmacy because it’s a one-stop shop,” she says. “Customers can put in their prescriptions and shop the aisles of my store while they wait.” They can even pick up beer, wine and liquor, as Drayton Food Market is also an LCBO agency store.
grocerybusiness.ca
Although Ramage has grown up in the grocery industry – she is the daughter of grocery and real-estate entrepreneur Merlen Kropf – she felt she still had a lot to learn as a relatively new (five years) store owner, and so she joined the board of Distribution Canada Inc. (DCI) to help her in the process. “I have found my experience at DCI to be very valuable – the relationships with not only the vendor community, but also the
Ramage’s creativity and commitment continue to persuade local shoppers that shopping close to home can provide the best of all worlds. “I’m very proud of this little venture I’ve got going on here,” she enthuses. “It’s a passion for me.”
CFIG ADVISORY COMMITTEE IN ACTION Because Drayton Food Market is an agency liquor store, and Ramage was familiar with the rules and regulations of the LCBO and The Beer Store, CFIG president Thomas Barlow asked her to serve on the association’s special committee on selling beer and wine through the grocery channel. Ramage’s addition to the committee was “absolutely critical,” says Gary Sands, CFIG’s vice-president of public policy. “She provided the on-the-ground experience we needed when talking with the government.” Through its lobbying, CFIG ensured that there were two bidding pools to sell beer, one for independents and one for the large grocery chains. CFIG also negotiated 20 per cent of the allocations for independents.
September | October 2016
37
Independents’ Day
FMS and Canadian Federation of Independent Grocers
2015 Financial Survey
For the second consecutive year, the Canadian Federation of Independent Grocers and FMS Solutions Holdings LLC have collaborated on a financial benchmarking study of independent grocers in Canada. Key findings: Although independent grocers continue to thrive, and inflation drove sales increases, the effect of the independents’ main competitor, the supercentre, took a toll on margins.
Inventory Turns by Department
Shrink by Department
Total Store
16.5x
2.7%
Dry grocery
14.7x
0.8%
MARGINS
Dairy
41.7x
2.0%
- 4.7%
Meat
39.4x
3.7%
Produce
52.9x
4.8%
Prepared
NA
5.9%
SALES
+ 4.8%
40
September | October 2016
Independents’ Day
Net Profit Average: 0.88% Highest Net Profit Reported: +9.97% Lowest Net Profit Reported: -7.63%
Same-Store Sales Gains
+4.8%
Total Store Gross Margin
25.9%
35% Employee Turnover Part-time
17.5% Employee Turnover Full-time
Top Three Concerns 1. Local & national economy 2. The competitive landscape intensifies 3. Staffing, hiring and retention are always key issues, but higher unemployment in some areas of the country has increased the pool of available workers grocerybusiness.ca
Since 1974, FMS Solutions Holdings LLC has supported independent grocers in their decision-making process by providing them with financial tools that are timely and accurate. FMS is a proud member of the Canadian Federation of Independent Grocers and Distribution Canada Inc.
September | October 2016
41
SPECIALTY FOOD ASSOCIATION
Deb Crisan (centre), Rao’s Specialty Foods, with John Hufsky (left) and Nick Mattiace, Husky Food Importers
Summer Fancy Food Show New York City June 26 – 28, 2016
Henry Evans and Alain Larivee, Twinings North America
Scott and Rebecca Martin, Something Special
Heidi Pazulla, Single Cup Coffee
Natasha Strim and Seana Sterner, Nonna Pia’s Gourmet Sauces Ltd.
Tony and Yelena Rabinovitch, and Diana Hecht, Pelmen Foods
Sanjeev Shah and Oorbee Roy, Shah Trading Company
The Slama family, MedFlavours Yvonne Robertson and Nora Currie, Sahara Tea
Khadija Jiwani, Chef Bombay
Sofi Award finalist Shelley Wallace, Hagensborg Chocolates
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September | October 2016
Ryan Albright and Brook Dickinson, Covered Bridge Potato Chips
Mike and Ashley Tott, Gourmet Village
Anastasia Klyushin and Nathalie Grace, Simply Protein
RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERS STRATEGIC LEADERSHIP YOGOURT 2016 •
STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT
T
he yogourt category continues to increase as Canadians are choosing to snack and cook with more natural, great-tasting, better-for-you products. Yogourt consumption has expanded
into more dessert and breakfast occasions as consumers are looking for hearty breakfast options to keep them going until lunch, and more nutritious, yet still craveable, desserts.
MARKET FACTS
THE YOGOURT CONSUMER $107
91%
Total Yogourt Category is $1.43
17 X
2
Trips per year
Units per trip
billion dollars and is growing at +4%. Yogourt in tubs continues to be the largest segment, representing 82% of Household Penetration
the total category dollars and
Spend per year on Yogourt ($6.40 per trip)
63% of category growth. Within the tubs segment, weight management (weight wellness) products continue to be in decline as consumers
TOTAL YOGOURT IN SPOONABLE TUBS = $1.2B (+3%)
shift away to other product
*
segments. Drinkable yogourt, while only 12.6% of the total yogourt
14%
category, has seen growth
TL Weight Management (-20%)
of +15%, driven by Kefir (over 60% growth vs. PY). Families continue to be
3%
TL Organic (+1%)
13%
TL Natural (+3%)
important to the yogourt category, over-indexing on the amount of yogourt consumed.
11% Source: Nielsen MarketTrack – National GB+DR+MM – 52 weeks ending June 25, 2016
TL Taste (+8%)
27%
TL Functional Yogourt (+4%)
STRATEGIC LEADERSHIP • 2016
32%
TL Greek Yogourt (+15%)
THE GROWTH OF GREEK YOGOURT
ALTHOUGH THE GREEK SEGMENT IS MATURING, IT IS STILL OUTPACING CATEGORY GROWTH.
Greek ($377M, +15%) is now the largest sub-segment of Adult yogourt tubs ($ Shr. 32%; +3.4pts).
National Greek Yogourt - 5-Year Trend $ VOL.
To continue the momentum, manufacturers are innovating into more occasion-based products – breakfast & desserts. “Snacking” is the number one eating occasion for yogourt, followed by Breakfast – combined they represent 61% of Yogourt consumption.
202,211
290,909
310,605
356,716
377,525
2012
2013
2014
2015
2016
Source: Nielsen Market Track, TL National GB+DR+MM, 52 w/e June 25, 2016
Canadians want to snack on something they enjoy, something they crave, as a treat, and for nutritional reasons. Yogourt is well positioned to grow the “away from home” breakfast occasion because it is a portable option that is aligned to the Healthy balanced lifestyle of Canadians.
