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Gene-edited foods: will the consumer bite? +

2018

ANNUAL MARKET SURVEY inside

FEBRUARY 2019

MEET LEFT COAST NATURALS' IAN WALKER CRUNCH TIME! WHAT'S NEW IN SAVOURY SNACKS?

PM 42940023

 Janet Jacks, Goodness Me!

The Healthy  Grocer: A look at Goodness Me! Natural Food Market


“I know what my family eats, I just need to get in and out of the store with what works for them.”

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IS RELEVANT REPORTING, ONLINE

TE CHNOLOGY has b e co me on e of the key differentiators for many retailers including those in our own industry. Convenience with the accessibility of product information continues to evolve. The IDDBA is providing these trends and more, and it’s all available online in What’s in Store 2019 - Digital.

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CONTENTS February 2019

COVER STORY

THE HEALTHY GROCER

28

Volume 133 Number 1

OPINIONS

05 Front Desk 20 Shopper Sense 22 Eating in Canada 24 Consumer Shifts 54 Checking Out

At Goodness Me! it’s all about helping customers eat and live better

PEOPLE

06 The Buzz

Comings and goings, store openings, awards, events, etc.

08 Ian Walker

Meet the president of B.C.’s Left Coast Naturals

FEATURES

GENE-EDITED FOODS

IDEAS

consumers get on board?

16 Canada’s Food Guide

13 What a waste!

A new study shows we waste more food than we consume. What can we do about it?

34  They’re coming, but will

What new advice is being served up and what is the industry’s reaction to it all?

2018 MARKET SURVEY

18 Putting the peas in podcasting

42  How well did grocers

Industry players are starting to dabble in podcasts. Compelling content is key to doing them right

fare last year? All is revealed in our annual Market Survey

AISLES

47 It’s crunch time

8

Upscale flavours and new veggie varieties are trending in savoury snacks

50 Feeding our furry friends

How to make your grocery store a destination for picky pet parents

45

52 Cauliflower power

From pizza crust to crunchy snacks, cauliflower-based innovations are on the rise

53 It’s in the can

COVER IMAGE: MIKE FORD

50

Nielsen data reveals how various canned veggies have been performing at retail

FOLLOW US ON

52

@CanadianGrocer Canadian Grocer Magazine @CanadianGrocerMagazine February 2019 Canadian Grocer

3


PRESIDENT, ENSEMBLEIQ-CANADA Jennifer Litterick jlitterick@ensembleiq.com

FRONT DESK

GROUP BRAND DIRECTOR-RETAIL Kathryn Swan kswan@ensembleiq.com

VICE PRESIDENT/GENERAL MANAGER EVENTS Michael Cronin mcronin@ensembleiq.com

EDITOR-IN-CHIEF Shellee Fitzgerald

sfitzgerald@ensembleiq.com

MANAGING EDITOR Carol Neshevich

cneshevich@ensembleiq.com

ONLINE EDITOR Kristin Laird

klaird@ensembleiq.com

ART DIRECTOR Josephine Woertman

jwoertman@ensembleiq.com

CONSULTING EDITOR George H. Condon condug@sympatico.ca

VICE PRESIDENT, PRODUCTION Derek Estey destey@ensembleiq.com

PRODUCTION MANAGER Michael Kimpton

Canada’s Food Guide recommends we enjoy our food and eat with others

mkimpton@ensembleiq.com

MARKETING DIRECTOR Alexandra Voulu avoulu@ensembleiq.com

AUDIENCE DEVELOPMENT MANAGER Lina Trunina ltrunina@ensembleiq.com

WEB OPERATIONS MANAGER Valerie White vwhite@ensembleiq.com

SALES ASSOCIATE BRAND DIRECTOR Vanessa Peters vpeters@ensembleiq.com

SR BUSINESS DEVELOPMENT MANAGER Chantal Barlow cbarlow@ensembleiq.com

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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 © 2019 by EnsembleIQ, may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, promotional 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.

GOVERNMENT OF CANADA

Printed in Canada at Transcontinental.

MUCH ADO ABOUT FOOD

The new year brings new ways of thinking about food JUST ONE MONTH into the new year and there’s been big news hitting Canada’s food landscape. We’ve seen new regs on how to keep food safer, new research on our towering food waste problem, and new guidance on not only what we should eat, but also how we should eat food. First up was the Safe Food for Canadians Regulations, which came into effect in mid-January. In the works since 2013, the new regulations aim to, at last, modernize our food safety system with a focus on prevention. Among the changes is a call for companies to keep traceability records so, when need be, unsafe foods can swiftly be removed from the marketplace “to ensure food on grocery shelves is safe to eat.” Also in January we were reminded of our wasteful ways. A year-long study into the problem by Second Harvest and vcmi revealed some sobering results: we waste more food than we eat. In fact, we toss out $49-billion worth of the stuff and the food industry shoulders much of the blame. Surely we can do better; our story on page 13 offers some strategies.

And, of course, there was much hullabaloo surrounding the new Canada’s Food Guide (the first update since 2007). Crafted without input from the food industry, the new guide has evoked both cheers and jeers. Turn to page 16 to see what it’s all about. While we’re on the subject of food, in this issue we meet some impressive food folks. Read how Left Coast Naturals’ Ian Walker (page 8) has built a healthy snack company where purpose really is as important as profit. And how Janet Jacks (page 28), founder of Goodness Me! Natural Food Market, has made teaching customers to eat and live well a core part of the business. At the other end of the food spectrum, writer Rebecca Harris takes us into the world of gene-edited food (page 34). It’s on its way, but will consumers get on board? Some food for thought.

Shellee Fitzgerald Editor-in-Chief

sfitzgerald@ensembleiq.com

The grocery industry is changing rapidly. 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 three times a week. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

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February 2019 Canadian Grocer

5


THE BUZZ

The latest news in the grocery biz

 OPENINGS 

In January, celebrity chef Mark McEwan opened his third gourmet market in Toronto. The new 17,000-sq.-ft. McEwan store serves up “carefully curated” highend groceries and freshly prepared meals at the corner of the city’s busy Yonge and Bloor streets. Among the store’s features is a café serving coffee and smoothies; Fabbrica Pizza offering roman style pies; a sushi bar; and a carving station and rotisserie. McEwan opened his first gourmet grocery store in Toronto in 2009. FARM BOY expands again. In December, the Sobeys-owned, Ontario-based grocer opened a new location in Oakville, west of Toronto, and in late January the chain opened its 28th store at Leslie and Lakeshore in Toronto.

