Sustainability— Hot trends in How Fresh City Farms the big shift the freezer aisle is sticking to its roots FEBRUARY 2022
Inside the minds of shoppers Our exclusive research reveals what they think about your store
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Contents
February 2022 || Volume 136 - Number 1
Opinions
Cover Story
INSIDE THE MINDS OF SHOPPERS
5 || Front Desk 17 || Shopper Sense People 7 || The Buzz
Comings and goings, store openings, awards, events, etc.
8
8 || Sheena Russell
How Made with Local’s founder is building a better snack company
21 Our exclusive research on how Canadians size up grocery shopping
Ideas 11 || Walmart aims to wow
The retailer is elevating the shopping experience at new concept store
13 || The M&M–Parkland deal How the $322-million sale came about and what’s next?
14 || Feeling squeezed
Features
How Canadians are coping with rising food prices
15 || Global grocery
36
News and ideas from the world of food retail
COVER ILLUSTRATION: KARA PYLE THIS PAGE FROM THE TOP: AARON MCKENZIE FRASER, TOBI ASMOUCHA, GETTY IMAGES/INENENNN
Aisles 43 || The Frozen explosion
Thanks to category innovation, convenience and affordability, frozen fare is hot stuff
49 || The endurance of cards
A desire for meaningful connections keeps greeting card sales going strong
51 || Hibiscus: Four things to know
51
Why this botanical is gaining fans
53 || New on shelf
Shining a spotlight on the latest products hitting shelves
Express Lane 54 || Feeding the future
With its indoor farming system, Infarm is on a mission to sustainably feed cities
Follow us on
THE BIG SUSTAINABILITY SHIFT 32 From tackling waste across the value chain to broadening their social impact, grocers are reinventing what it means to be green FRESH CITY FARMS 36 Paving the way for a fresh, sustainable future
@CanadianGrocer @CanadianGrocerMagazine Canadian Grocer Magazine
February 2022 || CANADIAN GROCER
3
Front desk
PUBLISHER
Vanessa Peters
vpeters@ensembleiq.com
EDITOR-IN-CHIEF
Shellee Fitzgerald
sfitzgerald@ensembleiq.com
ONLINE EDITOR
Kristin Laird
klaird@ensembleiq.com
ART DIRECTOR
Josephine Woertman
jwoertman@ensembleiq.com
DIRECTOR OF PRODUCTION
Michael Kimpton
mkimpton@ensembleiq.com
SENIOR VICE PRESIDENT, CANADA
Donna Kerry
dkerry@ensembleiq.com
VICE PRESIDENT, EVENTS
Megan Judkins
mjudkins@ensembleiq.com
SENIOR DIRECTOR AUDIENCE STRATEGY
TAKING THE PULSE OF SHOPPERS Our new study digs into what grocery shoppers think about your store
Lina Trunina
ltrunina@ensembleiq.com
SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS
Valerie White
vwhite@ensembleiq.com
SALES NATIONAL ACCOUNT MANAGER
Katherine Frederick
kfrederick@ensembleiq.com
ACCOUNT MANAGER
Karishma Rajani
krajani@ensembleiq.com
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CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, OPERATIONS Derek Estey EXECUTIVE VICE PRESIDENT, CONTENT Joe Territo
SHUTTERSTOCK/DRAZEN ZIGIC
MAIL PREFERENCES: From time to time other organizations may ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2021 by EnsembleIQ, may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, pro motional items and images) from time to time. Canadian Grocer, its affiliates and assignees may use, reproduce, publish, republish, distribute, store and archive such submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. ISSN# 0008-3704 PM 42940023 Canadian Grocer is Published by Stagnito Partners Canada Inc., 20 Eglinton Avenue West, Ste. 1800, Toronto, Ontario, M4R 1K8. Printed in Canada
Let’s face it, it’s been a rough few years. From COVID variants and lockdowns to supply chain headaches and record inflation, we’ve had a lot to contend with, and there’s still much uncertainty around how it will all play out. Against this backdrop, we wanted to catch up with Canadian shoppers and better understand what they really think about grocery shopping in these unusual times. We worked with the research team at EnsembleIQ (Canadian Grocer’s parent) to produce the second edition of the GroceryIQ Study: Taking Stock of Grocery Shopper Attitudes and Behaviours. So what did we learn from this year’s survey of more than 1,000 shoppers? We learned that compared to last year, more shoppers are visiting discount grocery stores; that a store with helpful/friendly employees has become more important to shoppers when deciding where to shop; and that 65% of shoppers would consider switching stores based on the retailer’s commitment to sustainability. Read all the study highlights in our special report starting on page 21. Also in this issue, writer Rebecca Harris explores how grocers are reinventing what it means to be green in “The Big Sustainability Shift” (page 32). What’s changing? Grocers, she finds, are making strategic, longer-term commitments around greening the supply chain and reducing waste and carbon emissions.
Finally, we’re excited to bring you the stories of two dynamic leaders making a difference in the industry. First, we meet Sheena Russell (page 8), the founder and CEO of Made with Local, a Nova Scotia- based, B Corp certified snack company that’s on a roll with its bars and granolas now available in 1,500 retailers. And we meet Ran Goel, (page 36) the founder and CEO of Toronto’s Fresh City Farms, an expanding operation that includes sustainable urban farms, an online grocery service and eight brick-and-mortar locations. For both Russell and Goel, supporting local producers is at the heart of what they do. We’re certain you’ll find their stories as compelling as we do. CG
Shellee Fitzgerald Editor-in-Chief
sfitzgerald@ensembleiq.com
Keep up to date on the latest news by signing up for our e-newsletter. It’s free and we’ll deliver it to your inbox four times a week. Visit canadiangrocer.com to subscribe February 2022 || CANADIAN GROCER
5
The Buzz
The latest news in the grocery biz COMINGS AND GOINGS
Save-On-Foods’ new store is in the mixeduse development of King George Hub in Surrey, B.C.
Karla Schlieper is the new president of Mondelēz Canada. Schlieper joined the snack company in 2013 and most recently led its business in Latin America’s Southern Cone region (Argentina, Uruguay and Paraguay). Schlieper succeeds Martin Parent who left the company in January.
OPENINGS
Surrey, B.C. has a new SAVE-ON-FOODS. The nearly 36,000-sq.-ft. store is located at 13630 George Junction and is part of the King George Hub mixed-use development. It replaces a former store that was located nearby. Save-On-Foods has opened 40 new stores in the past five years and this latest opening brings its store count to 186. MERCATO FRESH has revealed plans to open a new store in Windsor, Ont. A groundbreaking ceremony for the store, which will be located at 3235 Banwell Road, took place in late January. The first Mercato Fresh opened in Chatham, Ont. in 2020. T&T SUPERMARKET has announced that its first Quebec store will be in the Montreal borough of Saint-Laurent (at 300 Sainte-Croix Avenue), and will be located in a former Loblaws store. At more than 70,000-sq.-ft., CEO Tina Lee said the store “will not only be the biggest Asian supermarket in Montreal, it will be the biggest T&T Supermarket in all of Canada.” The store is slated to open near the end of the year. T&T currently operates 29 stores in British Columbia, Alberta and Ontario.
SAVE-ON-FOODS, T&T SUPERMARKET
T&T Supermarket’s planned Montreal store will be the largest in the chain’s network
Conagra Brands has a new head of marketing in Canada. Lynne Strickler stepped into the role at the end of January. Strickler joined the food company in 2017 and most recently was a leader on the U.S. retail grocery brand team. Adam Grogan has been named president of Greenleaf Foods, a plant-based food company owned by Maple Leaf. Grogan most recently served as Greenleaf’s CFO and prior to that he spent two decades in various roles at Maple Leaf. He succeeds Dan Curtin who has retired after more than 40 years in the industry. P&G Canada has announced some changes to its executive team. Shilpa Mukhi is the company’s new vicepresident - sales, Walmart team. Mukhi succeeds Rob Chambers who has taken on the U.S.-based role of vice-president – sales operations strategy, North America. Meanwhile, Alan Hanley has been promoted to vice-president – sales, Canada regional team, a position previously held by Mukhi.
Karla Schlieper
Lynne Strickler
Adam Grogan
Shilpa Mukhi
Alan Hanley
Kevin Hayes, who has been director of business development at United Grocers Inc. (UGI) for the last dozen years, has announced he is retiring. Hayes will be departing the organization at the end of May. Kevin Hayes
AWARDS/RECOGNITION
News to share? Tell us about your openings, comings and goings, etc. by dropping a line to sfitzgerald@ensembleiq.com
Time to nominate! We’re looking for the most outstanding women working in the grocery industry today for our 2022 Star Women in Grocery Awards. If you know an outstanding woman please take a moment to tell us about her at starwomen.ca. The deadline to nominate is March 25 and winners will be revealed in our June/July issue. February 2022 || CANADIAN GROCER
7
People
Who you need to know
LOVING LOCAL
Promoting regional food producers is a priority for Made with Local’s Sheena Russell By Carolyn Cooper Photography by Aaron McKenzie Fraser
S
heena Russell grew up on her family farm loving to bake, and had always considered herself close to the food scene in Atlantic Canada. So after starting a career with the City of Halifax, baking became a natural creative outlet, and with the help of a co-worker, a successful side hustle. “My friend and I kept each other accountable to take on this fun little side business of creating snacks that fuelled us,” recalls Russell, founder and CEO of Dartmouth, N.S.-based Made with Local Snack Foods. “We were busy young professionals. We went to the gym together a lot, and we both really loved good food. But in 2012 it was really hard to find nutritious portable foods that actually tasted good. So we just knew we could do better.” Committed to supporting local suppliers, the entrepreneurs worked after hours at a friend’s café baking and packaging their Real Food Bars to sell on weekends at Halifax farmers markets. Their first goal was that the snacks had to taste delicious. “We knew we could achieve that by committing to partnering with local farmers and food producers as a deeper value proposition,” says Russell. “The thing that felt very near and dear to my heart was to partner with suppliers that we really had a strong connection to.” They quickly built a customer base for the bars, and were soon selling at coffee shops and independent retailers. There was so much demand that after having her first daughter, Russell decided to quit her day job. “I knew at that point we were going to need some support to make these bars and get them out into the world. And that was what led me to The Flower Cart Group,” she explains. “They have a small co-packing kitchen, and their intention is to create safe and dignified work for adults experiencing barriers to the mainstream workforce.” When the organization reached out to Russell, she says it was a huge “a-ha” moment. “I was thinking, we’ve got this opportunity to not only create these nourishing snacks with local ingredients and impact local farmers and food producers, but now the way that they’re being manufactured has a social impact component to it. It’s an innovative model that has a traceable, quantifiable impact on the community.” Being able to measure that impact is what led the company to obtain B
30 seconds with … Corporation status. “We have our own tools to measure by, but B Corp certification is the Holy Grail of sustainability, ethics and governance certification,” explains Russell. “There are lots of different food certifications out there for food companies, but it was the one that felt the most crucial to us, and aligned most firmly with the values of the company.” Since starting to work with Flower Cart in 2014, Russell says the business has grown tenfold. Today, Made with Local products are found in more than 1,500 retailers across Canada, including all major grocers. The company’s main product line continues to be its 53-gram Real Food Bars, available in six SKUs plus seasonal varieties. Top sellers include Chocolate Mint Chip, Peanut Butter Blondie, and Coconut in the Dark. Packed with nutrition and flavour, the bars are made with organic Canadian ingredients such as honey, nut butters, cranberries, blueberries, hemp seeds and molasses, as well as fair-trade spices and chocolate. Also popular is the company’s 300gram Granola Bar Mix, which can be baked into bars, muffins or cakes. “Our key demographic is millennial women, many of whom are now moms, and they’re looking for easy lunch box options,” says Russell. “Because of our unique manufacturing model, it was challenging to figure out how to do nut-free, because our priority is focusing on the social enterprise bakery partnerships. But we decided we could create a different kind of product that would enable folks to have a nut-free, DIY format.” A one-kilogram version of the mix launched in Costco outlets in Eastern Canada in 2021. Russell says the company will launch both new innovations and U.S. distribution within the next 18 to 24 months. As well as plant-based proteins, “we are playing with functional ingredients,” she says, noting that in the past they “intentionally stayed away from ingredients that historically have a very poor track record of how they are cultivated and sourced in other parts of the world.” However, she says, “there are lots of incredible Canadian-grown superfoods that are becoming more widely accepted and sought after by health-conscious consumers, so that’s something we’re looking into. We’re having a lot of fun in the kitchen right now.” CG
SHEENA RUSSELL What’s your vision for Made with Local?