YOGOURT FOR ALL OCCASIONS Most of the yogourt consumption occurs in the morning; however, there are growth opportunities with evening snacking or desserts.
43%
27%
BREAKFAST
17%
SNACKS
9%
TOP NEED STATES (SNACKING)
DINNER
LUNCH
15%
OF MEAL HOUR
5%
11 PM
10 PM
9 PM
8 PM
7 PM
6 PM
5 PM
4 PM
3 PM
2 PM
1 PM
12 PM
11 AM
10 AM
9 AM
8 AM
7 AM
6 AM
5 AM
4 AM
3 AM
2 AM
1 AM
0% 12 AM
50%
QUICK & EASY
46%
HEALTHY/NUTRITIOUS
46%
Data Source: The Nielsen Company, Consumption Diary, National, 2015.
%
10%
TASTES GREAT
HELLO WEIGHT WELLNESS!
M
ore and more consumers are stepping away from dieting — quick weight loss and extreme sacrifices — and changing their mindset to Weight Wellness. Weight wellness yogourt consumers are looking for “perfectly balanced solutions” – a great-tasting yogourt with no artificial sweeteners, a creamy texture, and often zero fat. Increasingly, consumers are willing to have a few more calories for the trade-off of consuming a more natural product.
THEN
NOW
Healthy lifestyle
Fixed weight-loss goals Low calories
Feeling satisfied with the right balance
Aspartame, Artificial Sweeteners
Natural Sugar, Long-term wellness
For recipe ideas, visit www.astro.ca or the Astro YouTube channel: https://www.youtube.com/user/astroyogourt
WEIGHT WELLNESS CONSUMERS... 0% fat Same great taste as regular yogurt Light texture and mouth feel (contributes to feeling of lightness) Lower calories (but not necessarily the lowest)
Weight Wellness Consumers Migrate to More Natural Yogourts Weight Management last 52 weeks absolute $ change
Natural / No artificial sweeteners (willing to trade up on calories for a more natural product) RMG Astro Exploratory Research, February 2016
180,000 160,000
-19%
140,000 120,000
+20%
100,000 80,000 60,000
GROWTH
40,000 20,000 0
2015
2016
Artificial Sweeteners
2015
2016
Natural Sweeteners
The traditional Weight Management products sweetened with Artificial Sweeteners are showing decline year over year, while products sweetened with natural sweeteners are growing +20%. Source: Nielsen MarketTrack – National GB+DR+MM – 52 weeks ending March 5, 2016
STRATEGIC LEADERSHIP • 2016
Business Planning
Time’s up for
joint business planning Joint business planning is outliving its usefulness to both grocery retailers and vendors. What began as a strategic response to intensifying competition is transforming into a costly, complex and cumbersome undertaking that’s no longer delivering the desired results for either party. With growth prospects looking grim across the sector, it’s time for grocery retailers and vendors to embrace a simpler approach – one that relies less on short-term price promotions and more on long-term, sustained value gains that reduce demands on people and operations. A good idea at the time Joint business planning emerged in the mid-2000s, and its use grew sharply thereafter. Grocery retailers pushed vendors for more trade investment to help stay competitive in an increasingly crowded market; vendors complied, demanding better performance and stretch volume targets in return. The result? Incremental sales rose through intense price competition, only to be followed by lengthy periods of price deflation across many categories. Promotional calendars became congested. Vendor trade spend increased while retailers’ gross margin eroded. Both parties spent time and money managing a complex web of agreements and pursuing competing interests, rather than on the core business. What was meant as a collaborative process often created more antagonism. Joint business planning’s diminishing returns have reached a point where it’s providing little, if any, incremental benefit to grocery retailers and vendors. Change is needed, and fast. Growth prospects can’t justify cost Arguably the most highly correlated macro indicator for food consumption – population growth – is slowing: Canada’s population grew a mere 0.9 per cent in 2015, down from 1.1 per cent the year before, and there’s no sign of a turnaround. At the same time, consumer trends are changing: consumers are cooking less and turning to convenience foods and out-of-home dining.
grocerybusiness.ca
Andrew Bond, Deloitte Canada
Given these market realities, grocery retailers and vendors will find it increasingly challenging to achieve topline revenue growth, especially in off-trend categories. To preserve or improve margins, companies need to reduce costs in their current operating model, and joint business planning is a great place to start. Rebooting for a low-growth world Some parties are already beginning this reboot of their planning process. A number of grocers are enlisting their national procurement groups to help consolidate and minimize the number of trade agreements in play, thereby reducing the associated administrative burden. We’ve seen one vendor roll program funding into the invoice price and entrust promotion to the retailer, allowing the vendor to trim its sales force. This change in strategy has translated into less stress on supply chains and less need to maintain costly safety stock. Moving away from joint business planning requires companies to forego short-term revenue gains in exchange for lower costs, reduced complexity and longer-term growth. The savings should be reinvested in building the brand and delivering consumer value. Improving consumer value is vital. Consumers will quickly notice fewer price promotions, so companies will need to deliver on other aspects to justify higher prices. By adopting simpler approaches, retailers and vendors can significantly reduce costs, improve efficiencies and refocus energies on delivering value to consumers, which, over time, can give rise to long-term, sustainable boosts to revenue and, more importantly, profitability.
Andrew Bond (anbond@deloitte.ca) is a Senior Manager in Deloitte Canada’s Performance Enhancement Advisory practice.
September | October 2016
49
ABC Store beer and wine section, courtesy api(+)
A Potent Brew With provincial laws around the sale of beer and wine finally expanding to include grocery stores, the channel has a unique opportunity to introduce a popular category to their product offering. Competition for market share will be fierce, but the grocers who are able to develop an effective merchandising strategy, introduce an exceptional product mix and communicate an authentic story will be the ones toasting their success.
Beer tips for sips • Cold is best! • Waterfall display racks help consumers locate products more easily • Emphasize seasonal products • Showcase local products as often as possible Source: Mill Street Brewery
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September | October 2016
THE CONNOISSEUR The craft beer consumer is a discerning one. Mill Street Brewery, one of Canada’s most successful purveyors, makes the case for beer authenticity and seasonal variety.
A VARIETY OF VARIETIES Much of the excitement around craft beer comes from the variety of taste profiles that are possible. Canada has an incredible craft brewery scene, and this is a trend that is not going away, so there is a huge opportunity for grocery retailers to forge long-lasting relationships with breweries. Consumers appreciate the fact that variety is a natural product of the craft beer industry. Unlike macro-breweries, craft breweries follow the seasons, and make different styles of beers at different times of the year. For example, stouts and porters are commonly made in colder months, whereas a crisp lager could be more appealing on a hot summer day. This enables brew masters to develop innovative recipes for consumers interested in trying new varieties.