Chef Mark McEwan opened a third McEwan store in Toronto in January. The gourmet market offers high-end groceries and freshly prepared meals

H-MART is heading to Edmonton in 2019. The Korean-focused supermarket operates dozens of stores across the United States as well as locations in Vancouver and the Greater Toronto Area, but this will be the first in Edmonton.

MCEWAN

A new FRESH STREET MARKET is set to open in Vancouver this summer. The store will be located in the city’s new Beach District, part of the Vancouver House development and will be the first Fresh Street Market in Vancouver.

 GIVING BACK 

Through its Community Product Initiative, VINCE’S MARKET has raised more than $25,000 for local charities. A year ago, the Ontario-based grocer launched the initiative that had staff and customers at each of its four main stores identify a worthy local charity and with each flyer a new “community product” was chosen, from which 15% of

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February 2019 Canadian Grocer

the total sales of the item was set aside for that charity. Pleased with the results, Vince’s CFO and controller Giancarlo Trimarchi said the amount raised “exceeded expectations.” Organizations benefiting from the program are Uxbridge-Scugog Animal Shelter, Tottenham Food Bank, Blue Door Shelters and Doane House Hospice.

Vince’s Market’s Giancarlo Trimarchi (far left) with the 2018 recipients of the chain’s Community Product Initiative

VINCE’S MARKET, GALLERIA

Through its 12th annual Share the Love campaign, GALLERIA SUPERMARKET has raised $24,525. The Toronto-area Korean-focused grocer donated the raised funds to 19 local charities at a ceremony at its Thornhill location in January


APPOINTMENTS 

 EVENTS 

 The NGA Show 2019  will take place at the San Diego Convention Centre Feb. 24 to 27. Visit thengashow.com for more info. The Toronto Congress Centre will host  The Convenience U CARWACS Show  on March 5 and 6. For info, visit Toronto. convenienceu.ca  Seafood Expo North America  returns to the Boston Convention and Exhibition Center, running March 17 to 19. Visit seafoodexpo. com for details.  Grocery and  Specialty Food  West  will take place April 1 to 2 at the Vancouver Convention Centre – East Building. Visit gsfshow. cfig.ca The  Canadian Produce Marketing Association’s Annual Convention & Trade Show  takes place at Montreal’s Palais des congrès April 2 to 4. Visit convention.cpma. ca for details.

Sarah Davis

Mike Motz

Todd Newstead

Carla Anger

Ali Davies

Brent Falvo

Loblaw has announced that SARAH DAVIS is taking on an expanded role at the company. The Loblaw president will now oversee the company’s 13-member management board, and the finance and human resources departments will report directly to Davis. Since joining the company over a decade ago, Davis has overseen the implementation of SAP, the creation of Choice Properties REIT and the acquisition of Shoppers Drug Mart. Davis will continue to report to GALEN G. WESTON, who is now executive chairman of Loblaw Companies Limited. In other Loblaw news, MIKE MOTZ has resigned from his role as COO. Motz stepped into the position about a year ago; previously he was president of Shoppers Drug Mart. In February, TODD NEWSTEAD joins Canadian Federation of Independent Grocers as acting senior vice-president of commercial and industry relations. Newstead was previously president and CEO of Distribution Canada Inc. At Kimberly-Clark Canada, CARLA ANGER has been appointed vicepresident and general manager. Anger, a winner of Canadian Grocer’s Star Women Awards in 2016, previously held the position of vice-president of sales at Kimberly-Clark. The Clorox Company of Canada has promoted ALI DAVIES and BRENT FALVO to vice-president positions. Davies, who joined the company last summer, has been named vice-president of sales and replaces DAVE IACOBELLI, who was recently named general manager at the company. Falvo has been named customer vice-president for the company. In other company news, JIM SLOMKA, formerly Clorox Canada’s sales director, departed the company in January. MICHAEL CATALANO has been promoted to the role of director of national sales, Canada at Wonderful Sales. Catalano, a 2017 winner of Canadian Grocer’s Generation Next Awards, was previously regional sales manager at the company.

Michael Catalano


PEOPLE

 Who you need to know  

The Facts Who?

Ian Walker Position

President, Left Coast Naturals/ Hippie Snacks What’s Next?

New Hippie Snacks products; building the brand in the U.S.

A FORCE FOR GOOD For Ian Walker, it’s not just about making healthy, organic snacks— it’s about making a difference By Rebecca Harris Photography by Tanya Goehring


PEOPLE

B

urnaby, B.C.-based Left Coast Naturals is a long way from Ian Walker’s hometown of Niagara-on-the-Lake, Ont. But the principles behind his natural and organic food company—to make a positive impact on people, the planet and the community— can be traced to the kitchen table in his childhood home. Walker was born into a longtime family business, an environmental services company founded by his great-great grandfather in 1887. “My dad got my brother and I really involved and we would talk a lot around the kitchen table,” recalls Walker. “We would talk philosophically about business, how to treat employees and how if you’re successful in business, that creates a responsibility for the community you work in.” While Walker knew early on that he wanted to make a difference, he didn’t exactly set out to be a trailblazer in the natural snack space. After graduating with a commerce degree from Dalhousie University in Halifax, Walker travelled around Asia and Australia, and settled in Vancouver in 1995. Jason Dorland, an acquaintance, was working on a graphic design project at Emily Carr University of Art and Design and came up with a line of fictional nut butters called Skeet & Ike’s. Walker created a three-page business plan and the pair decided to actually make the product and see how it sold. They worked day jobs and made nut butters in a commercial kitchen at night. On weekends, they sold their products at Granville Island Market and retail stores quickly became interested. About six months into it, Walker and Dorland decided to pursue Skeet & Ike’s full time. “Jason was a vegan Olympic athlete and I was a bit of an environmentalist, so the organic, natural movement resonated for both of us,” says Walker. As more retailers came calling, the partners started their own distribution business, Left Coast Naturals, and began distributing their own products as well as others. In 1998, Walker became sole operator after Dorland (who was still an owner until 2015) left to become a teacher. In 2005, the company launched Hippie Snacks, an organic line that’s grown to include various flavours of coconut