To reinvent how people think about food manufacturing and food impact. Every single decision that every CPG founder makes has positive or negative impacts on the community and the world around them. This is kind of a cliché, but business is something that can be a force for good in the world, and that’s something we live and die by here. So we want to inspire other brands to be conscious, and other leaders to be conscious about how they build their companies. We do have hard business goals, of course, but at the forefront of that is always going to be simple, nourishing foods that have a deep impact.
What do you like most about your job?
I just love it; every single day is different. I never consciously planned to be an entrepreneur, but I found myself in this position where I had this little company, and I realized how fun it is putting out different fires every day, meeting new people and learning new things.
What’s the biggest reward of working in the food industry? Creating foods that people use to nourish their busy lives and are emotionally attached to is an incredibly privileged position to be in.
What’s your favourite food?
We get a local veggie delivery and I have a monthly local meat subscription, so I like throwing together simple, nourishing dishes with whatever’s in season, when possible.
February 2022 || CANADIAN GROCER
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Ideas
RETAILERS || SUPPLIERS || SHOPPERS || INSIGHTS
In Walmart’s new concept store in Arkansas, digital screens greet customers
STORE INNOVATION
WALMART
WALMART AIMS TO WOW “Wow” might not be the first word that comes to mind when shoppers think about their Walmart experience, but the retailer is working to change that. Walmart has unveiled a new design and customer experience at its incubator store in Springdale, Ark.,—a concept it dubs “time well spent.” The idea is to make Walmart a shopping destination where customers feel wowed and want to spend their time. The new design follows the first phase of Walmart’s store redesign, which focused on making shopping simpler, faster and more convenient. In this latest phase, Walmart says it’s “amplifying the physical, human and digital design elements in our stores to inspire customers and elevate the experience.” The store uses large displays to pull customers into various departments. After two years of living with “touchless” retail, consumers are encouraged to “touch, feel and become a part of the space,” according to Walmart. For example, the home area might feature a living room set up where the customer can squeeze a throw pillow before deciding on a purchase.
Walmart has also given floor space to brand partners like GapHome, Queer Eye and Reebok, providing store-within-astore experiences. The beauty department will also showcase brand partner shops featuring new items and men’s grooming tools that can be “seen and experienced.” On the digital front, Walmart is using QR codes and digital screens to communicate with shoppers about products and services, and provide offers. For example, in the pets department, a customer can scan a QR code to find dog bed options, learn about Walmart’s pet insurance service, or have a 20-pound bag of kibble delivered to their door. In a corporate news blog, Alvin Washington, Walmart’s vice-president of marketing—store design, innovation and experience, said early results show customers are, indeed, wowed by the redesign. “We’ll continue to test, learn and make changes based on what our customers tell us,” he said. “As we do that, we’ll quickly adjust and deliver an even better, more engaging experience in 2022 and beyond.”—Rebecca Harris
February 2022 || CANADIAN GROCER
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Q&A
Behind the M&M –Parkland deal How the $322-million deal came about and what’s next for the food brand By Chris Powell
Andy O’Brien CEO of M&M Food Market
CALGARY-BASED gas station and convenience store operator Parkland Corporation is significantly beefing up the food side of its business, with a $322-million deal for M&M Food Market. The deal marks the beginning of a “bold new chapter” for M&M, says president Andy O’Brien. It follows a successful rebranding and transformation of the company’s 300 stores, 2,000 M&M Express locations and nearly 500 specialty products under current owner, Searchlight Capital Partners. Canadian Grocer spoke with O’Brien and Ian White, Parkland’s senior vice-president of strategic marketing and innovation, about how the deal came about, why it makes strategic sense, and what’s next for the new partners (the interview has been edited for length and clarity).
Why and how did this deal come together?
M&M FOOD MARKET, PARKLAND
Ian White Senior VP of strategic marketing & innovation at Parkland
O’BRIEN: We’d gotten to about seven years with our current capital partners Searchlight, who’ve been amazing partners all the way through. Part of my role is to let them know when I think it’s time for them to exit and monetize their investment. At the same time, we had transformed every aspect of this business, and we’re poised for explosive growth. From my perspective, I really wanted a fresh partner that would see that and have a longer horizon than the current capital company, which tends to be five to eight years. We started the process last January…and started talking to various companies in March, April and May; [we] got it down to 15 to 20 high-potential companies, and funnily enough, Parkland was not on that list. Ian and I have a mutual colleague who suggested we talk about working closer together. When Ian shared his vision for where Parkland was going with food, I said ‘Wow, that’s pretty exciting. Would you guys ever actually consider acquiring M&M?’ I don’t think Ian knew we were on the market, because our investment bankers had not contacted their people. I told Ian ‘We’re six months into this process and it’s coming to an end, can you guys move fast?’ Everybody knows Parkland’s very good at acquisitions, and they went very quickly. As we went through the fall, I got to learn a lot more about
Ideas Parkland and their intentions, and they learned about M&M, and it just made so much sense for both companies to come together.
Why does this acquisition make sense for Parkland?
WHITE: We already had a successful partnership with M&M through the Express program [Parkland’s On the Run banner currently hosts more than 100 M&M Express locations]; we had seen the customer reaction to that and we’ve seen our productivity improve at the 100-plus sites we’ve got today. We’d seen an improvement in average basket size, and we really liked the brand and what we saw from Andy and the team.
How well suited do you think this brand is to travel?
WHITE: Well it’s frozen, so it can travel a long way! All kidding aside, I think irrespective of the geography, we want to create convenience destinations, [and] we want to create stronger connections to consumers. We are going to focus on...Canada to get it right, so that when we’re ready to move into new geographies for the M&M brand, we’ve had a chance to test some concepts to ensure we’re successful.
Is there a timetable for an international move?
WHITE: I think there’s a significant opportunity in Canada, so I’d say we’re 18 to 24 months away. O’BRIEN: I think that’s probably the right timeframe. We have significant opportunities to grow in Canada with our existing stores, with new stores, and new [markets], which is definitely our primary focus. With that said, we conducted some massive research of our brand and concept in the U.S., to see whether there was space for M&M in that marketplace, and the results were outstanding. Now it’s a matter of [determining] what is the right time to go in there, and sequencing those events to make sure we don’t take our eye off the ball here in Canada.
M&M had undergone an extensive transformation process prior to this. Is that why you felt the time was right for this deal?
O’BRIEN: Yes and no. When [Searchlight] acquired the company back in 2014, we knew we had to transform every aspect of this business and that’s what we did—from remodelling the stores to evolving the product portfolio, to launching new loyalty programs. [It got] to the point where, in 2020, it was a completely different brand: Way better, way more relevant, and every year we were growing and thriving. The reason I thought it was the right time to put it on the market was because we’re now in a position where I believe we are poised for significant growth— in Canada and internationally. There is no brand like M&M in North America; no other CPG company has a brand with over 450 branded products in 10 different categories. It’s a very unique brand. We have a great brand that we’re ready to grow significantly, and I was looking for a partner that saw the same thing.
February 2022 || CANADIAN GROCER
13
Ideas
Feeling squeezed
The meat category was the hardest hit, with more than four in five Canadians noticing the change (83.3%), followed by vegetables (71.7%) and fruits (71.5%). Canadians’ perceptions of dairy price increases had the highest jump: from 47.4% in Sept. 2021 to 56.4% in January 2022. How are Canadians coping? They’re becoming more frugal at the grocery store, said Charlebois. “They’ll be looking for deals, they’ll be trading down, and they may change their buying patterns from one CANADIANS AREN’T feeling the pinch of rising [department] to another,” he said. As an example, inflation and food prices: it’s more like a body slam. Charlebois suspects more shoppers will switch to That’s according to Ransom Hawley, CEO at Caddle, frozen fruits and vegetables from fresh, in light of commenting on rising food prices on a recent webi- ongoing supply chain challenges. nar with Sylvain Charlebois, senior director, AgriThe survey also found one in five Canadians will Food Analytics Lab at Dalhousie University. change where they shop because of high costs. More Becel_TFT_FY22_CDNGrocer_AD_QrtrPG_M.indd The discussion was based on two waves of than half (51.1%) have reduced meat purchases in the Fonts: None Trim: 3.563" x 5" Images: UPF_CND_4546348_SM_Becel_ research conducted by Caddle in Sept. 2021 and Jan. past six months due to higher prices. Among other NGroBleed: None TFT_FY22_CDNGrocer_AD_QrtrPG_2_15.tif 2022. More than 10,000 Canadians were surveyed (CMYK; money-saving Live: 3.313" x 4.75" 300 ppi; 100%)options: 73.3% of Canadians follow a Add’l Specs: None on their attitudes and perceptions regarding food budget and 68.4% use phone apps to check prices. inflation. Not surprisingly, 89% of Canadians believe Consumers are also trying to save money by using Mech Scale: 1" = 1" food prices are higher than six months ago. Hawley flyers (39.3%) and coupons (33.3%), as well as buying Inks: Cyan, Magenta, Yellow, a “perfect storm of issues,” from high said there’s private label products (30.2%) and discounted “enjoy Black inflation (4.8%) to soaring housing prices to sup- tonight” items (18.8%). “Across the board, the tools ply chain issues. “It’s quite alarming [but] there are Canadians are using are increasing,” said Hawley. opportunities retailers and brands to help “So, they’re using their Swiss Army knife of ways Creative: Jeff Kulinski Account: Jacqui Land for grocery PM: Tami Gomez Canadians, they can save.”—Rebecca Harris B:3.563" and it’s good for business.”
Grocery shoppers are pulling out their “Swiss Army knife of ways they can save” to cope with rising food prices
T:3.563" S:3.313"
2022 A Canadian Tradition Since 1951
B:5"
T:5"
S:4.75"
GrimmsFineFoods.com
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LIST AND GO
GLOBAL GROCERY
U.K. retailer M&S is trialling an augmented reality (AR) shopping app at its Westfield White City store that aims to make grocery shopping easier. Called “List and Go,” the app (touted as the first of its kind in the U.K.) offers easy-to-follow, real-time navigation so shoppers can see the exact location of each item on their shopping list and be guided to it. “Over the last 18 months we’ve seen an increased customer use of digital, interactive shopping— whether that’s payment methods or QR code-based solutions in-store, says M&S group property, store development and IT director Sacha Berendji on the launch of List and Go. “During this time we’ve launched a wave of new initiatives to make shopping at M&S quicker and easier for customers.”
News and ideas from the world of food retail
Ideas A world record display of citrus
Louisiana-based Rouses Markets and Sunkist Growers recently earned a Guinness World Records title for the largest display of citrus fruits. The impressive display, at a store in Metairie, La., boasted more than 100,000 pieces of fruit and took a team of produce merchandisers eight hours to create.
BYE BYE TO “USE BY” DATES
Aldi Shop&Go
M&S, MORRISONS, ALDI UK, SHUTTERSTOCK, ROUSES MARKETS
Aldi U.K. is adding to the growing number of checkoutfree stores with the launch of Shop&Go in London. After testing the concept with team members in recent months, the “trial store” is now open to the public. Similar to other checkout-free stores, customers use an app to enter the store, pick up items, which they will be automatically charged for once leaving the store via their selected payment method in the app. Aldi says customers wanting to buy alcohol or other age-restricted products will be also be able to use facial age-estimation technology built into the Shop&Go app to confirm their age and authorize the purchase.
To curb food waste, Morrisons is scrapping “use-by” dates on its own brand milk and will switch to “best before” dates only, making it the first U.K. grocer to do so. Morrisons says research shows fresh milk can safely be consumed a number of days past its “use-by” date and that its new strategy will help prevent millions of pints of the beverage from being tossed each year. Incidentally, milk is the third-most wasted food and drink product in the U.K. (after potatoes and bread).