MERCHANDISING BY DESIGN When it comes to selling beer and wine in a grocery environment, U.S. retailers set the standard. Tom Henken, vice-president of Tampa-based design firm api(+), shares his insights on creating compelling beer and wine department designs. BEER RENAISSANCE
Schnucks wine department, courtesy api(+)
HOT beer taste trend India Pale Ales (IPAs) are a growing segment
69% in Ontario 64% nationally CRAFTING A STORY Craft beer drinkers are very interested in the story behind their beers. This might include knowing about the people who developed the recipe and brewed the beer, the beer’s ingredients and flavour profile, and much more. The Beer Store in Ontario has limited visibility and ability to tell these stories, giving grocery a significant advantage.
CIDER-HOUSE RULES As consumers become increasingly healthconscious, they seek out new products that suit their needs. Ciders are gluten-free, and are a great option for consumers with celiac disease or gluten intolerance. There are many craft ciders in the market now that are challenging pre-conceived notions of how a cider tastes.
grocerybusiness.ca
With the rise of craft options, beer now has more in common with wine and should be presented accordingly. Increased flavour profile options require similar organization and communication as wine, so there are opportunities to merchandise and communicate by type, occasion and food pairings. KNOW YOUR CUSTOMER! It’s vital to know your market and build a program that speaks to the demographic that shops in your stores. Employ end-caps, specialty fixtures and communications that will resonate with your target audience, but will not exclude other demographic groups. The majority of wine buyers aren’t connoisseurs. So keep most communications focused on the middle market. SIGN LANGUAGE Selecting the perfect wine or beer for an occasion can be intimidating to consumers. To help them make informed choices, use a strategic, welldeveloped signage system that creates a self-guided tour and highlights beverage differences. Group by beverage type, and it’s always a good idea to communicate the taste profile and suggested pairings.
CONSIDER A STORE WITHIN A STORE Wine and beer shopping is a separate experience from stocking up on staples. Create a store-withina-store to recognize this. Consider fixtures, graphics and material palettes that will give your department a character of its own, but still holistically integrate into the overall store design. The area should feel engaging, with enhanced finishes and lighting. Strategically break up the layout to encourage exploration and promote add-on purchases. FOCUS ON FIXTURES Use a variety of fixtures to vary the visuals. For example, raise and lower gondolas to create mini shops that can be merchandised with complementary beverage selections such as wines and beers perfect for your barbecue or dinner party. Enhance the experience by placing fixtures at varied angles to create a meandering path. This generates a market feel and slows the shopper’s pace.
Tom Henken is vicepresident and director of design for api(+), a retail design and architecture firm based in Tampa, Florida, that specializes in food retail design.
September | October 2016
51
Collaboration
The Case for
Collaboration in CPG Embracing nutrition, health and sustainability By Christopher Marinangeli and Joanna Castellano Globally, the CPG food industry is challenged to provide products that are tasty, healthy and sustainable. Canada is uniquely positioned as a hotbed for food innovation, with tremendous opportunities for collaborative relationships with academia, NGOs and even government. For example, academic institutions across Canada have prominent food-science departments that continue to develop new technologies that can assist with product development. With nominal funding, food scientists within academia can exploit new tools for triggering and accelerating innovation. Students are challenged to think outside the box with an approach that can support multiple metrics of product development, such as health and nutrition, cost and sustainability. By collaborating with academia, CPG companies get a jumpstart on the innovation process, while students have a rare opportunity to engage with the food industry. The resources available to the food industry in Canada do not stop with academia. Commodity associations are well versed with the technical aspects of the ingredients they represent, and can link industry with businesses that can address a spectrum of challenges. And as non-profit organizations, provincial food development centres can provide unmatched guidance across various food applications that can, again, fast-track innovation objectives.
grocerybusiness.ca
On the marketing front, business departments at Canadian academic institutions have developed algorithms that can predict the success of new food products and provide supportive analysis that deciphers which foods best align with a brand’s equity assessment. After all, if food system change is to be effective, products that support consumer beliefs, while still meeting nutrition and sustainability goals, will have the best chances of remaining profitable.
while addressing the broader themes of health and sustainability. The notion that “taste is king” will always be a prominent guiding principle for successful food innovation. But never before has the relationship between food, health and the environment attracted the global attention that it does today. Access to information through platforms like social media has expanded consumers’ global awareness around healthy diets and respect for the environment.
Government is often one of the last places where industry would think to seek input for food innovation. However, mandate letters from Agriculture and Agri-Food Canada discuss the implementation of a national food strategy. In addition, various government-sanctioned private–public partnership programs offer government-matched funding for projects that bring value to Canadian agriculture, including product development. The co-operative approach to these programs also helps forge partnerships among industry, academia and provincial food development centres that can bolster and expedite innovation around new and renovated food platforms.
Academia, government and NGOs want to work with the food industry. Strategic collaborations with various stakeholders to accelerate projects that tackle global food-related challenges can develop into alluring food attributes that align with consumers’ expectations, and extend beyond that of taste.
In-house insights and R&D departments within industry are neither replaceable nor expendable. However, the expertise of industry scientists, merged with available tools to accelerate the implementation of strategic goals, would ensure the success of industry
Christopher Marinangeli, PhD, RD, is director, nutrition science and regulatory affairs, Pulse Canada. Joanna Castellano is CEO of Q:Quest.
September | October 2016
53
Festive
’Tis the Season for…
Indulgence
For consumers, the holidays are a time of celebration and indulgence, and for grocers a chance to showcase the best of their offerings with a focus on higher-margin products. Cross Merchandising: Partnering with other departments can be a cost-effective way to reduce shrink and can lead to extra sales for the total store. Merchandising deli items with produce items that are on-promotion can help draw shoppers to the deli, especially if the produce department is nearby.
Holiday Sous Chef: With so many options available through online delivery services, delis can be an alternate resource for consumers. Full meals, meal components, or ingredient preparation are all services the deli is well suited to deliver. Continue the services throughout the year by rotating offerings and online engagement to see what people are doing with the meals the deli helped make.
Entertaining in Style: Product offerings are increasingly upscale as consumers’ tastes evolve and their expectations rise. Indulgence is high during the holidays, so showcase your premium items. Consumers are in an adventurous mood; gourmet ideas such as cheese infused with coffee, beer or wine, hearty cured meats from around the globe, and exotic spreads with unique flavour combinations have a receptive audience now.
49%
of households purchase specialty cheese
A specialty cheese purchase doubles basket size:
92 vs $48
$
Source: International Dairy Deli Bakery Association, What’s In Store
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September | October 2016
Festive
High on
the Hog Today’s consumers consider themselves food adventurers rather than food traditionalists, and with pork now a staple on restaurant menus and pulled pork showing up in everything from sandwiches to lasagna, expect your customers to be looking to replicate their restaurant experiences during the holidays.