clusters, seed and nut clusters, granola, coconut chips and the newly launched crisps in cauliflower and avocado varieties. Hippie Snacks are sold at grocery and natural food stores across Canada and the Western United States, as well as at Starbucks. On the distribution side, Left Coast Naturals now distributes around 30 organic and natural food brands to more than 500 stores across Canada. The company plans to continue to grow its distribution side and build out the Hippie Snacks product lineup. In addition to the new crisps, the brand is launching new vegetable snacks in the coming months. Expanding Hippie Snacks’ presence in the United States is also part of the plan, but the company is working on building a strong consumer base on the West Coast first. Sustainability is at the core of Left Coast Naturals. In 2011, it became a certified B Corporation—one of the first Canadian companies to do so. Its environmental initiatives include minimizing waste and packaging, using renewable energy and choosing suppliers that have strong environmental ethics. Left Coast Naturals also has high standards for the products it distributes and requires all food products to be non-GMO. On the people front, employees are given cash incentives for things like cycling or walking to work, taking public transportation and buying organic groceries. Every year, Left Coast Naturals donates 5% of its profits to community projects that have a positive impact on the environment or youth. This has all led to many accolades over the years including, most recently, the 2018 EY Social Impact Entrepreneur of the Year Award for the Pacific Region featured in BC Business magazine. Asked what is his secret to success, Walker goes back to those formative kitchen table conversations. “We had discussions about what really matters in life,” he says. “First, you have to define what success is, and there’s not a universal definition of success. There’s probably a stereotypical one, which is build a huge business and sell it for lots of money. And I don’t really think that way. I think the most successful people are those who have a positive impact on people and on society.”  CG

30 SECONDS WITH...

IAN WALKER What do you like best about your job?

Working in an area that I’m proud of, that I’m passionate about and that I enjoy. Another great part about my position is that I get to impact people positively. I always take that as an honour.

What’s the biggest challenge of being an entrepreneur?

The obvious one is balance. And I’ve swung both ways: I’ve worked too hard, I’ve worked not enough. So finding the right balance in how I operate the business and how involved I am has been a challenge.

What’s the best business advice you’ve ever received?

One piece of advice I got early on was: if you’re not doing really well in your own backyard, don’t sell anywhere else. That’s why we’ve mostly played in Western Canada. I never built this to be a massive business. I built it to be a good business.

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

Enjoying the outdoors and spending my time with my kids. That’s what matters. As a business leader, that’s one way I try to be different with my staff, recognizing that their job at Left Coast is not the most important thing in the world. It’s great, but what goes on in their lives and with their families is the most important, so I try to live that way myself as well.

February 2019 Canadian Grocer

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Since the 1960’s Kraft Peanut Butter has been proud to hold a place in the pantries of Canadian homes, making us Canada’s favourite peanut butter. Spreads Brand Equity Kraft Peanut Butter Brand A Brand B Brand C Store Brand Brand D Brand E Brand F Brand G Brand H

59.5% 15.0% 5.8% 3.8% 3.6% 2.5% 2.0% 1.9% 1.4% 1.3%

Ipsos BVC Brand Health Study, Nov 2017

#1 brand equity in the sweet spreads category. #1 loyalty among consumers. #1 brand household penetration in the category. Nielsen All Channel Homescan L52, period ending 29 Sep 2018


category close-up

peanut As a source of plant-based protein, good fats and essential nutrients, peanut butter packs a powerful punch

butter

Peanut butter has been a pantry staple for decades, but it’s never been more on trend than it is today. 1. Protein Power: Canada’s new Food Guide encourages Canadians to choose healthy proteins, including peanut butter. The Guide also emphasizes putting more plant-based proteins on the plate, and peanut butter is a perfect fit. Although many people think peanuts are nuts, they’re actually a legume! In addition to protein, peanut butter contains important nutrients such as vitamin E, folic acid, niacin, thiamine and magnesium. 2. Health-Conscious Consumers: Peanut butter is high in healthy fats and is a good source of fibre. This makes it suitable for Canadians who are following a low-carb or ketogenic diet, or for anyone wanting to eat healthier fats. Health-conscious consumers are also interested in “clean” ingredient decks. Grocers can grow category sales with Kraft’s Only Peanuts—all-natural peanut butter made with 100% roasted peanuts, available in Smooth and Crunchy as well as flavours such as Sea Salt and Honey.

Spreading The Love Kraft is also a brand that gives back. Since 2016, Kraft Peanut Butter has supported the SickKids Foundation on finding a cure to food allergies and has donated $400,000 to date.

3. The Rise of Flexitarians: There is a growing number of Canadians who are restricting or eliminating meat from their diets. A recent study found that 42% of flexitarians are baby boomers and 63% of vegans are under the age of 38. To get the protein and fat they require, flexitarians turn to foods such as nut butters, so once again, peanut butter is right on trend.

The Scoop On Sales Peanut butter dominates the spreads aisle with $260 million in annual sales, according to Nielsen. Regular stabilized peanut butter is the large majority (81.5%) of category sales, while natural peanut butter is the second largest segment. Peanut butter is a staple of Canadian pantries, with 75% household penetration. As Canada’s favourite peanut butter, Kraft Peanut Butter holds the number-one spot for brand equity in the sweet spreads category (61.5%) and has the highest household penetration in the category.

Special promotional feature in Canadian GroCer–feBruarY 2019


CANADA’S LEADING TISSUE MANUFACTURER HONOURED TO BE RECOGNIZED FOR OUR LEADERSHIP

krugerproducts.ca ©2019 All ® Registered and ™ trademarks of Kruger Products L.P. ®’Registered trademark of Kimberly-Clark Worldwide, used under license.