Making shopping easier for the visually impaired
Asda has teamed up with indoor mapping firm GoodMaps to test new technology that will make it easier for blind and partially-sighted customers to navigate the store. Asda says its Stevenage location will be the first supermarket in the U.K. to be integrated in the GoodMaps smartphone app, which is specifically designed for use by the visually impaired. According to Asda, the app can pinpoint the user’s location to within a metre of accuracy and then communicate directions to the object or area via audio, enlarged visual and touch commands. Shoppers using the app can search for key landmarks within the store as well as specific products. CG February 2022 || CANADIAN GROCER
15
WHAT’S
NEW NEW PRODUCTS IN GROCERY
What’s your design style? Graphic City Chic? Mod Botanical? Tailored Lines? The new collaboration between Scotties – Canada’s #1 facial tissue – and House & Home – Canada’s premiere design, decorating and lifestyle brand – offers beautiful tissue boxes sure to satisfy the inner designer in everyone. Inspired by today’s top decorating trends, the Scotties House & Home Designer Series collaboration has eight great patterns hitting shelves this winter, so Canadians can decorate with Scotties in every room.
Show Some Love New from Dove, Body Love Body Wash is a line of serum-infused body cleansers that brings premium face care ingredients like hyaluronic acid to the shower. With plant-based cleansers and 10x moisture boost serum, Canadians can enjoy noticeably softer and healthier skin. What’s not to love?
Tip Top Toppings The irresistible taste of pizzeria-style pizza can now be enjoyed at home with Piller’s Toppings Cup & CharTM Pepperoni. Naturally wood smoked and semi-dry cured, this new pepperoni is deliciously crafted to cup to perfection, with charred, crispy edges. Available now, add this new item to your pizza toppings assortment and help your customers make their next pizza night one they’ll savour!
SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER
|| February 2022
SHOPPER SENSE || Hanif Mohamed
• Altruistic: Improving the world around me by advocating for environmental, ethical, humanitarian and/or philanthropic causes.
Health in the spotlight
Expect protective health and wellness priorities to shape 2022 consumption habits
Given the dramatic, pandemicrelated boost in online shopping, individual health needs and concerns have been having a greater impact on shoppers’ purchase decisions versus brand loyalty
After nearly two years of living amidst a pandemic and its associated living and working restrictions, consumer preferences, priorities and behaviours have drastically shifted to align with their new habits, budgets and health and wellness needs. In contrast to the whirlwind nature of COVID-19, consumers are being very strategic with their consumption choices. These consumers are seeking out experiences that offer personalization, convenience, and products that promote specific health benefits and/or ingredients. And 52% of Canadians are planning to increase their efforts towards living a longer, healthier life. It all starts with understanding the baseline state of total health and wellness as it stands today. Despite mass vaccination efforts across countries, the world is still faced with a rapidly-spreading pandemic, with millions still being infected and impacted by COVID-19. However, the virus is just one force driving change in the global health and wellness landscape. In Q4 2021, NielsenIQ identified a five-pillared hierarchy of health and wellness needs in its Global Health and Wellness report, those being: • Protective: Protecting myself and/or my family members from immediate health threats. • Preservation: Improving my and/or my family’s current physical or emotional wellbeing and connections. • Aspirational: Proactive actions to achieve and maintain specific health goals, or helping to avoid ailments in the long term. • Evolving: Seeking out the latest alternatives or developments to continuously meet my and/or my family’s health and wellness goals.
When looking at how Canadian consumers ranked these needs in terms of importance, protective needs were rated highest, by far, with 71% of Canadians prioritizing protective health actions and needs versus 63% of global consumers. Since Canadians are highly concerned with protecting themselves and their families from immediate health threats, it’s important for retailers to address these concerns through enhancements to their in-store and online shopping experiences, and for manufacturers to clearly educate health and wellness benefits and ingredients on product packages and through online attribute data. Given the dramatic, pandemic-related boost in online shopping, individual health needs and concerns have been having a greater impact on shoppers’ purchase decisions versus brand loyalty. An example of this shift in behaviour: 81% of grocery searches on Amazon.com are unbranded, and we expect this to accelerate. Shoppers are not only concerned with pandemic- related threats, but also factors such as allergies, intolerances, specific eating regimens/diets, and corporate sustainability efforts, and are seeking products that fit their priorities. To tap into the large segment of consumers focused on protective needs, it’s crucial for manufacturers to provide shoppers with thorough product attribute information online as well as on product packages and labels. As shoppers visit brick-and-mortar stores with their omni-altered mindsets, they’re expecting a similar experience in terms of convenience and broader assortments. Both online and offline retailers need to ensure they’re offering diverse product assortments grouped by benefit (i.e. low-calorie, keto-friendly, cruelty-free) to capture the growing segment of attribute-first consumers. For brickand-mortar retailers, it’s no secret that attracting shoppers has been a challenge due to COVID-19 concerns, so promoting a safe, sanitary and frictionless in-store experience will be key to capturing dollars as we combat rising infection rates. In addition, online and offline retailers should continue to focus on delivering positive and seamless omnichannel experiences that encourage shoppers to make repeat purchases. Lastly, expanding omni capabilities should be a top priority as click-and-collect and delivery gain further traction while consumers look to cut down time spent in-store shopping. CG
Hanif Mohamed is senior vice-president, Canada retail for NielsenIQ.
February 2022 || CANADIAN GROCER
17
ts s i tw w e n Two an on
y a d y r eve classic
DEMPSTER’S
C
Whether you like your bread with butter or with honey, you’ll love the two new flavours from Nature+. With the baked-in taste of either real butter or real honey,* Nature+ Butter and Nature+ Honey Wheat are the great new way to add a twist to breakfast, lunch and even snacks. ALWAYS BAKED WITH
NO ARTIFICIAL FLAVOURS OR COLOURS
*M
CATEGORY CLOSE-UP
A
bread
beloved staple, bread is on everyone’s weekly grocery shopping list. However, Canadians’ needs and tastes are evolving, so grocery retailers have to keep up with the latest trends. Here’s a look at what’s heating up in the bread category: Growing appetite for all natural: Across many food categories, consumers are looking for products with natural ingredients—and pantry bread is no exception. In fact, “no artificial flavours and colours” are among the top purchase drivers of pantry bread consumers, according to Bimbo Canada’s latest category research. In addition, claims that reinforce trust in the product, such as “simple ingredients” and “non-artificial,” are seen as most important to consumers and will likely encourage trial. Post-pandemic bread fatigue: During the pandemic, many Canadians became home bakers, and baking bread was one of their favourite activities. Now, the stay-at-home bakeoff is waning and many consumers are returning to the convenience of pantry bread. Recent data from Nielsen suggests an element of post-pandemic “bread fatigue,” which makes it critical for the category to showcase its potential to bring excitement back to the classic family favourites. Making more meals at home: From homeschooling and working from home, to ‘staycations’ and at-home entertaining, Canadians continue to spend a lot of time at home. When it comes to mealtimes, Canadians are trying new recipes and using basics to find quick and easy meal solutions. As consumers’ eating habits continue to evolve, the relevancy and motivation for at-home preparation and consumption of bread will be critical.
Product Spotlight Dempster’s is bringing excitement to the bread category with two new Nature+ Breads: Dempster’s® Nature+ Honey Wheat Bread is baked with a touch of real honey and wheat bran. Dempster’s® Nature+ Butter Bread is a slight twist to the family favourite of classic white bread with a light touch of real butter. Dempster’s® Nature+ Breads bring a delicious twist on the everyday classic and can be enjoyed in many fun, creative ways for the entire family to enjoy— whether it’s breakfast, lunch or even snacks. As always, Dempster’s® Nature+ is baked with no artificial colours or flavours, and is baked in Canada.
SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER
|| February 2022
Shopper research
Our exclusive research on how Canadians size up grocery shopping By Shellee Fitzgerald Illustrations by Kara Pyle
Inside the minds of shoppers February 2022 || CANADIAN GROCER
21
Shopper research in these fast-changing times, getting a handle on shoppers is no easy feat, but we’re
determined to try. Once again, we’ve teamed up with the research team at EnsembleIQ (Canadian Grocer’s parent) to bring you the 2022 Grocery IQ Study: Taking Stock of Grocery Shopping Attitudes and Behaviours. In this, our second-annual study, we surveyed more than 1,000 shoppers across Canada to better understand their preferences and habits. We asked shoppers about everything from loyalty programs and local products to satisfaction with online grocery services and even if they think the store is fun to shop. Here’s what we learned: At the store
WHERE THEY SHOP Three-in-four (77%) shop the same grocery store each time, but of the shoppers who do not, a majority are shopping across 3+ stores.
# of grocery stores regularly shopped (those who do not shop the same store each time) 4+ stores
26%
2 stores
21%
(34%)
3 stores
53%
Overall, fewer shoppers are shopping at more than three stores compared to the prior year.
75% of shoppers
shop the same grocery store each time
Significant increase / decrease vs. previous year at 95% confidence level Values in brackets reflect previous year figures
HOW THEY DECIDE WHERE TO SHOP Most important factors to grocery shoppers when determining where to shop Product pricing Product freshness Products needed in-stock Product quality Convenient location Sales and promotions Variety of products Store cleanliness Rewards/loyalty program Helpful/friendly employees Speed of shopping trip Brands offered Sanitation/safety measures enforced Store organization Large selection of local products
82% 75% 74% 73% 73% 71% 68% 65% 52% 46% 44% 43% 42% 42% 41%
(40%)
(47%)
Significant increase / decrease vs. previous year at 95% confidence level Values in brackets reflect previous year figures
22 CANADIAN GROCER
|| February 2022
With consumers continuing to feel squeezed financially and with consumer confidence dipping, it’s no surprise that discount supermarkets have become more popular with Canada’s grocery shoppers over the past year. According to the latest edition of the study, 40% of survey respondents said they shop at a discount supermarket at least once a week, up from 37% last year. Dollar stores also experienced a significant uptick with 24% claiming to shop for groceries at these types of stores each week, up from 20% last year. Meanwhile, 63% of respondents said they shop at chain grocery stores and 19% at independent grocery stores at least once a week. Similar to last year’s findings, three-in-four shoppers (75%) head to the same grocery store for each shop; among those that do not, the majority (53%) are shopping across three different stores. When determining where to shop, price continues to top the list of important factors for the bulk (82%) of shoppers surveyed. Other top considerations are product freshness (75%), and that the products needed are in stock (74%). Notably, helpful/friendly employees played a bigger role in store selection with 46% of shoppers indicating it as an important factor, up from 40% last year. Grocers seemed to have upped their game when it comes to store appearance, achieving significantly higher scores on cleanliness and organization from shoppers, compared to last year. Less than half (42%), however, consider their primary grocery store “fun to shop.” And while 16% of shoppers say their grocery store
Shopper research needs no improvement, most shoppers surveyed did think grocers could improve a few things, especially out-of-stocks, high prices, product selection and having enough checkout lanes open.
Sizing up loyalty programs
Loyalty programs have long been a tool used by retailers to keep shoppers coming back to the store, but what do shoppers think of them, really? Well, it seems they’re pretty popular. According to the study, 78% of shoppers said they were aware that their preferred grocery store had a loyalty program with 69% of these shoppers actively participating it. More good news is that the majority (63%) of participants are “extremely or very satisfied” with the loyalty program experience and 31% are somewhat satisfied. While about half (49%) of active participants have used a grocery store’s loyalty program mobile app, a sizable segment (26%) have not. And with one in five (21%) shoppers indicating they are uncertain if the store even has a loyalty mobile app, a strategy to boost awareness should be considered. For those who said they would not enroll in a loyalty program the top reasons given
LOYALTY PROGRAMS
HOW GROCERY STORES ARE PERFORMING Grocery stores are performing better in terms of appearance with higher scores in cleanliness and organization compared to last year. Store cleanliness
70%
(63%)
* Store organization
66%
(59%)
Variety of products
63%
Speed of shopping trip
60%
Employee friendliness
59%
Loyalty/rewards program
59%
Employee helpfulness
57%
Quality of prepared food
56%
33%
11%
Price of products
55%
33%
12%
Fun to shop
42%
8%
29%
12%
26% 27%
(51%)
(9%)
15% 16%
(31%)
38%
Excellent/Very good Good Fair/Poor
20%
* Totals made end up being 99% or 101% due to rounding
DEFINING CONVENIENCE When asked to define what “convenience” means in the grocery shopping context, location and ease of shopping are mentioned most frequently. Easy access/nearby Easier/comfortable experience Fast shopping experience/time saver Good/constant product variety/selection Good price/value All-in-one Products in-stock Longer store hours
6%
38% 23% 22% 15%
7% 7% 6% 6%
In their own words “Convenience means that the grocery store is in or close to my neighborhood and carries the products that I habitually purchase.”