71%
purchase pork during the festive season Most Popular Cuts Pork Chops Pork Tenderloin
31% 29%
Source: Ontario Pork Council Study
TIP: Cross merchandise with flavour enhancers such as rubs, marinades and sauces
Taking the Cake When customers visit the bakery department, their fondest food memories are engaged. Michael Givens, president of La Rocca Creative Cakes, which is celebrating 30 years in the premium baking category, shares best practices to maximize sales: There is no substitute for an informed and engaged staff. They can generate trial and drive sales. Staff should be encouraged to sample new seasonal items, and should always have a solid understanding of which core items drive overall bakery performance. The cake category is rooted in celebrations. Occasions and milestones create a customer mindset that is more price elastic. However, the true success of the category comes from multiple annual purchase occasions, so keep consumers engaged with social media outreach and frequent sampling programs. Lead with premium-positioned items to draw in the customer, then surround that offering with value and core store-made items. At the same time, strategic price promotion can help customers decide to trade up to a premium offering.
WINNING COMBO BEER + CURED MEATS grocerybusiness.ca
Beautiful dessert photos dominate social media feeds, so encourage your customers to share their images. This comes with the additional benefits of increased traffic and a more engaging shopping experience.
September | October 2016
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Sept | Oct 2016
STANDING OVATION
MEAL SOLUTIONS FOR MILLENNIALS
PMA SCHEDULE AT-A-GLANCE
Produce Manager
STANDING OVATION
Produce manager Gary Standing has earned applause for the innovative way in which he promotes his department’s products. By Sally Praskey Gary Standing
“Never lose sight of your dreams.” That’s the mantra by which Gary Standing, produce manager at the Atlantic Superstore in Sydney River, N.S., lives. To say that Standing has a passion for produce is putting it mildly. Bolstered by 31 years in food retailing – the last 25 with Loblaw – Standing realized his dream of inspiring people to eat healthier when he created “Fruitilicious,” a unique program to showcase fruits and vegetables. The journey began simply enough, with Standing calling on a few neighbourhood schools in 2013 to introduce kids to the taste experience offered by various types of produce. After the local newspaper and the CBC affiliate got wind of his activities, “the legend of Fruitilicious started really taking off,” says Standing in his distinctive Cape Breton twang. He has since helped thousands of children discover a liking for the exotic products that he highlights in his witty and entertaining presentations. Clad in a lemon yellow “Fruitilicious” T-shirt with his slogan “Be Polite. Take a bite” emblazoned on the back, Standing banters with the students while urging them to taste unusual fruits and vegetables such as dragon fruit, guava and daikon. Along the way, Standing has lost 62 pounds. “If I was preaching to people about healthy eating and trying new things, it was time to start practising what I was preaching,” he says.
grocerybusiness.ca
Earlier this year, Loblaw, who Standing says “supports me 100 per cent in my ongoing push with Fruitilicious,” arranged for him to take his show to a school in Cambridge, Ont., where it was just as enthusiastically received as in his home province. He was even recognized beyond our borders when he won the United Fresh Produce Association’s 2016 Retail Produce Manager Award – the first Canadian to do so. “It’s a crowning award in my career to be recognized at that level,” he says proudly. But there is still much more room for Fruitilicious to grow. Standing has branched out to seniors complexes, First Nations reserves, and other communities, often logging as many as three presentations a week during the school year. “The kids are so much fun, but the adult sessions are very rewarding,” he says. “You’re never too old to learn.” He often tag-teams those presentations with dietician Ann Marion Willis, who talks about the nutritional value of the produce after Standing discusses taste and preparation. In the fall, he and Willis will take their act to 150 government officials in Sydney. For Standing, it’s all about helping people be healthier. “It’s great that Fruitilicious drives sales, but at the end of the day, the biggest reward is how we’re changing the lives of tens of thousands of people along the way.” A dream come true.
September | October 2016
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© 2015 POM Wonderful LLC. All Rights Reserved. POM, POM WONDERFUL, POM POMS WONDERFUL, the Bottle Design and the accompanying logos are registered trademarks of Canada Bread Company, Limited, and used by POM Wonderful LLC under license. PF13865
It’s P∂M Time! At P∂M, we believe fall is the most W∑nderful time of the year. Especially if your produce department is fully stocked with P∂M P∂MS, P∂M Wonderful 100% Pomegranate Juice and P∂M Wonderful fresh pomegranates. All three will be supported with a national marketing campaign, including in-store POS, promotional support and public relations! To help sweeten your season, our tasty trio will be supported by the biggest merchandising team in produce. Get ready. It’s gonna be P∂M time all the time. Order your P∂M display bins now at CustomerService.POM@Wonderful.com or contact your local W∑nderful Sales representative at 877.328.7667.
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CE U D PRO
% organic
R O D VEN
R O S ADVI
of consumers are buying
products
* 2015 The Hartman Group
ANIC ORG
Mike & Mike’s Organics at a Glance ESTABLISHED: 2004 LOCATION: Vaughan, Ont. SOURCE: Directly from certified-
Mike & Mike’s Organics: Delivering on quality, selection and personalized service
selected sources in the United States
Mike & Mike’s Organics is the go-to source for hundreds of fresh, certified-organic fruits and vegetables, and that includes offering customers time-saving, personalized services and solutions.
and internationally.
Every member of the M&MO team thoroughly understands the esthetic and
organic produce growers in Ontario, Quebec and B.C., as well as carefully
DISTRIBUTION: Independent health and natural food retailers including Fiesta Farms, Nature’s Emporium and Goodness Me!, as well as chains such
taste variations of more than 300 types of certified-organic produce arriving at the distribution warehouse. The sales team is in daily contact with retail customers who trust M&MO to fill their customized orders. M&MO delivers directly to stores across the Greater Toronto Area, six days a week.
as Longo’s. STAFF: More than 50 team members
mikeandmikesorganics.com
M&MO is unique in the Ontario market for offering retailers an organized, responsive, solution-based approach to purchasing certifiedorganic fresh fruits and vegetables.