IDEAS

Retailers, suppliers, shoppers, insights

FOOD WASTE

GETTY IMAGES/SNYFEROK

What a waste! Nearly 60% of food produced in Canada is wasted, says a new study. Time to rethink how we value food By Shellee Fitzgerald

I

t’s hardly news that Canada is wasteful; in fact, we’ve long been told we’re

among the world’s worst offenders when it comes to food waste. A new report, however, reveals the shocking extent to how wasteful we really are. “We waste more food in Canada than we consume,” said Lori Nikkel, ceo of Second Harvest, the food rescue organization that partnered with Value Chain Management International (vcmi) on the year-long study into the issue of food waste. According to The Avoidable Crisis of Food Waste report, 58% of the food produced in Canada is lost or wasted. While some of that is waste that can’t be helped, Nikkel said about 32% of lost and wasted food is avoidable and could be rescued. Put another way, each year 11.2 million metric tons of food is unnecessarily lost or thrown away. “That’s enough food to fill a freight train that stretches from Ottawa to past Winnipeg,” Nikkel told reporters in January. The value of this wasted food is pegged at a whopping $49 billion. February 2019 Canadian Grocer

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IDEAS According to the report, Canadians have become accustomed to an abundant supply of food, causing us to dismiss its intrinsic value. “We need to radically change how we value food,” said Nikkel, adding it is especially important to do when you consider four million Canadians are food insecure. The report also concludes that waste has become standard operating procedure for the food industry. This is a result of insufficient measurement of waste and a lack of collaboration, as well as the ease and low cost of sending waste to landfill. “Most businesses do not recognize the scope of the opportunity” when it comes to addressing waste, says Martin Gooch, ceo of vcmi and an expert on food waste in Canada. “But the true cost of loss and waste is not borne by industry and it’s not borne by consumers. It’s borne by the environment.” According to the study’s authors, avoidable food loss and waste equates to 22.2 million tons of CO2 equivalence: the same amount of emissions of all cars in Manitoba, Saskatchewan and Alberta driving for a full year. Funded by the Walmart Foundation— the retailer’s philanthropic arm—the report is the first of its kind, in that it captured primary data from across the food supply chain using a standardized measurement. The study’s authors consulted with more than 700 food industry experts including an advisory board comprised of large manufacturers and retailers such as Metro and Loblaw. The aim was to identify the root causes of food loss and waste at each part of the supply chain to come up with sustainable solutions. Among the sobering facts revealed by the report is that the bulk (79%) of food loss and waste occurs at the hands of the food industry, not in households, which are often tagged as a chief culprit of waste. “It’s time we stop blaming the consumer,” said Nikkel. While less waste occurs at retail than other areas of the industry such as production or processing/manufacturing, 12% of food loss and waste is still avoidable in this sector. And this discarded

food has a value of $5.7 billion. The study identified about 30 root causes contributing to food waste, including acceptance by the food industry that waste is a cost of doing business; conservative and widely misunderstood best-before dates that result in the tossing out of safe, edible food; pressure on producers to provide 100% on-shelf availability and aesthetic perfection, particularly with produce, leading to overproduction; and industry reluctance to donate safe surplus food. At retail, specifically, barriers to donating the 1.31 million tons of avoidable food waste comes down to confusion and lack of consistent public health regulations to determine when food is safe to donate, resulting in edible food going to landfill. Also, there’s the perceived cost and complexity of donation—you need resources (labour) to prepare food for donation, whereas shipping discarded food to landfill is cheap and easy. Liability concerns were also cited as a reason for not donating food. What’s the solution? According to Gooch, there are three strategies: “Measure, lead, enable.” Measure what’s going on in your operation; lead by driving changes in business practices; and create an enabling environment for motivating and supporting industry, consumers and others to reduce food loss and waste wherever possible. The report provides a timeline for actions that industry can do now (2019), do soon (2020 to 2021) and for building a plan for 2022 and beyond. The actions range from engaging employees in redistribution initiatives to establishing collaborative planning, forecasting and replenishment programs, as well as investing in infrastructure and tech upgrades to enable further waste reductions. “There is absolutely no reason that we cannot and should not drastically reduce our food loss and waste that occurs in this country,” said Gooch. “It requires concerted, collaborative effort at all levels of industry. We all have a responsibility to play in that.”

“The true cost of loss and waste is not borne by industry and it’s not borne by consumers. It’s borne by the environment” 14

February 2019 Canadian Grocer

POLL RESULTS

UNDER PRESSURE

What keeps you up at night? In the day-to-day operation of a grocery business, we know there are myriad concerns, both new and old, that might be preventing you from getting a good night’s sleep. But what are the top pain points in your business?

We asked readers on CanadianGrocer.com:

What’s your biggest concern for 2019?

13% 14% COMPETITION

KEEPING PACE WITH TECHNOLOGY

21%

STAFF RETENTION/ LABOUR COSTS

23% ECONOMIC UNCERTAINTY

29%

ALL OF THE ABOVE


ication is our recipe d e D ess is your story c c u S

Trust us with your name naturestouchfrozenfoods.com


IDEAS

Canada’s Food Guide There’s been a lot of fuss over the new Guide. Here’s a quick look at the changes and the industry’s reaction By Carol Neshevich WHAT’S IT ALL ABOUT? The first official government food guide for Canadians was introduced in 1942 to offer nutritious eating guidance during an era of wartime rations. While it has evolved over the decades, its advice has come to determine how healthy eating is taught in schools and what gets promoted by health professionals. BIG CHANGES The new Canada’s Food Guide, released in January 2019, has some significant changes from previous versions including: • it was strictly shaped by “evidence-based science” (no input from industry) • it’s no longer about “four food groups”: it simply recommends vegetables, fruit,

whole grains and protein foods should be consumed more regularly; and among protein foods, people should consume plant-based foods more often • it recommends water as the beverage of choice • it suggests Canadians limit their intake of “highly processed foods” • it goes beyond recommending what people should eat, and suggests how people should eat: cook more often, enjoy your food, and eat with others WHY DOES IT MATTER ANYWAY? With all the hubbub over the new Food Guide, one might wonder: what impact does it have on everyday life? “The document is influential in many ways,”

says Sylvain Charlebois, professor of food distribution and policy at Dalhousie University. While Canadians aren’t exactly consulting the guide on a daily basis, he says, most adults do clearly remember learning the Guide’s four food groups in school. “As we institutionalize a new message across the curriculum, behaviours will change. Or at least the way we make food choices will change over time.” Charlebois believes it will eventually affect retailers. “Likely not early on, but over time … Some [grocers] will put plant-based options right next to products containing animal proteins,” he says, adding, “I suspect grocers may change store layouts just so consumers can find their proteins and fibres.”