63%
31%
32%
(54%)
7% 7%
Significant increase / decrease vs. previous year at 95% confidence level
Not very/not at all satisfied
Somewhat satisfied
(32%)
30%
Values in brackets reflect previous year figures
Of the 69% of shoppers enrolled and actively using a loyalty program, here’s how they feel about it:
Extremely/ very satisfied
24% (29%) 7% 28%
Loyalty Program Holdouts Reasons why shoppers say they would not enroll in a grocer’s loyalty program: 32% Requires too many purchases to earn rewards 25% Rewards/points/discounts aren't valuable to me 24% Belong to too many loyalty programs 18% Enrollment process takes too long
“It means a onestop shop that has all the basics you need without going to a big store.”
“Convenience means ‘for ease’. That can be in terms of finding easy-tocook or bake meals. Or it could be all the junk food that is readily available. But it could also mean that I can find a product in a certain aisle easily.”
14% Asks for too much information 7% Belonged to similar programs and didn't like it 6% Cost associated with joining
February 2022 || CANADIAN GROCER
23
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Shopper research were “requires too many purchases to earn rewards,” “rewards/points/discounts aren’t valuable to me,” and “belong to too many loyalty programs.” The survey also revealed that store flyers continue to be popular with 84% of shoppers indicating they use either a print or digital flyer, with most looking at them before heading to the store. Interestingly, the study revealed a significant increase in shoppers using print flyers prior to their shopping trip (42% versus 35% last year).
in-store, up slightly from last year. Among the online methods used to procure groceries (over the past month) were: curbside pickup (4%); contactless delivery (3%); in-person delivery (3%); and buy online for in-store pickup (2%). Compared to last year, more shoppers reported being “completely or very satisfied” with their online grocery shopping experience (55% versus just 43% last year). But for shoppers who were not happy with their online experience, their top peeves remain the same as last year: 42% said the products they needed were out-of-stock, 33% reported the fees for the service were too steep, while 24% were unhappy with the product substitutions that were made. Also worth noting is that more shoppers (23%) said they received incorrect orders this year (up from 15% last year), possibly a result of supply chain and labour issues.
In-store & online
Despite all of the buzz and investment around e-commerce, the physical store rules. When asked about their grocery shopping habits over the past month, 97% of those surveyed said they shopped in-store at some point and an average of 87% of grocery store trips were completed
IN-STORE AND ONLINE SHOPPING
More online grocery shoppers were “completely or very satisfied” with the experience versus a year ago. For those who were not, out-of-stocks and fees named as top reasons.
9%
Not very/ not at all satisfied
55%
Completely/ very satisfied (43%)
Reasons why not completely satisfied with online shopping
36%
Somewhat satisfied
Significant increase / decrease vs. previous year at 95% confidence level Values in brackets reflect previous year figures
Product(s) I needed were out-of-stock Fees are too expensive Unhappy with product substitutions Order was picked incorrectly Unhappy with quality of products Store does not offer delivery Process is too complicated Pickup/delivery window too far out Store does not offer curbside pickup
42% 33% 24% 23% 21% 14% 14% 13% 8%
(15%)
When asked how they’ll shop in a post-pandemic world, most shoppers said they expect to shop for groceries in-store at a similar level as today, with 19% expecting to increase their time in stores. More than half of shoppers said they do not expect to rely on alternative order and pickup methods. More
6%
1%
74%
Shopping in-store
About same
6% 19%
Less
6% 28%
59%
Will not shop this way
7%
Buy online for contactless delivery
6% 28%
58%
Buy online for in-store pickup
8%
6% 27%
29%
58%
7%
Buy online for in-person delivery
59%
8%
Buy online for curbside pickup
February 2022 || CANADIAN GROCER
25
Shopper research Shopping today vs. Tomorrow
When asked how they imagine they’ll buy groceries post-pandemic, most (74%) shoppers said they expect to shop in-store at a similar level as they do currently with only one-in-five (19%) anticipating they’ll shop in-store more frequently. More than half of shoppers said they did not expect they would be using online ordering and pickup to get their groceries in a post-pandemic world. We also asked shoppers to think about the size of their baskets today and when the pandemic is over; generally, these shoppers did not believe their basket size would change much once we’re out of the crisis with more than half (58%) saying they’ll spend the same on groceries in the future as they do currently. As far as meals go, shoppers said they don’t think their preference for homemade versus convenient meals would change much.
What’s on the list?
It may come as no surprise that we’re a nation of list makers, and before heading to the grocery store most of us (80%) have scribbled down the items we need
to purchase. The good news for grocers is that a considerable number of us (67%) do not stick to that list and will be enticed to make additional purchases when shopping. And about 3% of us totally wing it and shop without a list, deciding what to purchase when in the store. So, what’s in the cart? Fresh is clearly the focus with three-quarters of those shoppers surveyed indicating they had purchased produce, dairy (milk, eggs), bread/bakery and fresh meat/seafood in the past month. Some categories experienced notable declines compared to last year’s survey with fewer shoppers purchasing salty snacks (71% this year versus 76% in the prior year); pet food (31% versus 35%); and alcoholic beverages (28% versus 32%). But while alcohol may be waning, coffee is gaining with considerably more shoppers (55% versus 43% last year) adding it to their carts. Among the non-food categories, paper products are still in demand, but less so than they were a year ago with 63% versus 66% of shoppers purchasing them in the past month. Personal care and cleaning/sanitization products were also
SHOPPING BEHAVIOUR TODAY AND TOMORROW Shoppers predict their basket size in the future (post-pandemic) will not change drastically from what it is today, with more of them selecting the midpoint on the scale. STOCK-UP SHOPPER
Today - during pandemic (Oct. 2021)
13%
JUST GET A FEW NEEDED ITEMS
25%
34%
STOCK-UP SHOPPER
Predicted after pandemic
11%
21%
7%
SPEND MUCH MORE ON GROCERIES
Today - during pandemic (Oct. 2021)
JUST GET A FEW NEEDED ITEMS
26%
39%
18% 6%
8% 16%
SPEND MUCH LESS ON GROCERIES
53%
(6%)
(7%)
SPEND MUCH MORE ON GROCERIES
Predicted after pandemic
6% 16%
18% 5%
SPEND MUCH LESS ON GROCERIES
58%
14% 6%
* Highlighted %s have a statistically significant difference at the 95% confidence level (Today vs. Predicted). Significant increase / decrease vs. 2020 at 95% confidence level
Values in brackets reflect previous year figures
Q: Using a scale, please indicate your typical behaviours for both today and what you predict for when the pandemic is over
26 CANADIAN GROCER
|| February 2022
Shopper research purchased less by shoppers at grocery stores compared to a year ago. Private label products were popular with shoppers with most (89%) indicating they purchase these products at least some of the time. When asked about their motivation for purchasing private label items, 70% said they did so to save money while 52% feel the quality is similar to that of national brands. Shoppers reported spending, on average, $109 on their most recent grocery trip. Those with children in the household spent about $123 compared to $100 for households without. Cards continue to be the most popular form of payment
with today’s shoppers with more than half of them (55%) paying by credit card and one in three (35%) using debit cards. No surprise, cash continues to dwindle in popularity and was used by just 7% of shoppers while mobile payments were used by 1% of shoppers. And as for the expanded services offered by grocers, such as ATM/banking, florists, cooking classes, pick-up lockers or in-store dietitian services, most shoppers (67%) claim that they don’t use them. Among those shoppers who did report using such services, the in-store pharmacy was most frequently used, by 18% of respondents. Fewer
WHAT’S ON THE LIST? Most (89%) grocery shoppers purchase private label brands at least some of the time with most doing so to save money and because they feel the quality is comparable to national brands.
Purchase frequency of private label/store brand products
About the same
81%
Always/often
44%
Reasons for purchasing private label products: Sometimes
45%
Rarely/never
9%
To save money/less expensive Feel quality is similar to name brand Store brand product is better than name brand Preferred name brand was out-of-stock Unique store brand product/there is not a name brand option Other
Change in purchase frequency of private label in the past year
70% 52% 14% 12% 11% 2%
Don’t know/ not sure
Gift card
2%
1%
TOTAL SPEND ON MOST RECENT GROCERY TRIP Shoppers spent $109, on average, on their most recent grocery trip. However, households with children, spent an average of $123 compared to $100 for households.
$150.00 $200.00+ $199.99
12%
More
4% 14%
12%
$50.00 $100.00 - $99.99 $149.99
24%
30%
17%
1%
Other
1%
Cash
7%
Mean = $109.58
$122.78
$25.00 $49.99
Mobile payment
Less than $25.00
5%
% Selected Q: How much did you spend on your most recent shopping trip?
Average spend for households with children under 18
vs.
$99.56
Average spend for households without children under 18
Debit card
35%
Credit card
55%
Payment type used on most recent grocery trip
February 2022 || CANADIAN GROCER
27
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Shopper research Prepared meals
Being the go-to destination for meals has been identified as big opportunity for grocers and a way to maintain some of the gains achieved during the pandemic when homebound consumers were eating the bulk of their meals at home. According to the survey, 62% shoppers said they purchased prepared food at the grocery store in the past month, about the same as last year. For those shoppers who did not buy any prepared food, their reasons included “too expensive” (37%), and “prefer not to purchase at the grocery store” (36%) and “didn’t like the selection” (9%). Entrees—including rotisserie chicken, fried chicken, sushi etc.— were named as the most popular prepared items (purchased by 57% of shoppers). Interestingly, prepared cold side dishes were purchased by more shoppers this year (28% versus 22% in the prior year), while fewer hot sides were purchased (17% versus 22% last year). Generally, shoppers (65%) were “completely or very satisfied” with the prepared foods they purchased. And when deciding on whether to buy prepared food at grocery, shoppers said freshness, price/value, food quality and taste were their top considerations. The survey did reveal that a sizeable number of shoppers (more than onethird in some categories) were not aware if their store offered meal kits, had plantbased prepared foods or offered curbside pickup of these foods, suggesting there’s an opportunity for grocers to boost awareness of these items and services.
PREPARED FOODS Entrees are purchased most often at grocery and a majority of prepared foods shoppers (65%) are “completely or very satisfied” with their most recent purchase.