M&MO Growth Curve
2013
2014
2015
M&MO offers the largest selection
M&MO:
300+
different items All other suppliers combined: 100 items
MILLENNIAL grocery shoppers CHOOSE
27
%
Millennials
represent as large a proportion of the Canadian population as
ORGANIC MORE than any other
generation
CERTIFIED ORGANIC
It’s all we do
• Dedicated team operating 6 days a week
Baby Boomers
• Largest and widest variety of organic produce available
StatsCan 2015
• A 43,000 sq.-ft., certified-organic refrigerated facility
• Long-standing relationships with our growers • Responsible environmental policies practiced in our facility • Less than perfect food is delivered to Second Harvest
40
%
of retail organic sales are
fresh fruits & vegetables* mikeandmikesorganics.com * Statistics courtesy of the Canada Organic Trade Association (COTA). For more information, visit ota-canada.ca
THE SUNNY FRUIT® PROMISE Packing at the source assures our customers the highest quality and freshness in all of our products.
of fertile soils and unique climate creates the most one-of-a-kind, organic dried fruit on earth. After
Try our dried fruits today for
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A Taste of Sunshine in Every
dry our fruits to create the
Bite... It’s the Sunny Fruit® Promise. The Sunny Fruit® difference begins at the source, Izmir, Turkey, where the perfect marriage
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• Convenient • Portable • Individual portions always stay fresh • Packed at the source for highest quality and freshness
AVAILABLE IN PORTION PACKS OF 5 OR 20.
• 100% Organic • Gluten free • No added preservatives or artificial colors • No sugar added • Delicious & nutritious CONTACT:
Michael Marotta • mike@interfreshsales.com • (905) 338-2100 Yigit Isiker • yigit@safefoodcorp.com • (201) 865-7100 Safe Food Corporation, Edgewater, NJ • www.sunnyfru.it
ON TREND
PRODUCE-ING RESULTS WITH MEAL SOLUTIONS Maria Proulx Health Communications Specialist
By Maria Proulx
Millennials’ focus on health and wellness is not a passing fad; they have always placed an emphasis on fresh ingredients and freshly prepared foods. Acosta Sales & Marketing’s recent study, The Revolution in Grocery Shopping, highlights the importance of the produce department, in particular, to the shopper experience.
MEALS FOR MILLENNIALS Acosta reports that Millennials do the least amount of meal planning, with 68 per cent deciding just a few hours before mealtime. This may account for the rapid growth of restaurant delivery services. This group prefer to purchase healthy prepared foods but are also adventurous cooks. Fundamentally, they are looking for meal solutions, so why not send the day’s ready-to-eat options, plus recipe ideas, to your customers around 4 p.m.? Today’s meal can be takeout from your store, but tomorrow could be a delicious made-at-home stir-fry with interesting new veggies and sauces. And, oh yes, please send Millennials those meal options through a digital app. According to Acosta, 36 per cent of us would like the option of pre-ordering prepared foods that can then be picked up at the store – a service Starbucks is now offering.
grocerybusiness.ca
62
% OF SHOPPERS VISIT THE
89
PRODUCE AISLE WEEKLY
%
of shoppers rank fresh produce as a more important feature than competitive pricing and product selection in their grocery store experience
33
%
of shoppers report their perception of a store skews negatively if the store does not have a dedicated section for natural or organic options
50
%
of shoppers consider leaving a store if fresh produce and healthy options are not available September | October 2016
65
CE U D PRO
R O D VEN
R O S ADVI RS
PEA
SPONSORED BY:
Trade.USAPears.org
CANADIAN PEAR CONSUMERS(2)
PEARS FROM THE NORTHWEST USA
• AGE – 35; nearly 50% between 35-54
The United States is the third largest
• HOUSEHOLD – 37% with children
pear-producing country in the world, and
• INCOME – over 50% earn more than $70K
Washington and Oregon’s Pacific Northwest is the largest pear growing region with nearly 1,600 growers producing 57.1 percent of all fresh pears imported into Canada. (1) When local Canadian pears are out of season, USA Pears are available to satisfy pear lovers. Ask for more information about our 10 varieties.
Leading USA Pears varieties
ANJOU
BARTLETT
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• Care about eating fruits and vegetables • Interested in varieties and expanded uses
TRADE.USAPEARS .OR G • T HE BU SIN E SS OF PE A R S, TOOLS O F TH E TR AD E
SNACK ON PEARS
H
alf of all eating occasions are now snack driven.
According to a recent report,
Display conditioned pears
substitute a snack for break-
• Pear consumers want to eat pears in 1-2 days not in a week.(3) • Pear consumers want ‘sweetness’ and ‘flavour’ in their pears and only ripe pears deliver. • Increase sales by 19.5% with conditioned pears.(4)
fast or lunch.(1) Millennial are leading the way, and are more likely than any other demographic to snack the day. Pears are a very good source of fiber (26% RDI) and a good source of vitamin C
TIPS
1
45 percent of Canadians
multiple times throughout
MERCHANDISING
2
45%
of Canadians substitute a snack in place of meals.
Position pears at the front of the produce department.
(15% RDI) for only 133 calories per medium sized pear. Sweet and juicy with no fat,
• Over 1/2 of pear purchases are unplanned.(3)
no sodium, and no cholesterol, pears are a perfect choice for a snack as well as for any course of any meal of the day.
Visit USAPears.org for more pear facts and recipes.
• Consumers are interested in trying a fresh variety of pears. • Colour and shape form a naturally eye-catching pear-centric display. • Offering a second size or bagged pears will meet consumer demand and generate additional sales.
PEAR MARKETING AND MERCHANDISING TRAINING
Trade.USAPears.org • USA Pears University
online training program • 20 minutes to complete
and receive a free hat and certificate
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Carry multiple pear varieties throughout the season.
(1) Export Marketing Development Report: Pears in Canada, Jan. 2016. (2) Canada Nielsen, 2014 (3) Pear Usage and Attitude Study: Fusion Marketing, Nov. 2014 (4) Perishable Group Study, 2012
3 4
Display pears in secondary locations with items like yogurt, cheese, and bagged salads. • Time starved shoppers want meal ideas and insPEARation.