INDUSTRY REACTION

Plant-Based Foods of Canada PBFC was, of course, pleased. “The changes we’re seeing in the updated Canada’s Food Guide reflect a broader societal trend towards greater consumption of plant-based foods,” said Beena Goldenberg, CEO of Hain Celestial Canada (a member of PBFC). Dairy Farmers of Canada With dairy’s diminished role in the new Guide (it was previously its own food group, whereas now “lower-fat” dairy products are simply listed as recommended proteins), DFC had concerns, including the focus on only lower-fat dairy.

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February 2019 Canadian Grocer

“Current and emerging scientific evidence does not support a continued focus on lower-fat milk products as it reveals that milk products that contain more fat are not associated with harmful health effects and could even provide benefits,” said Isabelle Neiderer, director – nutrition & research at DFC. Food & Consumer Products of Canada FCPC praised parts of the new guide, but took issue with what it perceived as a vilification of processed foods. “Categorizing food as ‘highly processed’ unfairly vilifies food that can be part of a healthy diet and that many Canadians rely upon as a convenient, affordable, safe and nutritious option,” said Michi Furuya Chang, FCPC’s senior VP, public policy & regulatory affairs. Canadian Produce Marketing Association CPMA was happy with the focus on fruits and veggies. “CPMA has long been advocating for increased consumption of fresh fruits and vegetables,” said CPMA president Ron Lemaire.

GOVERNMENT OF CANADA

Canada Beef Canada Beef spokesperson Joyce Parslow said although the organization is pleased to see beef listed as a healthy protein option, “We can’t forget each of those [protein] foods has their own unique nutrition contributions. Proteins aren’t all created equal: beef is a powerhouse of heme iron, which is the most available iron, and you’re not going to get that with pulses or beans in the same way.”


Nominations open for 2019 NEW THIS YEAR! 3 AWARD CATEGORIES TO ENTER: Senior-Level Stars Rising Stars Store-Level Stars

NOMINATIONS CLOSE MARCH 29 2019

To nominate and for full award details, visit: StarWomen.ca GOLD SPONSORS

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PRODUCED BY


Putting the peas in podcasting A handful of food industry players are exploring the growing space. Compelling content is key to attracting repeat listeners  By Chris Powell TRUE CRIME, COMEDY, sports and pop culture are all mainstays of the more than 630,000 podcasts that soundtrack our daily commutes and gym workouts. But the Canadian Produce Marketing Association (cpma) believes some people want to hear about bok choy as much as they do Bird Box. Ian Brodie, manager, education with the Ottawa-based organization, says the average episode of Produce Talks garners more than 1,500 downloads across the cpma website, iTunes and Google Play. The cpma is among a handful of grocery and grocery-affiliated organizations throughout North America dabbling in podcasting. Their involvement comes as the medium enjoys explosive growth. According to the Canadian Podcast Listener 2018 report, 26% of Canadian adults—52% of them in the coveted 18 to 34 demographic—were monthly podcast listeners last year, up from 24% in 2017.

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February 2019 Canadian Grocer

“People are spending time with the medium,” says Paul Briggs, a senior analyst covering the Canadian market for research firm eMarketer. He adds that the “intimacy” of the format is attractive to marketers. Brand-produced podcasts like those from the cpma are also on the rise, although Briggs says brands should resist the urge to fill each episode with promotional messaging. Instead, the focus should be on compelling content that will attract repeat listeners. The cpma has produced more than 60 episodes of Produce Talks. They feature titles that range from the saucy (“Some Like It Mashed”) to the matter-of-fact (“Ethnic and Exotic Produce”) to the slyly clever (“Between 2 Chairs 2018,” a nod to actor Zach Galifianakis’s popular online show Between Two Ferns). Brodie says Produce Talks enables the CPMA to reach a new audience. “[It] was launched to share knowledge and experiences with

a wide audience that we couldn’t typically reach with more traditional means of communication,” he says. Future episodes of Produce Talks will cover the new Canada’s Food Guide, the new Safe Food for Canadians Regulations, as well as new technology and innovations impacting the industry. For now, Canadian grocery retailers are largely absent from the space, although Hamilton, Ont.-based natural food store Goodness Me! has produced 54 episodes of its weekly Honest to Goodness podcast since it debuted in 2017. Goodness Me! bills Honest to Goodness as “a podcast about life and wellness, and the balance between the two.” Featuring Goodness Me! founder Janet Jacks and her daughter Emily, Honest to Goodness’s 30-minute episodes talk about everything from food trends and low-carb diets to bone broth tips and food waste, all in an informal manner. In the United States, meanwhile, Giant Food supermarket just launched Nutrition Made Easy, a biweekly podcast led by the chain’s dietitians and nutritionists. Walmart and Trader Joe’s have been dabbling in the format as well. Described by one U.S. writer as “the new podcast we didn’t know we needed,” Inside Trader Joe’s features interviews with employees throughout the company, from the executive vice-president of merchandising all the way up to CEO. It talks about a range of Trader Joe’s-related topics, from the company history to how it brought some of its most beloved products to life. According to a Fast Company report, the Trader Joe’s podcast has proved “weirdly popular” on iTunes, climbing to as high as No. 3 on Apple’s podcast chart. Its success led U.S. food tech blog The Spoon to fret that its popularity would spawn spinoffs like The Safeway Show or Kroger’s Korner (neither company currently offers a podcast). The key to Inside Trader Joe’s, wrote The Spoon’s Chris Albrecht, is that it’s completely on-brand for the retailer, whose combination of quirkiness and interesting products has created legions of cult-like fans. “Anyone else trying to copy the success of this podcast will just be trying too hard, and it will inevitably not work,” he wrote. In other words, people will be able to see through marketing masquerading as content, even if they’re blindfolded. CG

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The Perfect Mix & Match similar to wine pairings, each lemon variety has a predominant flavour profile that pairs with certain foods and beverages. “our in-depth customer testing revealed that with simple education about (these) flavour profiles, consumer sales show great growth in the produce category,” said John chamberlain, Vice president of Marketing. Limoneira’s Mix & Match trio promotion runs through May and features three lemon varieties - classic lemons, Meyer lemons and pink lemons - in one colourful, stand up, re-sealable bag. impactful displays, merchandising and recipes for each of the varieties are also available to retailers.