Types of prepared foods purchased at grocery in past month Prepared entrees (e.g. rotisserie & fried chicken, sandwich/wrap, sushi, etc.) Baked goods (e.g. bread, rolls, pie, brownies, etc.) Prepared cold sides (e.g. pasta salad, potato salad, bean salad, etc.) Prepared appetizers/snacks (e.g. chicken wings, potstickers, egg rolls, etc.) Prepared hot sides (e.g. macaroni & cheese, mashed potatoes, French fries, etc.) Prepared entree salads Prepared soups Significant increase / decrease vs. (2020) at 95% confidence level
3%
(22%)
(22%)
Values in brackets reflect previous year figures
Satisfaction with most recent prepared foods purchase at grocery
Not very/ not at all satisfied
32%
Somewhat satisfied
57% 40% 28% 20% 17% 17% 9%
65%
Completely/ very satisfied
Most important factors when purchasing prepared foods Freshness Price/value Food quality Taste Portion size Convenience/on-the-go Menu choices Sanitation
58% 58% 57% 51% 21% 18% 16% 14%
Significant increase / decrease vs. (2020) at 95% confidence level
(20%)
Values in brackets reflect previous year figures
Prepared foods - awareness and experience with services offered
Overview & Methodology • Survey sample:
1,000 grocery shoppers • Respondents were required to be age 18+, reside in Canada, shop at grocery stores at least once a month and are the primary or shared decision-maker for household grocery shopping
* Made-to-order prepared food
30%
In-store restaurant
18%
13%
Meal kits
17%
26%
* Plant-based prepared foods
12%
Mobile/online ordering
11%
* Home delivery of prepared foods
(6%)
Curbside pickup of prepared foods
24%
15%
24% 14%
24%
10% 15%
18%
13%
21%
10% 18%
15%
22%
8% 23%
11%
12%
20%
29%
21%
16%
15%
28%
40% 37% 36% 37%
(15%)
Yes, store offers and have tried Yes, store offers but have not tried No, store does not offer but would try No, store does not offer and would not try if did Don’t know Significant increase / decrease vs. previous year at 95% confidence level
Values in brackets reflect previous year figures
* Totals made end up being 99% or 101% due to rounding
February 2022 || CANADIAN GROCER
29
Shopper research SUSTAINABILITY
Health, sustainability & local
Shoppers were asked how important it was that grocery stores demonstrate a commitment to the following sustainability-related practices: * Donate food instead of throwing out
56%
Reusable bag incentives
46%
Locally-sourced produce/animal products
43%
Eliminate plastic bags/packaging
41%
Recycling containers for local use
38%
28%
9%
38% 41%
10% 7%
36%
18%
41%
* Movement towards zero waste
38%
43%
Ethical sourcing policies
38%
39%
* Energy-efficient equipment/fixtures
28%
Electric vehicle charging stations
15%
6%
13% (39%)
(16%)
7% 10%
19% 46%
8%
13%
13%
41% 24%
6%
12% 4%
11% 15%
(51%)
Really important Somewhat important Not concerned Don’t know Significant increase / decrease vs. previous year at 95% confidence level
Values in brackets reflect previous year figures
* Totals made end up being 99% or 101% due to rounding
Likelihood to switch to a store demonstrating stronger commitment to sustainability: Extremely very likely
15%
Not very/ not at all likely
35%
Somewhat likely
50%
Younger shoppers are more likely to switch = Millennials
2 in 3 (65%) indicate some degree of likelihood they would switch their primary grocery store based on sustainability
(24%)
Gen-Xers
(14%)
Baby boomers
(11%)
A LOVE OF LOCAL Purchase of locally-made items at grocery Always/often
38%
Most (85%) grocery shoppers purchase locally-produced products some of the time, with a majority doing so to support local businesses.
Reasons for purchasing locally-produced products To support local businesses Feel quality is better Sustainable/better for environment More unique Other
68% 44% 40% 18% 4%
Sometimes
47%
Fewer
5%
Rarely/never
More
28%
10%
Don’t know/ not sure
Change in purchase frequency of locally-produced products in past year
5%
About the same
67%
30 CANADIAN GROCER
(6%)
Canadians continue to place a big focus on their health and wellness with 73% of shoppers surveyed claiming to be health conscious (up slightly from 71% last year). Breaking it down by generation, more gen-Xers (75%) and baby boomers (76%) declared themselves “health conscious” than millennials (just 66% of this group claimed to be). When it comes to meeting the needs of health-minded shoppers, there’s room for grocers to improve. According to the survey, just 35% of shoppers said they were “extremely/very satisfied” with the selection of healthy products offered at grocery stores. When asked what health/better-for-you products they were most concerned about or interested in, 48% of shoppers said “fresh foods” while 34% said they were concerned about sugar and 29% sodium. Worth noting, just 7% of shoppers surveyed expressed an interest in vegan/ plant-based foods, but of this group 48% were extremely/very satisfied with the plant-based foods offered at their grocery store—this is up from just 27% last year. And for the majority of shoppers it’s important that grocers demonstrate a commitment to doing right by the environment. In fact, 65% (up slightly from 64% last year) indicated they would consider switching stores based on the retailer’s record on sustainability. Among the most important sustainability practices for shoppers: donating rather than tossing out food, reusable bag incentives, elimination of plastic bags/packaging and locally-sourced products. Canadian shoppers also profess a great fondness for locally-made goods with most (85%) saying they purchase locally-produced products at least some of the time. And 28% of shoppers reported purchasing more local products in the past year. While sustainability is the main driver for 40% of shoppers buying local, 68% of shoppers say they do so to support local businesses while 44% feel local products are of better quality. CG
|| February 2022
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By Rebecca Harris
From tackling waste across the value chain to broadening their social impact, grocers are reinventing what it means to be green
IN THE MID-2000s, the media declared that green was the new black, as environmental awareness surged and people sought to cool their impact on global warming (with much thanks to the Al Gore documentary An Inconvenient Truth). Magazine brands pumped out “green issues” (some on glossy, unrecyclable paper, nonetheless) and environmental claims like “all-natural” and “eco-conscious” took over the shelves and advertising airwaves. And then, for reasons like greenwashing and the realization that people can’t consume their way out of the problem, green faded to black. But, what’s happening now in food retail is arguably bigger, better and greener. 32 CANADIAN GROCER
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“The industry is embracing sust ain ability strategically and we’re seeing it guide decision-making in virtually all areas of food and beverage businesses,” explains Shelley Balanko, senior vice-president of The Hartman Group. “Previously, whether it be retailers or food and beverage manufacturers, sustainability was siloed and compartmentalized. Now, it’s taking the same evolutionary path we saw with health and wellness 20 years ago. Wellness has to be part and parcel of everything you do in the organization...and that’s what is happening with sustainability.” Retail consultant Carol Spieckerman calls it “sustainability’s second act.” “In the past, there was a lot of box checking
and retailers would talk about sustainability primarily as a PR play,” says the president of Spieckerman Retail. “Now, they’re making longer-term, more specific commitments across more areas, from carbon emissions and food waste, to supporting local food banks, to community involvement.” The reasons behind the sustainability push haven’t changed much since the green movement of 15 years ago: concern about climate change and consumer demands that companies do less harm to the planet. However, a few things are different now. “Retailers are now armed with better consumer data and more granular data,” says Spieckerman. “It’s to the point where
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THE BIG SUSTAINABILITY SHIFT
Generation Next thinking
it’s undeniable that new generations of shoppers truly care about sustainability—and on a number of fronts.” In addition, whereas eco-advocates from back in the day sounded a warning bell on climate change, today’s environmental challenges seem more like a fivealarm fire. To wit: The 2021 report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) projects climate change will increase in all regions in the coming decades. For 1.5° C of global warming, IPCC warns there will be increasing heat waves, longer warm seasons and shorter cold seasons. At 2°C of global warming, heat extremes would more often reach critical tolerance thresholds for agriculture and health, the report states. On the big picture of climate change, Joe Solly, a partner with Deloitte’s risk advisory practice, doesn’t pull any punches. “We now have this notion of an existential threat, where there is a lot of fear the planet is going to heat up so much that we’re going to have a catastrophic failure of our ecosystems and our societal reliance on those and, therefore, of our continued survival,” says Solly, who is also the Ontario leader of Deloitte’s sustainability and climate change practice. “So, it’s a horrible story and a horrible picture all around, no matter how you look at it.” If this seems grim, Solly also points out there’s a real business case for sustainability practices. More companies, for example, have begun to set net-zero targets, meaning the greenhouse gasses they put into the atmosphere are balanced by removing an equivalent amount. (The Paris Agreement mandates net-zero carbon emissions globally by 2050). “When you anticipate the future cost of carbon, the lower cost of lower-emitting technologies, government grants and incentives, and access to sustainability-linked loans, there is a positive business case to pursue net zero and reduce your emissions, in addition to meeting customer requirements,” says Solly. While the pandemic put some green efforts on pause, the industry is getting serious about sustainability for the long term. Here a few key areas grocers and their suppliers are focused on:
Reducing carbon emissions: As the fight against climate change becomes more urgent, many industries are stepping up efforts to reduce greenhouse gasses. For grocery retailers, this could take shape in a number of ways. Deloitte’s Solly suggests: having energy efficiency programs and practices in stores and distribution centres; exploring on-site renewable energy generation such as solar rooftops; and reducing emissions from fleets with things like better route planning, fuel-efficient driver practices, and switching to electric vehicles. As part of its sustainability strategy, Calgary Co-op has a strong focus on greater energy efficiencies and reducing greenhouse gas emissions. The retailer’s new Sage Hill location, for example, has LED lighting that uses 80% less energy and lasts 50% longer than traditional lighting. Calgary Co-op also upgraded its refrigeration systems to make them more energy efficient, and plans to do the same in its other stores. CEO Ken Keelor says another highlight is the use of combined heating and power (CHP) systems at six Calgary Co-op locations. This energy-efficient technology converts natural gas into electricity. At the same time, it uses waste heat produced by natural gas to boil water that is used to heat or cool the building. In addition to significantly reduced energy waste and greenhouse gas emissions, there’s a real cost benefit. “We’ve cut our utility costs at these locations by 30% to 40%,” says Keelor. “That’s huge, as energy bills have been rising.” Greening the supply chain: While retailers work to get their own houses in order, they also must consider the impacts of their supply chain. On the carbon emissions front, for example, research from non-profit CDP found that 90% of all disclosed emissions in the food sector come from supply chains (what’s referred to as “scope three” emissions), rather than stores and distribution centres. Elliot Morris, partner at EY, says retailers can make an impact with their wide network of suppliers in key areas such as plastics, packaging and food waste. Not only is there an obvious environmental
benefit, but research also shows consumers are willing to spend more on sustainable brands. “[Retailers] need to collaborate more across their supply chain to be able to provide transparency to the end customer,” says Morris. “When the customer has the right information, they will feel empowered to make choices for themselves.” Walmart is one major retailer that’s putting a big push on suppliers to be more environmentally friendly. Project Gigaton, which Walmart launched in 2017, aims to remove one billion metric tons (a gigaton) of greenhouse gasses from Walmart’s supply chain by 2030, through everything from energy and waste to packaging and product design. Last year, Walmart expanded the project to include suppliers’ fleets. Responsible sourcing is another key part of building a more sustainable supply chain. Deloitte’s recent report, “The future of food: A Canadian perspective— the sustainability conviction,” notes that consumers are paying more attention to where their food is coming from—they’re asking if it is ethically produced and are striving to buy more local foods. “These trends are also pushing food companies to ensure their suppliers respect human rights standards and avoid involvement in unsafe working conditions, unfair wage practices, human trafficking or slavery,” the report states. Longo’s places a big emphasis on responsible sourcing as part of its wide-ranging sustainability efforts. Last year, Longo’s became the first North American retailer to only offer Fairtrade bananas, through a partnership with banana importer Equifruit. The company has also committed to using sustainable palm oil in its packaged private label products by 2025, and is committed to sustainably sourcing 100% of its fresh and frozen seafood by 2025. “When our guests are shopping in our stores, they’re not only looking for high-quality, curated products, but also they’re trusting us that we’re sourcing those in a manner that reduces environmental impact along the way and protects things like human rights,” says Longo’s sustainability specialist, Danielle Reid.