October 14–16, 2016 Orlando, Florida USA
freshsummit.com | #freshsummit
Schedule at-a-Glance
PRODUCE MARKETING ASSOCIATION, 2016
SCHEDULE AT-A-GLANCE
ORANGE COUNTY CONVENTION CENTER ORLANDO, FLORIDA OCTOBER 13-16, 2016
Thursday, October 13
Saturday, October 15
Sunday, October 16
12:30 p.m. – 5:00 p.m. Retail Produce Tour*
6:30 a.m. – 8:30 a.m. 5K Race for Talent*
7:45 a.m. – 9:45 a.m. Breakfast General Session
7:15 a.m. – 9:45 a.m. Floral Buyer Roundtables
8:00 a.m. – 5:00 p.m. Innovation@work
7:45 a.m. – 9:45 a.m. Breakfast General Session
10:00 a.m. – 5:00 p.m. Exposition
Friday, October 14 7:00 a.m. – 8:30 a.m. Women’s Fresh Perspectives Leadership Breakfast* 8:00 a.m. – 5:00 p.m. Innovation@work 8:45 a.m. – 10:15 a.m. Workshop Series I 10:30 a.m.–12:30 p.m. Brunch General Session 12:45 p.m. – 2:15 p.m. Workshop Series II 2:35 p.m. – 4:05 p.m. Workshop Series III 3:15 p.m. – 5:00 p.m. Emerging Leaders Program Capstone and Graduation 4:00 p.m. – 5:00 p.m. Fresh Ideas in Action Reception
8:00 a.m. – 5:00 p.m. Innovation@work 10:00 a.m. – 5:00 p.m. Exposition 5:15 p.m. – 6:15 p.m. New PMA Member Reception (Invitation Only) 5:15 p.m. – 7:00 p.m. Global Connections Reception 5:15 p.m. – 7:00 p.m. Industry Talent Reception (Supported by Center for Growing Talent by PMA)
Canadian Media Sponsor FOR THE FULL SCHEDULE, VISIT: PMA.COM/EVENTS/FRESHSUMMIT
5:15 p.m. – 7:00 p.m. Science & Technology Reception 5:15 p.m. – 7:30 p.m. Floral Networking Reception
5:00 p.m. – 6:30 p.m. Young Professionals Reception (Complimentary Ticket Required) 5:30 p.m. – 6:30 p.m. President’s Invitational Reception (Ticket Required) 6:30 p.m. – 8:30 p.m. Welcoming Reception*
grocerybusiness.ca
* Separate registration may be required.
September | October 2016
69
To squeeze the most out of citrus sales opportunities, contact Sunkist sales: sales@sunkistgrowers.com. Sunkist is a registered trademark of Sunkist Growers Inc., USA. Š2016
Ontario Produce Marketing Association
Celebrates 25 Years of Leadership
As the Ontario Produce Marketing Association (OPMA) marks its 25th anniversary, president Virginia Zimm outlines the many services the organization “brings to the table.”
Virginia Zimm, president, Ontario Produce Marketing Association
Q. What is the Ontario Produce Marketing Association? The Ontario Produce Marketing Association (OPMA) is a 25-year-old not-for-profit member-funded produce association that provides support to its members by assisting them in their produce business endeavours, with a view to achieving a collective goal: to increase produce consumption.
Q. What value do you offer your membership? We provide invaluable leadership and support to our membership (which includes the entire value chain, from seed to table), through in-house resources such as expert industry knowledge, produce business guidance, trade/business connections and cost-effective marketing tools to support their promotional and sales objectives. We are the conduit that connects every link in the value chain. We also collaborate with other agri-food and health organizations to reciprocate with complementary programs and services from which both memberships can benefit. OPMA’s primary role is to support our membership at a grassroots level, assisting with day-to-day industry business services such as: • Destination inspections • Quality assurance and grading seminars • Business education modules such as Value Chain Management • Produce culinary guidance for foodservice • A lunch-and-learn series to deliver Technology
Training, Consumer Research and Marketing 101 • Trade mission connections – inbound and outbound • Value-driven marketing programs The OPMA also hosts a golf tournament (the Canadian produce industry’s largest), an industry awards dinner and gala, a curling bonspiel and a family fun bowling event. At every event, there is a high attendance from the retail and foodservice sectors, making each one a great opportunity for suppliers to network and strengthen business relationships.
Awards Gala
Team Mastonardi at the OPMA golf tournament 2015 On the ice with Team Loblaw
Q. What are your core services? The OPMA has four areas of competence we deliver to our membership: Industry services: The OPMA offers quality-assurance training with our in-house CFIA trained expert, Jeff Honey, who has over 30 years experience in this area. Jeff also performs Destination Inspections, and this year, we have added new services, including Soil and Plant Health evaluation, Traceability and Food Safety seminars, Value Chain Management learning modules and others we will develop as the membership directs us.
This marketing and communications “Produce Made Simple” tool is offered exclusively to OPMA members to feature their brands/ products through this popular website and its social media assets, which reach out to thousands of their consumers daily. It’s a very powerful tool. I invite you to visit this robust education portal www.producemadesimple.ca.
Research and education: The OPMA will be conducting regular consumer research to guide our members with consumer behaviour insights as to the Who, What, Why, Where, When and How they buy produce. We’ll continually research “What’s New” in the produce world in both retail and foodservice, and will deliver that knowledge through a “Lunch & Learn” series. These sessions will also be directed by members to deliver information that is truly relevant to their business growth. Networking events: The OPMA prides itself on being a “tribe” of produce enthusiasts. People who work in the produce business eat, sleep, think and talk about the industry 24/7. It’s typically a familial industry (literally and figuratively), as its members are usually “lifers!” And although we work together more hours than Bay Street lawyers, we still enjoy getting together to play golf, congratulate each other at an awards gala, curl and bowl with family and friends. Our events offer opportunities for networking on a congenial level that is the historical nature of our business. Cost-effective marketing and communications programs: Produce Made Simple: The OPMA created a website four years ago, aptly named “Produce Made Simple,” after reaching out to the general public online about their produce needs. Our research told us consumers lacked the fundamental skills to use produce on a daily basis outside of some habitual behaviour – an apple here, a celery stalk there. As a result, Produce Made Simple was developed as a solution to a very real need – produce knowledge. The premise is to provide information about produce, such as how to identify, select, handle, store, prepare, enjoy out-of-hand or incorporate it in a recipe to create a higher level of produce literacy and enjoyment. Information is displayed in text, infographics and video to make knowledge transfer quick and memorable. Produce Made Simple also offers an opportunity for consumers to engage via several social media platforms like Facebook, Twitter and Instagram.
The “New Fast Food” campaign: OPMA also engages with students and patients to reveal produce as fast food. In his book Blink, Malcolm Gladwell talks about behavioural economics: basically, mental processes that work rapidly and automatically from relatively little information such as pictures. The posters OPMA created illustrate healthy produce choices versus typical fast-food choices to present the correlation of produce with fast food in the blink of an eye, the split second an image resonates with the public unconsciously. What could be faster than a handful of grapes or an apple? OPMA’s mandate is to increase the consumption of fresh fruits and vegetables, and that starts with education. OPMA believes it is important to equip consumers who make food choices every day for themselves and their families with the necessary information. It’s time to create a behavioural shift by suggesting fast food can be a healthy choice.
VISIT OUR “PRODUCE MADE SIMPLE” marketing and communications tools on social media: facebook.com/ProduceMadeSimple Instagram.com/producemadesimple Pinterest.com/producesimple @ProduceSimple youtube.com/user/ProduceMadeSimple
OPMA Testimonials BEN ALVIANO Mann’s Packing
SILVIA VALENCIA Best Produce
SUZANNE BERTOLAS Fruits from Chile
“The Produce Made Simple campaign is amazing, really. I use this program’s resources daily, and can’t say enough about how well it’s tailored to the industry. The myriad of options and insights available to members is second-to-none, and helps us provide usage education for our commodities to a wide consumer base. Thanks for this great tool!”