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SHOPPER SENSE

Carman Allison

CLEAN SWEEP

Canadians spend more than $2 billion annually on household products. Let’s take a closer look at the opportunity IT IS HARD TO believe right now, but warmer weather really is just around the corner! For consumers, this means it’s time to break out the brooms and cleaning products and get ready for spring. Cleaning can feel like a thankless job, but there’s a wide array of cleaning products to freshen homes as the season changes, ranging from standard cleaners to ecofriendly and organic products, to fit consumer preferences. And turning over a cleaner leaf is no small affair: consumers in Canada spent nearly $2.3 billion on household products alone in the last year (and that’s not including paper products such as paper towels).

accompaniments at nearly $79 million. But clothes aren’t the only thing consumers are keeping clean. Household cleaners have annual sales in excess of $172 million and boasted the largest dollar volume increase over the past year (+4%) among the top 10. Along with household cleaners, laundry detergents (+3%), laundry care accompaniments (+3%) and dishwashing products (+3%) led product growth by dollar sales. G row th , h owever, i s n ’t evi den t across all products. Sales of bathroom cleaners, for example, have remained flat (0%) over the past year. For marketers, distinguishing the benefits of bathroom-specific cleaners over standard household cleaners may help expand s a l e s i n t h e c a t e g o r y. So what factors are affecting sales? As we’ve seen across the store, consumers are growing increasingly conscious about their health and the environment when it comes to product selection, and household cleaning products are no exception. In fact, 49% of consumers say environmentally-friendly packaging is important to them when purchasing a household cleaning product, along with 43% who indicate organic/natural ingredients are important and 41% who desire packaging made from recycled materials. As consumers weigh the benefits of going green with product effectiveness, they’re also minding their wallets. Notably, 69% of consumers say they

Consumers are growing increasingly conscious about their health and the environment when it comes to product selection, and household cleaning products are no exception Across the variety of products in the household product arena, it should come as little surprise that laundry products are top sales drivers, with three different product variants appearing in the top 10 selling household products. Laundry detergents led sales in the household product category with $653 million in sales in the last year, with fabric softeners at $243 million and laundry care

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February 2019 Canadian Grocer

perceive organic cleaning supplies to be more expensive, and only 20% say they’re willing to pay more for green/ eco-friendly choices. To help offset consumer perceptions and raise product awareness, marketers and retailers can develop in-store signage and marketing campaigns that demonstrate green/ecofriendly effectiveness. Additionally, concerns about product efficacy may be holding consumers back, with 29% of consumers indicating that eco-friendly options are not as effective as regular products. As well, 31% of consumers have purchased eco-friendly products but say they prefer regular products, and some consumers (20%) prefer to make their own cleaning products. But all hope is not lost: 38% of consumers still prefer to purchase eco-friendly products and 15% are willing to sacrifice effectiveness for an eco-friendly option. And, of course, there are other factors that are influencing consumer purchase decisions that retailers and manufacturers should take note of. One-quarter of consumers, for instance, are influenced by their family and friends, while 19% are swayed by packaging claims and 17% are motivated by store signage, brochures and displays. With the overall household product category seeing increased sales of 2% in the last year, cleaning is still top of mind for consumers, even as recent consumer confidence research highlights that many consumers (52%) have changed their spending to decrease household expenses. In the fiercely competitive fast-moving consumer goods market, successful retailers and manufacturers may benefit from marketing campaigns that distinguish their products’ benefits from the competition.  CG

Carman Allison is vice-president of consumer insights at Nielsen in Toronto. @CarmAllison.


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EATING IN CANADA

Kathy Perrotta

ARE YEMPS ON YOUR RADAR? Young educated millennial parents are a large group that’s influencing eating habits there is no doubt that becoming a

parent influences an individual’s needs, priorities and food choices—perhaps more than any other life milestone. Thus, as a growing segment of millennials approach parenthood, this segment’s eating and drinking decisions will be critically important to the future of food purchasing and consumption. As with most generations, cultural, social and economic forces have impacted and shaped the millennial perspective on parenting. Millennial parents now represent 12% of the population (versus 8%

tainability, yemps are actively engaged and mindful of making good decisions for themselves and their young families. In the Canada chats 2018 Trends Report, Ipsos looked at the differentiating needs and habits within this growing population segment. Here are some factors to consider: GENDER-NEUTRAL ROLES With more than three-quarters (78%) of millennial parents in the workforce full time, shopping, meal preparation and cooking duties are often shared between both parents. According to chats, almost half (49%) of principal grocery shoppers in these households are male, and males engage in the preparation of more than a third of all meal occasions (38%). CHILDREN ARE THE PRIORITY yemps prioritize the needs and wants of their kids by increasingly engaging and involving them in meal decision-­m aking activities rather than dictating food choices. SNACKERS & EXPERIMENTERS Given the voracious snacking behaviour of kids under the age of 13, it is not surprising that their parents are nibblers as well, exposing a significant opportunity to target snacking. yemps are also over-developed in their desire for something new, different and authentic. SOLUTION-ORIENTED FOCUS A l t h o u g h yemps regularly report time constraints in deciding what to eat, they do engage in their fair share of “scratch” cooking.

yemps prioritize the

needs and wants of their kids by increasingly engaging and involving them in meal decisionmaking activities rather than dictating food choices in 2014) and the sheer size and sphere of their influence is expected to more than double over the next decade. As a group, millennial parents are highly educated and information-driven. Simply put, young educated millennial parents ( yemp s) place a greater value than previous generations on “knowing.” Whether it’s researching how their food is produced, knowing what’s new and trendy, or a commitment to sus-

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February 2019 Canadian Grocer