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Generation Next thinking THE RISE OF THE ECO-CONSUMER As environmental and social concerns are top of mind, consumer support for sustainable brands is growing. The EY Future Consumer Index found that 80% of Canadians believe sustainability is an important criterion when making purchases. One third of Canadians say they’re going to buy more sustainable products this year compared to 2021, and 23% say sustainability will be the most important purchase criteria in three years. While what consumers say they’ll do isn’t necessarily what they do, sustainability might have an edge here. “First and foremost, Canadian consumers support retailers [and brands] prioritizing sustainability,” says Elliot Morris, partner at EY. In addition, the one third of consumers who intend to buy more sustainable products is not small potatoes. “That’s a very attractive market segment in and of itself—it’s disproportionately young and well off,” says Morris. “And so, in addition to broad support, there are valuable customer segments that retailers and CPGs want to pursue, and rightly so.” While price and value are still important to grocery shoppers, Morris doesn’t think those criteria are in conflict with sustainability. “Sustainability doesn’t necessarily need to cost more,” he says. “In fact, sustainability creates efficiency, which creates cost savings, and those cost savings can accrue to the retailer, the CPG, or the customer.” 34 CANADIAN GROCER
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Reducing waste: Retailers are also digging into the challenge of reducing waste on all fronts: food, plastics and packaging. “When it comes to packaging and single-use plastics, while retailers had a pass at the beginning of the pandemic, they don’t any longer,” says The Hartman Group’s Balanko. Calgary Co-op, which eliminated plastic shopping bags at the start of 2020, has ramped up its composting and recycling efforts, including electronics, cardboard, plastic and paper. “Overall, our waste generated is down 10% from 2019,” says Keelor. “For example, in 2020, our cardboard, paper, plastics and organics recycling and composting diverted 91% of our total waste.” Longo’s has set a target of 90% of its waste diverted by 2025 and is investing in developing various diversion streams for materials like cardboard and plastics. “We’ve also been working with our vendor partners on what’s coming into the stores in the first place to ideally try to reduce that waste,” says Reid. “If we’re not able to, we want to ensure that the packaging is compatible with one of our streams.” With food waste, retail consultant Spieckerman points out another thing that’s different about today’s sustainability movement: there’s a proliferation of third-party providers that can help. “That wasn’t the case before: it was pretty much all on retailers to make it happen,” she says. Apps like Flashfood, Too Good To Go, and Sauvegarde, for example, offer customers discounts on food nearing its “best by” date, and if not sold might end up in a landfill. Spieckerman says these digital marketplaces provide “plug-andplay” sustainability options for grocers. “On one hand, it makes it easier for retailers because they have a growing roster of partners that can help them achieve their sustainability goals,” she says. “On the other hand, it’s a challenge because there are no excuses not to do it.” For Deloitte’s Solly, reducing food waste takes a whole value chain approach, including: working with farmers to reduce waste; supporting regenerative agricultural practices; selling expiring products; donating to food banks; and upcycling, which is the process of making food and beverage products with certain ingredients that would otherwise go to waste.
Solly has some advice on a couple of fronts. “Retailers need to get better at displaying [nearly expired foods] in stores because when you walk into a grocery store, it’s really difficult to find those items,” he says. “So they need better practices in stores and they need to leverage [food waste] apps to create customer awareness and push those products.” Creating social impact: While climate change, pollution and extreme weather events tend to garner the headlines, sustainability increasingly includes social impact and people’s well being. For Calgary Co-op, this includes food-drive programs, offering the community physical spaces to gather, partnering with local social agencies, and giving through the Calgary Co-op Foundation. Calgary Co-op recently conducted a pilot with long-time partner Calgary Food Bank at six stores. Perishables that would otherwise go to compost were donated to the food bank, which collects food five days a week. Keelor said the project is being expanded to all Calgary Co-op stores, and the donations now include dairy, deli, meat, produce, bakery, frozen and grocery. “Our compostable product will go down because we are able to divert it for actual [human] consumption,” says Keelor. “Calgary has a lot of people who are homeless or living in shelters and need that support. So, this to me is the biggest initiative we’re doing that helps both the social and environmental pieces.” Looking ahead, Balanko says consumers will one day see the social and environmental elements as less distinct and more interrelated. One example is people seeing environmental sustainability as being tied to their personal health: if fish are consuming micro-plastics in the ocean and people consume the fish, it affects their personal health. “That’s how the most trend-forward consumer thinks right now,” says Balanko. “We anticipate the mainstream consumer will start thinking that way and seeing the environment and personal health as one in the same in the not too distant future.” CG Generation Next Thinking is an ongoing series that explores the cutting-edge topics that are impacting grocery retail today and in the future.
KRUGER PRODUCTS TEAM MEMBERS BUILDING ON A DECADE OF POSITIVE CHANGE FOR A STRONGER TOMORROW KRUGER PRODUCTS CEO, DINO BIANCO, CELEBRATES A DECADE OF POSITIVE GROWTH A new year brings renewed vigour in pursuing our mission of “Making Everyday Life More Comfortable” by leading with kindness, overcoming challenges, and setting bigger, bolder goals. We’ve set the bar high to support the needs of Canadians, our customers and our people to bring out their greatness. For a 10th consecutive year, Kruger Products celebrates our place on the list of Greater Toronto’s Top Employers, which recognizes employers who have gone above and beyond to offer forward-thinking policies and exceptional workplaces for their employees. I am inspired by the resilience of our people and their connection to our purpose during even the toughest of times. Our priority is ensuring our employees are supported in all aspects of their lives and helping them realize their full potential. We know that our differences make us stronger and together we make Kruger Products a great place to work. As the leading manufacturer of Canada’s most trusted and best loved tissue brands, including Cashmere® and Purex® bathroom tissue, Scotties® facial tissue and SpongeTowels® paper towels, we have worked together to transform our company to elevate our communities and protect our environment while leading the tissue industry to new heights. Through relentless innovation we have achieved so much as a team, including building on our longstanding national sponsorship partnerships with Crohn’s and Colitis Canada (since 2014) and the Kruger Big Assist (launched in 2020), renewing our sustainability commitment for another 10 years through Reimagine 2030 and successfully commissioning our state-of-the-art Sherbrooke, QC manufacturing facility. For 10 years, Kruger Products has been a GTA Top Employer and a company that empowers our people to lead and create positive change for a stronger tomorrow. These achievements were possible because of the efforts of our 2,700 team members across the entire company. I appreciate the opportunity to share our story and reflect on some of our proudest moments.
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Ran Goel, Fresh City Farms
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Retailer spotlight
FRESH CITY FARMS Paving the way for a fresh, sustainable future By Rosalind Stefanac Photography by Tobi Asmoucha
BEFORE RAN GOEL started Fresh City Farms in Toronto 11 years ago, he was practising law in New York City, working with hedge fund investments in the aftermath of a major financial crisis. “I realized how fragile the systems we rely on can be, including our food supply,” he says. With an over-reliance on processed foods and imports, Goel decided he wanted to be part of creating a more sustainable solution, starting in his hometown of Toronto. “I became infatuated with this idea of urban farming and leveraging that to get people really thinking about where their food comes from—and enjoying their food more in the process.” True to his word, Goel moved back to Toronto and started Fresh City as an urban farm at Downsview Park, growing organic produce and delivering it to city dwellers via an online subscription service. “Eventually, we were no longer able to grow everything we sold so we partnered with local farmers to sell local, organic produce and eventually basic groceries too,” says the CEO and founder. Today, not only does Fresh City employ 300 people and feed 40,000 people a month across southern Ontario through its online delivery service, it supports more than 20 farmers in growing their own vegetables, herbs and flowers to sell.
Over the last few years, the company also opened two brick-and-mortar Fresh City stores, and another six under The Healthy Butcher and Mabel’s Bakery & Specialty Foods banners. Goel says the company made the strategic decision to open physical retail stores and produce more of its own products to sell in-store and online to put a greater focus on vertical integration. “We know we’ll never be able to compete with Costco or Walmart in selling canned tomato sauce, organic or not, so we really wanted to create products that were unique and reflected our sourcing values,” he says. In going down this path, the opportunity to acquire Mabel’s and The Healthy Butcher—which focus heavily on locally made/organically sourced products—seemed like the logical step. These days, about 35% to 40% of Fresh City sales come from products made in-house, ranging from soups, salads, and sandwiches to smoothies, baguettes, entrees and appetizers. “There are also the dozens and dozens of relationships we have with local farmers and local makers of various kinds,” say Goel, noting that Fresh City has been carrying products from retailers like the Village Juicery since the cold-pressed juice company first launched.
During the pandemic, Fresh City also made the decision to leverage the liquor licence in place at its downtown store to start a liquor delivery service. “Of course, it aligns to our sourcing values with a focus on B.C. and Ontario organic and natural lines,” says Goel.
Sustainable farming long-term In promoting a more sustainable, longterm approach to fresh food production, the company recently secured a 20-year lease to an 11-acre plot of land at Downsview Park. Fresh City Farms will use 1.5 acres and the rest will be subdivided into smaller plots for other “complementary” organizations and individuals interested in farming. For example, the YMCA will be farming one plot as part of a summer camp for youth, while another farming collective will be geared to single, racialized mothers. Goel says proposals from other prospective farming innovators are always welcome. The location offers water access, a harvest processing area, dry and cold storage, greenhouse space and washrooms. “We’ve always divided our farm [land] with other farmers which has created a sense a community,” says Goel, noting that many have gone on to do other “cool things” like starting their own rural farms,
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Retailer spotlight or developing rooftop and warehouse farms. “A big part of what we’re trying to do is incubate a new generation of not just farmers but food entrepreneurs,” he says. Once pandemic restrictions are lifted, the plan is to also use the property as a space for weddings, corporate retreats and culinary events. Yet even with all of Fresh City’s success to date, Goel admits that the grocery industry isn’t easy for specialty businesses like his, especially with a global pandemic added to the mix. He recalls there were more than a dozen organic box delivery services in the area when Fresh City started out; now there are just two. “I don’t like to sugar-coat it because it’s tough; it’s really a day-by-day, quarter-by-quarter kind of decision making,” he says. “We’re always pushing the envelope on social and environmental causes, so it’s never this point of feeling truly comfortable.” (Below) Ran Goel and Fresh City Ossington manager Bryan Sherry. In recent years the company has grown to include eight specialty stores
Tackling bigger competitors and the pandemic What Goel sees as Fresh City’s advantage in the market is a growing expertise in being able to educate customers and offer engaging storytelling around why its products are unique and warrant a higher price p oint. For example, pre COVID, the grocer organized an event where customers could tour the farm and meet famers and key vendors. Similarly, communications sent out to customers often include photos and videos about Fresh City initiatives rather than being just product focused. “The big grocers and the legacy infrastructure they have to defend just can’t do what we do,” he says, whether that be supporting small farms or focusing on circular-packaging initiatives that engage customers. “We were also among the first in Canada to offer fair-trade organic bananas.” COVID-19 has also prompted the grocer to put a greater focus on cost efficiencies both online and in-store. With an e-commerce platform created in-house, Fresh City was able to be nimble in making adjustments to stock and delivery times as needed. “In some areas of the Greater Toronto Area we only deliver once a week, creating a denser delivery route,
which is better economically and better for the environment,” says Goel. Being able to offer already curated food baskets based on what’s available also proved cost-effective. “These baskets were much easier to pick and pack so we could serve more people during that dire first part of the pandemic,” says Goel. Even though things are starting to settle down on the labour front, an ongoing concern in the retail sector, Goel says pandemic-related staffing concerns have reinforced the fact he wants his business to be an employer of choice. “For us, our retail brick-and-mortar company is
fairly young, but I think we have some work to do—like many of our competitors— in improving the work experience for frontline workers,” he says. “But I think we’re up for the challenge.” Another key learning to come from the COVID crisis is the merit in simplifying operations. “We’ve seen simplified menus and less SKUs at grocery stores during the pandemic and I think that’s here to stay,” says Goel. “If the market is signalling that labour is going to be more expensive, the things that cheap labour made possible may no longer be possible and that’s fine.” Going forward, Goel says the company will continue improving and expanding its e-commerce platform and look to double (or even triple) its store count and online customer base within the next five years. Its primary goal, however, is the same as it was when Fresh City first began: to be at the forefront of pushing customers to shop more locally, organically and sustainably. CG
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CATEGORY CLOSE-UP
healthy spreads Tasty and nutritious, healthy spreads are gaining popularity as a go-to choice throughout the day
W
hether they’re nut, fruit, chocolate or butterbased, spreads have long been a kitchen staple. After all, they’re convenient and make a common slice of bread so much tastier. But as consumers become more and more focused on healthy living, they’re gravitating to healthier spreads with less sugar and a more natural ingredient list. The latest research from Future Market Insights shows the global spreads market rising by a compound annual growth rate of 6.3% between 2021 and 2031, largely driven by this focus on healthy eating.
grams of sugar per serving and we also add chia seeds for extra fibre.” (Typical jams contain 10-12 grams of sugar per serving and no fibre.)
Here are several reasons why healthy spreads should be on every grocer’s radar these days.
Meanwhile, peanut butter alternatives continue to gain momentum. Not only are consumers going beyond almond and cashew to pistachio and walnut butters, many parents are opting for allergen-free seed butters made from sunflower, chia, flax and even watermelon seeds.