“The OPMA has been a valuable marketing partner for us in Canada. The Produce Made Simple TV campaign and digital marketing programs present information about avocado selection, storage, and ripening, as well as great recipe ideas to ensure Canadians enjoy avocados from Mexico at their very best every time! We know our sales in Canada have increased substantially over the last year as consumers become more aware of how to enjoy Mexican Avocados through OPMA’s marketing efforts.”
“Partnering with the OPMA gave Fruits from Chile the opportunity to reach the appropriate consumer and trade audiences for our products, helping our business grow in Canada. Their Produce Made Simple marketing tool allowed us to reach the consumer at a fraction of the cost compared to other marketing programs, and also provided analytics, reporting the overall results of the program in an organized and easy-to-use format. The entire team at OPMA, quite simply, Made it Simple.”
CHRIS YLI-LUOMA Oppy “As a marketer, the Produce Made Simple videos are a home run. Very visual, colourful and inspiring, and all geared to digital communications. Each short video gives shoppers the confidence to use SunGold kiwi or any featured item. Plus, for those who like print, key bullet points are posted. I recommend them often to my Oppy client. The OPMA team is terrific to work with, as they handle the process from start to finish, with my input when needed.”
FRANK SPAGNUOLO Loblaw Companies Limited “I’d like to congratulate the OPMA on their 25th Anniversary of providing excellent member services for the entire produce industry in Ontario. As a retailer, we have taken advantage of several services, including the networking events, which are always a big hit with our team! And the marketing support they provide our vendors through the Produce Made Simple campaign has helped increase produce sales. Thanks, OPMA!”
Mike Venton (Loblaw) accepting the Produce Person of the Year Award, 2015, from Kevin Silver (Loblaw).
CLAY TAYLOR Windmill Farms “Windmill Farms has been a member of the OPMA since 1998. For the past 18 years, Windmill Farms has provided financial sponsorship to the OPMA in support of the organisation’s objective to promote the consumption of fresh fruits and vegetables in Ontario. Membership in the OPMA has provided our company with the opportunity to network and build relationships that continue to drive growth and success within our business. Congratulations, OPMA, on 25 years of excellent service to the membership!”
CHRIS COCKLE Wonderful Sales “The Wonderful Sales, Wonderful Citrus, Wonderful Pistachios and Almonds and POM Wonderful organization have been active members of the OPMA for many years. We have enjoyed tremendous growth in our brands by leveraging our business connections made through the OPMA. We have seen valuable increased brand presence and exposure by taking advantage of the marketing opportunities that are available to us as members. Thanks, OPMA!”
FRANK DEFRANCESCO Provincial Fruit Co. Limited “The three-day OPMA Quality Assurance Seminar conducted by their in-house expert Jeff Honey is a very valuable and essential tool for Provincial Fruit. We train several new and tenured employees every year to make sure they are equipped with the right information to identify common defects on fresh produce as the loads come in every day.”
Chris Cockle (Wonderful Sales) accepting the Outstanding Achievement Award from Frank Spagnuolo (Loblaw).
25 Years of Membership Service chain and your consumers Become an OPMA member and discover our leadership and influence Network with retail buyers and foodservice companies
Virginia Zimm (416) 519-9390 ext. 234 virginia@theopma.ca
FL AVOU R
EXIT INTERVIEW
LESLEY McKEEVER SENIOR CONSULTANT, GS1 CANADA
After a two-decade career as a highly respected CPG senior executive, Lesley McKeever, a pioneering leader in many ways, recently retired from her position as senior vice-president, industry relations, at GS1 Canada, but will stay involved with the industry through her GS1 consulting work. Here, in conversation with Karen James, executive editor, Grocery Business, McKeever shares insights gained and lessons learned during her outstanding career.
What attracted you to the consumer packaged goods (CPG) industry? In truth, I fell into it by chance. However, after a few years, I knew it was the industry I wanted to be in. Not only was it a fast-paced environment that was on the forefront of innovation, but there were multiple career paths (sales, marketing, logistics, finance, etc.) that provided opportunities for learning and advancement. Did you have a coach or a mentor who supported your career development? I have been extremely lucky over the course of my career to have had numerous individuals, both personally and professionally, who have provided support and guidance. I truly believe a strong corporate mentor program helps build talent, drives retention, creates engagement and delivers strong leaders. Some key lessons I have learned along the way: • A leader is only as good as the team that supports her/him. • Mistakes are part of your growth; don’t be afraid to fail as long as you learn from it. • Motivate with positive enforcement and support. How do you personally define leadership? Leadership is a little like parenting. You want to nurture, coach and help them grow to be the best they can be. You help them realize their potential and motivate them to try their best. At the same time, you have to allow them to be independent and learn through trial and error. In order to inspire great results from your team, they have to see commitment and passion in you as a leader.
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At Kimberly-Clark, you were one of the few executive women in the industry. What were some of the challenges you faced? Early on, there were some people in the industry who didn’t take women in business seriously, and it was a constant battle to prove that you were capable, competent and could stand your ground. Some managers were afraid of putting a woman who had a family in a senior role. Back then, you were either a good mother or a good worker. It took a long time to prove you could be both. You were also a raising a family during this period – looking back, what advice would you give to working parents? • You need balance, and you have to plan for it. You need to designate family time with your kid(s) and focus on just them. Put away the iPhone, computer and other distractions, and play. It’s good for you too. • You need a team of people you can rely on to help you when those unexpected situations arise. It could be your spouse, family, friends or neighbours. The saying “it takes a village to raise a child” is very true, especially for working parents. • Being organized can make a huge difference. Order groceries online, fill up the gas tank on the weekend, review your upcoming week in advance of Monday. You’ve commented on the importance of building relationships in business – do you feel that is more difficult now? Back in the “old days,” the CPG companies and their customers (the retailers) would interact socially with customers/associates in order to connect on a personal level and build trust. Business decisions tended to be more localized and there was less head-office decision making.
grocerybusiness.ca
This allowed you to work with each of your customers to customize opportunities or build solutions based on their individual business needs. There are a number of things that make building relationships more difficult in today’s business environment: • Much of our business is done via email, which makes it more difficult to build relationships, build trust or understand body language during a discussion or negotiation. • With globalization, many business decisions are made outside of Canada. • A lot of the creativity has gone out of the sales discussion; it is often just about price. • Corporate downsizing has reduced head count, so remaining staff have more on their plate and less time to build relationships. In addition to your GS1 consulting work, are there other projects you plan to pursue? Yes, there are a number of charitable organizations and community service groups where we now live (Stratford, Ont.) that I would feel honoured to be part of. What advice would you give to young people who are looking to build a career in our industry? It is hard work, long hours, always changing and often frustrating, but if you want a career that will motivate, challenge, inspire and reward you, then you are in the right industry. On the retail side, we are embarking on a new era, so there are incredible opportunities to drive innovative new ideas, and deliver and execute in an environment of unprecedented change.