A share of these homemade meal preparation habits can be tied to batch cooking—one-time preparation to support multiple eating occasions. This growing segment is also over-developed when it comes to leveraging meal kits and visiting restaurants. Though convenience is a main driver of item choice, yemps’ appetite for quick and easy solutions is equally matched by their unwillingness to sacrifice other priorities associated with a growing list of dietary restrictions and sensitivities. CONSCIOUS CHOICES yemps’ food and beverage choices emphasize premium items with high quality, fewer and simpler ingredients, and a focus on fresh. yemps are also over-developed for consumption of organic items, particularly where there is a presence of very young children. DIGITAL INFLUENCE Almost half of yemp decisions (49%) about how to prepare a food or beverage item are sourced online, led by mobile access. Digital behaviour influences a third of yemp decisions about what to eat and drink, again confirming the importance for industry players to have a digital presence. yemps today demand a higher-quality experience than what they grew up with, for both themselves and their children. These millennial parents are elevating the importance of foods in everyday life, prioritizing discovery, sharing and wellness benefits. While companies should make sure to keep all demographics in mind when marketing and designing products and services, yemps are a huge cohort and an influencer group of consumers who are not only shaping choices for future generations but are also increasingly setting the bar for other generations’ habits around them.  CG

Kathy Perrotta is a VP of Marketing with Ipsos Canada and leads the FIVE service, a daily diary tracking of what individuals ate and drank yesterday across all categ­ories/ brands, occasions and venues. Kathy.perrotta@ipsos.com


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CONSUMER SHIFTS

Joshua Levi

AN UNDERSERVED DEMOGRAPHIC

Grocers risk leaving money on the table if they don’t do more to appeal to older consumers CANADIAN GROCERS ARE sensitive to certain changing demographics. As the Canadian population has grown more diverse over the last few decades, grocery stores have gone out of their way to add to their lineup of ethnic foods, carving new aisles into their precious real estate to serve this lucrative market. Catering to an increasingly diverse market is smart business planning, yet grocers and consumer packaged goods companies arguably haven’t made the same effort in response to an even larger

their spending power. Between 2000 and 2016, the population aged 55 and over saw its share of the total income of all Canadians jump from 24% to 36%. This trend will continue to increase as the older population grows. In addition, the average net wealth of the population aged 55 and up is now close to $1 million, which is well above the net worth of the younger population. Engaging this cohort can be a challenge. Just as it is wrong to assume all millennials are alike, it’s a mistake to stereotype and overgeneralize about boomers; this is a diverse group with particular tastes that change depending on where they live. To illustrate how diverse this cohort is, consider the differences between two segments we’ll call empty nesters and heartland retirees. Empty nesters are suburban, upper-middle income households consisting of married couples over age 55 whose children have flown the coop. Most often you’ll find them wandering the aisles of Safeway, Sobeys and Real Canadian Superstore. They respond to positive messages about taking control of one’s long-term health. Heartland retirees, on the other hand, are middle-income retirees mostly found in rural areas in unpretentious detached houses and mobile homes. When stocking their fridges and pantries, they tend to favour banners like Foodland and Freshmart. The most effective way to engage these particular boomers would

For all the talk about courting younger consumers, research shows boomers are a high value segment that’s being somewhat ignored demographic shift that is already well underway: the aging population led by boomers. For all the talk about courting younger consumers, research shows boomers are a high value segment that’s being somewhat ignored. One in three adult Canadians is already over the age of 55 and that ratio will continue to rise as more boomers inch closer to retirement. Within the next 20 years, boomers will account for almost half of all Canadian households. But the rapid growth of boomers isn’t even their most alluring feature—it’s

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February 2019 Canadian Grocer

be to appeal to their sense of adventure and love of all things outdoors. Given the diversity within the boomer generation, it’s important to consider the type of boomer that is most relevant to each store, since it will shape everything from the message you use to engage them to the foods and brands you want to promote. For instance, with a strong commitment to living a healthy lifestyle, empty nesters are more likely to stock up on national branded products. Emphasizing the healthy qualities of these and other products could go a long way to help drive sales. The more rugged heartland retirees, meanwhile, are more value conscious than brand driven and typically gravitate to private-label products. But perhaps the best way to serve the aging population is to focus less on what they put in their carts and concentrate on how they shop. Generally boomers, regardless of the segment they belong to, want a hassle-free shopping experience with products easier to reach, labels that are easier to read and packages that are easier to open. Grocers may also want to consider other incentives to appeal directly to boomers, such as promoting seniors’ days and offering special discounts to those over age 55. If your store happens to be near a high concentration of empty nesters, try tweaking flyers and in-store displays to highlight health products. As for grocers serving heartland retirees, their love of the great outdoors also suggests they’re less into crowds so gearing in-store promotions around off-hours may be the trick to winning more of their business. When grocers noticed the face of Canada was changing, they responded by adding more ethnic foods to their shelves. It’s time they respond to the aging demographic the same way.  CG

Joshua Levi is a vice-president at Environics Analytics who focuses on the grocery sector and consumer packaged goods.


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category close-up

greeting

cards Despite the ease of e-messaging, paper greeting cards remain a popular way to connect and develop relationships. And a well-positioned greeting card aisle can help get shoppers to add a card to their grocery basket.

The personal touch Premium cards and messages that reinforce strong relationships are top trends in the greeting card category this year, says Rod Sturtridge, president of Carlton Cards, Canada’s number one greeting card company. We asked him to share his insights on exciting developments in the category.

What is the state of the greeting card industry? While many consumers have embraced the digital age, sales show that the authenticity of hand-selecting a greeting card and writing a personal note for the recipient is a timeless tradition. In fact, millennial consumers buy more cards, on average, than some of the older generations. We continue to invest in the evolution of our products to ensure our cards speak to all generations and lifestyles. We work closely with our retail partners to find new ways to drive department productivity through our merchandising options and robust portfolio of brands.

using tools like greeting cards, will benefit us all in our quest for wellness. Our talented team is working to bring thoughts of wellness to the greeting card aisle and soon we will share more exciting news with our retail partners!

How can grocers boost sales in the greeting card aisle? Adding a single greeting card to the average grocery basket significantly increases basket profitability. Our research shows 77% of impulse greeting card purchases are triggered by seeing the card department. This reinforces the importance of well-positioned, prominent departments and well-positioned outposting. Our team can recommend the optimal size and mix for our grocery partners’ stores based on our robust analytics. Beautifully designed cards that convey the importance of connection and relationships but in a fresh new voice.