Nutrition first: With more and more all-natural nut and seed butters available, it’s not surprising that consumers are ditching processed butter and sugarfilled spreads for these healthier options, which are high in protein and good fats. Similarly, those who steered away from sugar jams are discovering naturally sweetened, gluten-free and organic options made with high-quality fruits and no artificial flavourings. “Everyone thinks that jam is full of sugar and our mission at Healthy Crunch is to really innovate everyday foods and make them healthier,” says company Founder and CEO Julie Bednarski. “What’s unique about our chia jam is that there’s only two
Unique flavour boosts: Traditional jams (i.e., strawberry, blueberry, raspberry) are giving way to a bevy of interesting pairings, such as fruit with chia. More exotic fruit flavours such as mango, pineapple and fig are being blended with herbs and spices, such as mint and ginger. Another market trend is the shift from sweet-tasting spreads to combinations of sweet and spicy, or sweet and smoky.
Beyond breakfast fare: Spreads have always had their place in a standard breakfast. But with healthier ingredients and more robust flavour profiles available now, consumers are choosing to use spreads in sauces, smoothies, baking and even straight out of the jar for a mid-day, nutrition hit. As flexitarian and plantbased diets become more popular, healthy spreads can fit nicely into various meal plans.
Spreads that score high in flavour + nutrition Seed butters: Made with allergen-free sunflower seeds, school-approved Seed Butters from Healthy Crunch come in kid-favourite flavours like chocolate, chocolate banana and salted caramel. Chia jam: The first in the world to be Keto-certified, Healthy Crunch’s Chia Jams are naturally sweetened and packed with chia seeds for added protein and fibre.
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FROZEN FOODS
THE FROZEN EXPLOSION
GETTY IMAGES/ADISA
Frozen fare is hot stuff thanks to category innovation, convenience and affordability By Jessica Huras
Consumers are feeling anything but icy about frozen foods, with market research company IRI reporting sales grew 9.9% year-over-year in 2021. Frozen food innovation is also on the rise as shoppers seek products offering higher-quality ingredients and better-for-you benefits without compromising on the easy preparation and budget-friendly prices the category has long been known for. According to Ransom Hawley, CEO of market research company Caddle, the consumer stockpiling that dramatically drove up frozen food sales in 2020, during the height of the pandemic, continued to fuel growth in the category in 2021. “What we’re seeing is that people are still maintaining a safety stock of items and continuing to cook things that they learned to cook throughout the pandemic,” he explains. A 2021 report from Caddle shows younger consumers are the driving force
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“You’ve seen some vegetable companies talk about [their product] ‘as good as fresh’ because it’s flash-frozen,” says IRI’s Sally Lyons Wyatt. “It’s working, for the most part. We’ve really seen the adoption by more consumers of frozen over the past couple of years and a lot of that is because they do see it as an option that can be as good as fresh”
behind the surge in frozen food sales. Millennials and gen-Zers reported they increased their frozen food purchases by 33% in 2020, compared to 26% of the general Canadian population. “Canadians are in the freezer aisles for a lot of reasons, but the main reason is convenience. [Frozen foods] are quick and easy,” says Hawley. He predicts that the affordability of frozen food is likely to become a higher priority for shoppers in the coming year. “Consumers are really worried about their money. They’re worried about inflation outpacing their income,” says Hawley. “People are going to be looking for simple, easy, cost-effective [meal] options.” Evangeline MacIntyre, grocery manager at Country Grocer, believes cost is behind the boost in frozen food sales she’s noted at her store in Royal Oak, B.C. “[Sales of] frozen vegetables and frozen fruit have essentially doubled,” she says. “I’m going to assume it’s because fresh fruit and vegetables have recently gone way up in price.” MacIntyre’s observation is supported by a 2021 report from IRI, which suggests low-income households are among the primary demographics fuelling frozen food sales. Caddle’s report indicates vegetables, fruit, and pizza are leading the frozen category. Sally Lyons Wyatt, executive and practice leader, client insights at IRI, notes that effective brand messaging in recent years on the benefits of flash-freezing fruits and vegetables has helped persuade many consumers to switch from fresh to frozen. “There’s been a lot more communication. You’ve seen some vegetable companies talk about [their product] ‘as good as fresh’ because it’s flash-frozen,” says Lyons Wyatt. “It’s working, for the most part. We’ve really seen the adoption by more consumers of frozen over the past couple of years and a lot of that is because they do see it as an option that can be as good as fresh.” She adds that the longer shelf life of frozen fruits and veggies compared to their fresh counterparts can help consumers minimize food waste, which is another attractive selling point for many shoppers. Indeed, while convenience and affordability have long been at the heart of frozen foods’ appeal, shoppers are now looking to the category to offer meals that are also good for their own health and good for the health of our environment, too. Michelle Bienvenue, vice-president of sales for Evive Nutrition, says the brand’s natural, non-GMO smoothie cubes are helping to change negative consumer perceptions around frozen foods. “In the past, frozen food has had a somewhat unpleasant veil around it but now that has changed,” she says. Evive capitalizes on the concept of flash-freezing, claiming the organic fruits and vegetables used in the brand’s frozen smoothies are picked at the optimal time to preserve their nutrients. “Our customers love our zero food waste options and use of organic, local ingredients as well,” adds Bienvenue.
Consumer demand for better-for-you frozen options was essential to the growth in sales of frozen seafood, which outperformed the general frozen department by 2X according to IRI’s report. The report found a substantial increase in social media mentions of seafood during the pandemic, with trending posts centering around themes of healthier eating and natural ingredients. Ashley Chapman, vice-president of Chapman’s, says the ice cream brand has also noticed growing consumer interest in better-for-you frozen products. Chapman explains there’s been a spike in sales of its “no sugar added” ice cream SKUs over the past two years. “That was our main decision criteria for releasing so many new NSA (no sugar added) flavours this year,” he explains. NSA ice cream bars and a NSA coffee and chocolate ice cream are among the brand’s most recent product rollouts. Additionally, Chapman’s is set to release two new frozen yogurts, a lower-fat alternative to its traditional ice cream that caters to health-conscious consumers. Chapman says shoppers with special dietary preferences and restrictions have been a priority in recent years, with the brand also offering a line of lactose-free, gluten-free sorbets. IRI’s Lyons Wyatt says plant-based products are another major trend in the frozen aisle. “We’ve seen the infiltration of plant-based into the dairy options, such as ice cream and sherberts. You’ve seen plantbased go into the frozen meat area and the frozen meal area. Plant-based has been huge,” she says. By contrast, IRI’s report suggests that traditional meat and poultry had a relatively small category share performance within frozen for 2021. Country Grocer’s MacIntyre reports that sales of frozen plant-based meat alternatives are picking up steam in her store. Meanwhile, Michael Gray, director of product development and quality assurance at M&M Food Market, says plant-based products are a focus of the chain’s upcoming product launches. “We’re getting big into plant based,” says Gray, adding that alternative protein meatballs, ‘fishless’ tenders, and burgers are among the plant-based products M&M is set to roll out this year. Frozen plant-based options are also in the spotlight at General Assembly Pizza, a company that began its life as a restaurant in Toronto and now also offers its pizzas in grocery. According to CEO Ali Khan Lalani: “We’re really putting our emphasis on developing a broader plant-based and flexitarian pizza line. We have a brand new plant-based pepperoni pizza that’s coming to market in the near term,” he says. In addition, General Assembly is updating its current plantbased Margherita pizza. Like Evive Nutrition’s Bienvenue, Lalani sees General Assembly as representing the new wave of frozen food brands that are redefining the category in the minds of consumers. “The premise to create the product was a personal desire to create a better
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“If you want to order dinner for four, it’s hard to get it on your table for less than $75,” says General Assembly CEO Ali Khan Lalani. “I think that’s the rationale behind why the quality frozen segment as a whole is starting to see year-over-year increases”
A new wave of premium brands like General Assembly Pizza are redefining frozen foods
frozen pizza...one that was a significant leap forward in terms of quality at the shelf,” says Lalani. General Assembly’s frozen pizzas are made with naturally-leavened dough, grass-fed mozzarella and meats that are free of nitrates and sulphates. “We source restaurant-grade, high-quality ingredients,” says Lalani. “Customers are really excited about quality, and associating quality and premium to the frozen food aisle.” Caddle’s Hawley says this kind of product premiumization is another emerging trend in the category. “There’s a push to modernize a lot of the frozen foods brands in terms of meal occasions and the stigma around these brands as being very unhealthy,” he says. According to M&M Food Market’s Gray, the chain has revamped its image over the past several years and looked to attract younger consumers by highlighting its restaurant-quality products. “M&M used to be known as the store that your parents shop at,” he says. “We’ve reimagined and we’ve changed our product portfolio to bring new and innovative items in that appeal to millennials.” IRI’s Lyons Wyatt says that many frozen food brands are modernizing by expanding their suggested preparation methods beyond the standard microwave. They’re instead catering to the new types of cooking tools that are trending with consumers, such as air fryers. “Calling out different cooking appliances and having cooking instructions across a variety of cooking methods is also going to help from an innovation and adoption standpoint,” she says. Hawley points out, however, that premiumization is a delicate balance for frozen food brands to strike while still retaining their core selling points for shoppers. “It’s an interesting play because you can’t go too premium,” he says, noting that premium products mean
premium prices in a traditionally low-cost category. Although General Assembly’s pizzas are priced higher than typical frozen pizzas, Lalani views their products as offering savings for consumers when compared to restaurant takeout. “If you want to order dinner for four, it’s hard to get it on your table for less than $75,” he says. “I think that’s the rationale behind why the quality frozen segment as a whole is starting to see year-over-year increases.” Lalani encourages retailers to embrace premium pricing to best capitalize on the sales of frozen products. “If the average frozen pizza in a grocery store is $8 or $9 and our product is $12…the incremental margin that we are providing to your store just went up,” he says as an example. In spite of the rise in online shopping during the pandemic, IRI’s report indicates that frozen products continue to be sold primarily in brick-and-mortar stores. Lyons Wyatt believes this represents a potential area of opportunity for retailers. “When they [consumers] do [online] searches, make sure that the search algorithm brings up frozen items in addition to the other items that might be in the store with those same types of attributes,” she says. Lyons Wyatt also advises grocers to showcase the convenience of frozen food in their marketing efforts. “There’s a lot of cooking fatigue, so where frozen has a great benefit is that ability to provide a menu,” she says. “Maybe there’s a way to connect with the sister departments in the store and put a whole menu together that includes frozen as well as some fresh and some refrigerated items. Provide [consumers with] an affordable meal plan.” Caddle’s Hawley predicts more consumers will be turning to print and digital flyers in search of grocery deals in the coming months. He suggests retailers appeal to budget-conscious shoppers in their promotional materials by highlighting frozen products as economical meal solutions. With better-for-you frozen products already resonating with consumers, Lyons Wyatt also suggests retailers keep an eye out for new, “functional” frozen products, which she thinks could be the next big trend in the segment. “There’s room for more innovation and for additional functional benefits like immunity, cognitive health or metabolism. We see that in other categories,” she says. Despite its humble reputation for providing quick, low-cost meal options, frozen is emerging as a versatile category that can cater to diverse consumer needs, ranging from plant-based alternatives to elevated ingredients and flavours. “It warms my heart to see grocery stores take out some of those classic incumbent frozen brands that have a 40-plus ingredient list and replace them with premium products,” says General Assembly’s Lalani. “We’re starting to see innovation like we’ve never seen before. And we’re starting to see types of foods in the freezer aisle that we’ve never seen before.”