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JUNE 20 – 22, 2016 CHICAGO
Emily Murracas and Stephen Cowan with the new Tomato X from Mucci Farms
Stewart Lang, Chelan Fresh Marketing
Chris Cockle and Adam Lazo, The Wonderful Company
Chris Mastronardi and Paul Sabelli with Organic Produce from Double Diamond
Chris Veillon with the Tom Bar from Nature Fresh Farms
Jamie Nelson, Save-On-Foods Dana Kreis with the new multi-purpose grocery cart coming to Whole Foods, Toronto, Ontario
Derrick Rogers, Loblaws
Ben Alviano, Mann Packing Co.
Kevin Kane, Sobeys, with Brian Slagel and Julie DeWolf of Sunkist Growers, and Denise Kelly, Sobeys
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Mondelez sampling event at Food Marketing Institute (FMI) Connect, Chicago
Larry and Shelley McIntosh, Peak of the Market
Leona Neill with new Monarch Pearls from Red Sun Farms
Jamie Rutkowski, Fountain of Health
Pascal Rathe, E6 Essential N-ergy Drinks Canada
LIST IT
NEW & NOW DISCOVERIES
Cheerios goes gluten-free General Mills Canada has rolled out five varieties of gluten-free Cheerios cereals: Original Cheerios, Honey Nut Cheerios, Multi-Grain Cheerios, Apple Cinnamon Cheerios and Chocolate Cheerios. The oats used meet Health Canada’s requirements and standards for gluten-free products.
Cheerios.ca/GlutenFree
Dress up your holiday cheeseboard Introducing new Castello Decorated Cream Cheeses. Made from fresh ingredients, each cream cheese ring is hand-decorated for a truly creatively crafted cheese. Available in three varieties: Pineapple, Chives, and Sweet & Spicy Peppers.
Feel the Tickle! Castello Tickler Extra Mature Cheddar has been matured 18 months, giving it a rich taste with sweet, savoury and tangy notes. A Cheshire cheese culture is added to this traditional English cheddar, giving it a crumbly texture with fine crystals.
castellocheese.com
castellocheese.com
Thinner, crispier New Chips Ahoy! New Chips Ahoy! Thins is a thinner, crispier version of the popular cookie. Ultra-thin and full of flavour, these new chips are perfect for a “me-time” moment.
Chipsahoy.com
grocerybusiness.ca
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auroraimporting.com
Exciting New Product News from
Allessia Black Cherry Cantuccini: Black cherry is most recognized for its health benefits, but who knew it tasted so delicious in cantuccini? These Tuscanstyle cookies are great served with tea, coffee and dessert wine.
Aurora Ground Espresso Italian tradition meets modern technology. Aurora Espresso are now packaged in a compact cardboard carton, and locally roasted weekly. Available in medium and dark roast for stove-top and pump espresso machines.
Grisbi Famous shortbread treats made with an age-
old Italian tradition of combining careful workmanship with superior ingredients, Grisbi by Vicenzi combine a perfect shortbread cookie crumble filled with velvety cream.
Loacker Napolitaner Chocolate Hazelnut Wafer A hazelnut pleasure. The classic Loacker Napolitaner Wafer has no artificial colouring, preservatives or hydrated fats. It is made with three light, crispy wafers and two layers of the smoothest Napolitaner cream filling, combined with exquisite Italian hazelnuts to make this a best-selling wafer.
Loacker Cocoa and Milk Wafer When opposites are combined, completely new flavour combinations are created. The contrast between crispy dark cocoa wafers and a luxurious aromatic light milk cream filling is hard to resist. Made in the heart of the Italian Alps, these delicious wafers are made with the finest roasted Italian hazelnuts and real Bourbon vanilla pods, offering an original taste sensation.
Loacker White Coconut Gran Pasticceria Fine coconut cream and a glazing of delicious light white chocolate with a cascade of fresh coconut flakes create a light, delicious treat. Loacker uses only real, finely shredded coconut flakes to create an exotic, fresh taste.
Loacker Fondant Dark Noir Wafer Bittersweet pleasure covered with chocolate. These choco classics contain two layers of dark chocolate cream filling, and are covered with the finest dark chocolate. Together with three light, crispy wafers, this wafer is an unbeatable taste combination.
De Nigris 100% Natural Glaze This glaze is like no other. Aged balsamic vinegar made in Modena, Italy, but recognized around the world. De Nigris 100% Natural Glaze is made from the finest Italian slowly cooked grape must, that gives this glaze its rich, thick and robust flavour.
Baci “All natural� Baci are now All Natural! Made with only 8 ingredients, they are certified gluten-free, Kosher and sustainably made. The best part is that the iconic taste of Baci remains exactly the same.
auroraimporting.com
it figures
The Cost-Conscious Consumer
1/3
of consumers are eating dinner at home more often Takeaway Grocers have an opportunity to provide easy, convenient and winning meal solutions.
% 25
of consumers
are very concerned about the price of frozen food products 86
September | October 2016
Takeaway Frozen produce seems to appeal to consumers looking for cost-effective alternatives and substitutes, plus it saves on food waste.
73%
of consumers are spending less on groceries as a strategy to cut costs
Carman Allison is vice-president of consumer insights for Nielsen in Canada, and is responsible for creating thought leadership insights for CPG manufacturers and retailers.
A L L S TAT S C O U RT E S Y: NIELSEN
Takeaway When times are tough, consumers are more willing to make trade-offs at the grocery store. Avoid randomness when it comes to assortment and pricing, and ensure that you have a tight sales effectiveness process in place.
OUT OF STOCK?
45% of
consumers will postpone the purchase and 28% will buy it at another store Takeaway The majority of your customers are unlikely to buy a substitute, and could purchase the product elsewhere.
69%
of consumers would prefer the option of larger economy sizes (lower price/serving) if raw material costs for groceries were to rise substantially. Takeaway Secure consumer dollars by ensuring shelves are well stocked with larger sizes so consumers see your store as providing a solution to higher grocery costs.
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In Other Words
“ Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.” Doug McMillon, president and CEO, Wal-Mart Stores, Inc.
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Connect with us to bring Canada’s #1 Medjool date brand to your health-minded shoppers: marketing@bvdg.com
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