February 2022 || CANADIAN GROCER
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Aisles
THE ENDURANCE OF CARDS
To capture more greeting card sales, grocers should consider e-comm and alternative placement in-store
SHUTTERSTOCK/G-STOCK STUDIO
By Andrea Yu AS THE PANDEMIC continues to limit in-person celebrations, greeting card sales remain strong as customers look for a way to deliver more meaningful sentiments. A 2021 survey from Hallmark Insights & Analytics found that greeting cards, compared to other forms of communication, have the highest growth potential post-pandemic. “Of the 10,000 survey participants, the overwhelming majority believe the impact of cards are worth the time and effort,” explains Scott Legleiter, sales vice-president of national accounts at Hallmark Canada. “More than half of the consumers believe cards are more meaningful than other forms of communication.” And a 2021 survey from Narrative Research found more than half (54%) of Canadians have sent a greeting card using Canada Post within the last year. Thanks to COVID-19, the way consumers are buying cards is changing, perhaps for good. As more consumers shop online for essentials such as groceries, retailers should consider the sales opportunities for greeting cards on their e-commerce sites. “With some of our other retail partners, you may be able to add a card to your online order for pick up or delivery,” Legleiter explains. In-store shopping continues, however, to be a strong driver of greeting card sales. With consumers making fewer trips to the store, Legleiter says seasonal card displays are going up earlier in some of Hallmark’s retail locations, allowing more opportunities to purchase. And while the holidays are a big opportunity for card sales, they’re not the biggest.
Rod Sturtridge, president of Carlton Cards Canada, says a significant portion of sales occur outside of the holidays. “[The No. 1] selling opportunity for every store is actually within the everyday card categories,” Sturtridge explains. “More than 70% of total yearly greeting card sales are gained from everyday cards. To put the category importance into perspective, the next highest selling season is Christmas at approximately 16% of total yearly sales.” Sturtridge sees greeting cards as an add-on item and an easy way for grocers to increase basket size. Within everyday categories, Hallmark Canada says customers are gravitating towards messages that share positivity, encouragement, gratitude and messages referencing physical connections, like ‘Wish you were here.’ A new category of tongue-in-cheek cards has also emerged in light of the pandemic. Joanne McNeish, an associate professor of marketing management at Ryerson University, purchased multiples of a humourous card that she mailed to friends during the pandemic. It says: “If 2020 was a reality show, it would be cancelled.” McNeish says new trends in greeting cards grocers should pay attention include recyclable cards, which do not incorporate foil or plastic glitter and appeal to a growing group of eco-conscious consumers. “The environment is important to most shoppers,” she explains. Another category of eco-conscious cards are those that have seeds embedded in the paper or card material, which can then be planted. “Some can be reused as a cleaning cloth and after many uses can be composted,” says McNeish. Since these cards are more expensive, McNeish recommends choosing styles with no message inside so they can apply to any occasion. To boost greeting card sales, McNeish recommends retailers experiment with their placement in-store since cards are often an impulse buy. “If you have a wine boutique, flowers or toys as part of the store merchandise, position a small rack of cards by that area. By having a standalone display, you remind customers to add a card if the wine or toy is being bought as a gift.” McNeish also points to the bakery and takeout counters as another overlooked spot for card placement. “At the bakery counter, customers may be picking up a birthday or celebration cake.” If space is limited, stick to cards without specific ages to celebrate birthdays and anniversaries. “Be sure to keep the displays tidy and full,” says McNeish. “[It’s] better to make the displays smaller but looking good than to have empty spaces due to stock-outs or the lack of employee attention.” Lastly, as consumers have become accustomed to scanning for floor decals, McNeish reminds grocers of the opportunity to use this spot as a marketing tool. “While the COVID decals tend to be directions to stand apart or arrows, you could use floor decals in places where customers might be waiting in line, to remind them to buy a greeting card,” she says.
February 2022 || CANADIAN GROCER
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1 FLORAL FLAVOUR
Tasting like a pomegranate, hibiscus sabdariffa adds notes of floral and red juicy fruits with a hint of sourness. “It has historically been paired in beverages with other fruity flavours such as the common combo, hibiscus raspberry, or the more original blend, hibiscus grapefruit,” says Manuela ChevallierRufigny, R&D director at Kerry Taste & Nutrition in Granby, Que. “Once paired, it resonates with nature—think botanical.” According to Kerry’s proprietary study, Botanical State of Mind, 81% of North American consumers say botanicals provide a unique taste experience, with florals being most strongly associated with the category versus herbs and spices. The same research found hibiscus ranked among the top three botanicals as being “interesting” and “creative.”
Hibiscus Four things to know By Chris Daniels
3 STAR EXTRACTION There are more than 200 different species of hibiscus. But when it comes to food and drink preparation, the star is the hibiscus sabdariffa, whose extract is the calyx, the red-hued leafy structure that protects the flower bud. High in calcium, vitamin C and iron as well as antioxidants, it has been used for centuries to make a hot or cold drink in an enticing pink hue, and help regulate body temperature and support heart health.
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4 PERFECT PAIRING Given Canadians’ hope of travel to more exotic landscapes, Kerry’s Chevallier-Rufigny suggests retailers and manufacturers collaborate on tying-in hibiscus products with promotions around travel. They could also play up the marriage of the exotic with the familiar. “Hibiscus is often paired with a familiar flavour, and that delivers an excellent chance of market success as Canadian consumers are more likely to try an innovation that includes the assurance of a traditional taste,” she adds.
Aisles 2 BEYOND TEA TIME B.C.’s Choices Markets has seen hibiscus tea sales shift into “higher growth,” says Kelsey Moore, the chain’s nutrition operations manager. Studies showing hibiscus can lower blood pressure “may be peaking consumer interest,” she notes. But hibiscus isn’t just for teatime. “We are starting to see hibiscus appear in more probiotics, kombucha, sparkling water and water enhancers,” says Moore. At Whole Foods Market, Rachel Bukowski, senior team leader of product development, says “producers are harnassing the flaovur of hibiscus in the form of fruit spreads, yogurts and more. “ Enterprising manufacturers are helping to grow the market. Nuba Tisane, an Oakville, Ont.-based maker of an organic hibiscus drink line, got a purchase order from Loblaw for 44 stores across its banners in Ontario, Quebec and Atlantic Canada in December. The order came on the same day its co-founders, Gina El Kattan and her mother Amal Soliman—who moved to Canada in 2011 from Egypt, where hibiscus brews are a staple—appeared on an episode of Dragons’ Den. (Forecasting sales in 2021 to reach $250,000, the mother-daughter duo scored a deal with one of the dragons.) “We’ve also since been approached by Walmart Marketplace,” says El Kattan. “Given supply chain issues, they are trying to find authentic products more locally.” Nuba products include both a sweetened and unsweetened drink, the latter popular in health food stores. Nuba also has an elderberry hibiscus flavour, and packages and sells dried whole hibiscus flowers—El Kattan says they can be used not just in beverages, but as a healthy filling for meatless tacos. Another manufacturer, Evive Nutrition, has expanded its superfood-based smoothies found at retail with a hibiscus-infused flavour it calls Immunity. It comes after the successful launch of a special-edition smoothie in 2020, called Bloom, which “featured a generous amount of hibiscus,” says Claudia Poulin, president of the Quebec-based company. February 2022 || CANADIAN GROCER
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! y a d o le t e n b i l a l n i o a v y a p o y c t i t 2 n 2 a 0 qu 2 r u d o e t y i ts r e m i r d L o r p O e m/r
co . r e c o r nG a i d a n Ca
WHO’S WHO 2022
Annual directory of chains and groups in Canada
New on shelf!
Aisles The latest products hitting shelves
1 1 DOVE CARE DEODORANT BY PLANTS Dove Care by Plants are deodorants specially formulated with 99% naturalorigin ingredients, 100% natural-origin fragrances and they come in 96% recycled packs. Its makers also say this deodorant provides 24-hour odour protection that is kind to skin. 2 BASK PINOT GRIGIO BASK Pinot Grigio is a low-calorie (only 120 calories per serving and zero grams of sugar) wine with a crisp, clean finish and aromas of pear and lime. Created by Arterra Wines Canada, the BASK line is also available in red, white and rosé varietals.
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3 LAY’S FLAVOURS FROM CHINA In celebration of Lunar New Year (Feb. 1), Lay’s is recreating two of China’s most popular (and unique) flavours and making them a permanent addition to its lineup of chips in Canada. Cucumber, and Chicken and Tomato flavoured potato chips are sold in 165-gram bags and will be available at most grocery stores across the country starting in late January. 4 CORONA SUNBREW Corona is bringing Canadians “Sunshine, Anytime” with the launch of its nonalcoholic beer that it says contains 30% of the daily value of vitamin D in each 330-mL bottle. Called Corona Sunbrew 0.0%, this buzz-less beverage contains only 60 calories per serving and is sold in six-bottle packs at select grocery stores in Quebec, before rolling out across the rest of Canada in the coming months.
3 5
5 PAM COOKING SPRAYS New PAM Non-GMO Avocado Oil and PAM Organic Extra Virgin Olive Oil cooking sprays can be used for frying, baking or grilling and can be directly applied to food to help lock in flavour. Both of these no-stick sprays are free from artificial colours, flavours and preservatives. CG
4 February 2022 || CANADIAN GROCER
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Express Lane
FEEDING THE FUTURE
With its high-tech indoor farming system, Infarm’s mission is to sustainably supply food to growing cities By Shellee Fitzgerald NINE YEARS ago, Infarm’s founders started growing food for themselves in an exercise in self-sufficiency. Today, that experiment has blossomed into a global enterprise with the Berlin-based company operating a network of Growing Centers and more than 1,500 indoor farms across 30 of the world’s largest grocery chains, including Empire in Canada. Infarm says its smart modular system allows distribution of vertical farms throughout the urban environment, bringing produce closer to consumers (and thus racking up fewer food miles). The company also boasts that its produce is grown without chemical pesticides, requires little water and can be grown yearround, which, Infarm says, makes it a sustainable solution for feeding swelling city populations. We recently spoke to Daniel Kats, the company’s executive vice-president of sales about Infarm’s grocery partnerships, why there’s so much interest in vertical farming right now and the company’s ambitions beyond leafy greens. Here are edited excerpts from the interview.
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and the supply chain is much shorter, which secures much fresher produce on the shelves, provided by a transparent supply chain. In addition, our smaller in-store farming units put [the farms] in front of shoppers’ eyes so they can see how the produce is grown. It’s harvested in the stores so shoppers can pick it up from the shelves, take it home and they get the freshest experience. That’s how we started in retail. We work with a lot of other food businesses that have a need for very fresh produce such as restaurants, but retail has always been the main business for us.
There is a lot of interest and investment in vertical farming right now. Why is that? We have a global problem in that our food system is broken. With a growing population and an expected seven-billion people living in cities by 2050, it cannot meet the needs of tomorrow. If products need to travel for weeks or we come to a store and shelves are empty because of weather uncertainties, locally-produced food in controlled environments can be part of the solution. And vertical farming is a smart solution because it requires 95% less land, 95% less water and 90% less transport compared to traditional agriculture. We need food to exist and I think that’s why the industry is booming.
Are the costs of vertical farming manageable, to make it a competitive solution? Definitely. Vertical farming is not different from any other business, you need to work smart to make a profit. The technology is advancing; for example, light technology—in the past five years we’ve managed to reduce our electricity consumption by almost 50%, this is by improved LED technology. Another is that the way we farm is very smart. We collect billions of data points on each product every month. This data is analyzed on a daily basis and allows us to become smarter in the way we grow our plants. The result is that we can grow more on a square metre, and then we can reduce the price of the product and make it even more accessible to [consumers]. Basically, the more we grow, the more we learn, the more we improve the growing process and that’s how we can reduce cost.
Infarm partners with supermarkets around the world. Why do you seek them out?
What’s next for Infarm?
Supermarkets have a need to supply fresh produce all year round to their customers. In most regions, fresh produce needs to be imported from different countries and is travelling a lot—often, food is travelling more than us! When it arrives [at the store] it’s been travelling for three or four weeks, which is not fresh and often not tasty. From our Infarm Growing Centers and our in-store farming units, we offer exactly what is demanded: locally grown, fresh produce with stable yield and affordable prices. Seasonality doesn’t play a role anymore, import into the countries can be reduced
We’ll keep investing in Canada; we’re thinking about how we can expand even more in the country because the potential is enormous. And [in terms of product] we definitely want to expand beyond the greens. In Germany, we’ve already launched mushrooms and will add cherry tomatoes, strawberries and chilies soon. To really expand the portfolio we’re investing a lot in research and development and have a large team working day and night on developing new categories because at the end of the day we want to offer the entire fruit and vegetable basket to the consumer. CG
|| February 2022
INFARM
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