Which consumer trends drive category performance? The premium card category continues growth at a rapid pace and we have seen terrific success at grocery when we partner Papyrus –– our luxury premium card brand –– with our flagship Carlton Cards brand. Our Papyrus brand has a very loyal following and lovers of Papyrus will actually plan their shopping trip based on where they can find the cards! As well, Carlton Cards just launched an exciting initiative called 'Connections Build Us'. Studies show that strong relationships are one of the most important indicators of a happy and healthy life. We know our products play an important role in helping people cultivate relationships that are key to emotional well-being. Over the coming months we will work with our retail partners to highlight greeting cards as a tool for relationship care and wellness. With a new line of cards specially designed with self–care and making meaningful connections in mind, our hope is to remind consumers that connecting with people who matter and strengthening our relationships

Coming soon! Stunning new Papyrus Disney cards that capture the magic and sparkle of true love. Sure to be a top seller for the upcoming wedding season!

Special promotional feature in Canadian GroCer–feBruarY 2019


Canada’s first-ever Luxury Card Brand Masterfully crafted, opulent, little works of art with an unsurpassed brand loyalty… Papyrus is the premium brand your customers love and you’ll have the sales to prove it!

Want to know what’s next for Papyrus? Contact your Carlton Cards Representative at 1-800-663-CARD


By Shellee Fitzgerald     Photography by Mike Ford

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February 2019 Canadian Grocer


COVER STORY

the HEALTHY GROCER Goodness Me! has built its success on high standards and by serving, not just selling to, its customers

The Cambridge, Ont. location of Goodness Me! is the 10th in the chain of natural food stores, which was founded by Janet Jacks nearly 38 years ago

OUTSIDE IT’S A FRIGID JANUARY MORNING IN SOUTHERN Ontario, but inside Goodness Me! the atmosphere is warm and inviting. Decked out in a fire-engine red blazer, Janet Jacks smiles widely as she moves through the store making herself both available and easily identifiable to customers who she stops to chat with, offer recommendations to, and share her vast knowledge on healthy living. It’s something Jacks is completely comfortable with—it’s been part of her routine since opening the first Goodness Me! in Hamilton nearly 38 years ago. On this day, we’re at the newest Goodness Me! Natural Food Market, a 16,000-sq.-ft. location, which opened its doors in late November on a busy commercial strip in Cambridge, Ont. The bright and meticulously tidy store has the distinction of being the 10th in the natural food chain’s network. Jacks admits she never envisioned the brand would one day expand to 10 stores. Neither herself, a teacher, or her husband Scott, a banker, had any grocery experience when they plunged into the business all those years ago. “We had no expectations or plans—we thought it would just be a little business our family would run.” While still a family business—son Mike is now the owner and Jacks herself remains heavily involved in the educational areas of the business—it’s not such a “little” operation. The 10 stores are dotted around Ontario’s Greater Golden Horseshoe serving cities like Barrie, Mississauga, Waterloo, and Hamilton, where it is based and from where the online business also operates. And at a time when some retailers February 2019 Canadian Grocer

29


COVER STORY continue to struggle, Goodness Me! is looking to expand, potentially doubling its current store count over the next five years. “We’re continuing to look for locations,” says Mike Jacks. “It’s certainly our intent to grow as the market demands and supports.” According to Nielsen research, growth at specialty stores, including ethnic and health food stores, is outpacing that of conventional grocers. Recognizing growing consumer interest in health, grocers of all stripes have sharpened their focus on serving health-conscious consumers over the past few years, but at Goodness Me! it’s the raison d’être. Jacks’ passion for nutrition was spurred early on by a desire to keep her young family healthy, and she spent years educating herself on how to make smarter food choices. Through Goodness Me!, Jacks found a way to share the knowledge she was amassing. Helping educate consumers on how to eat and live healthier is something the company has taken seriously since day one. Today, most stores are equipped with a classroom where classes and workshops take place every day of the week on topics ranging from gut health to vegan cooking to kombucha brewing and how to kick sugar. Jacks’ own Lifewatchers healthy eating program, which she launched 20 years ago, is also offered. Today, the Cambridge classroom, which seats 80, is at capacity with customers travelling from as far as Toronto (about 90 minutes away) to take in a free class on eating and living well led

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February 2019 Canadian Grocer


by author/holistic nutritionist Joy McCarthy. While the classes are a big investment in terms of time and energy, Jacks says they’re critical. “There’s too much information out there today and a lot of conflicting information so people do not know how to find their way. Our goal is to help.” Also to help customers along their “health journey,” the stores offer things such as “keto crawls” where Goodness Me!’s experts walk customers through the stores highlighting products that work with the diet. It also has specialized staff including nutritionists (which it calls Healthy Living Advisors) at each store to help customers navigate the world of natural health. Other efforts to educate consumers come via Goodness Me!’s free magazine Nourish, as well as the Honest to Goodness podcast where Jacks and daughter Emily serve up health and lifestyle advice each week. “Our purpose is to help people live longer, happier lives,” explains Jacks. “In everything we do, that has to be the purpose—so in the staff we hire, the knowledge that we want them to have and in the products we carry.” Jacks says Goodness Me! “walks the talk” when it comes its product offering. Signage in the store proclaims “If it’s healthy it’s here.” This means everything is 100% certified organic in the produce department; meats sold in the store are responsibly-­ raised from local producers (it has just struck

a partnership with VG Meats of Simcoe, Ont. for its new Goodness Me! private-label meat line, for instance); the seafood on offer is sustainable; and prepared foods contain no “funny fats” or nasty ingredients. With packaged goods, a team is tasked with scrutinizing product labels ensuring the items meet Goodness Me!’s standards. “The No. 1 thing that differentiates us is our standards,” says Mike Jacks, admitting that the rigour with which they apply them can sometimes frustrate vendors. “We won’t take on products, even products that could be viewed as natural health products, if they don’t meet our ingredient standards. I think for the customer it creates simplicity, clarity when they’re in the store, where they can have confidence about what they’re purchasing.” While not the easiest path for a grocer to take, the uncompromising approach is working for the retailer, which has held its own when up against tough competitors both from traditional grocery as well as other natural food stores. “When we opened Goodness Me!, my husband said to me we will run this business with integrity or we will close the doors,” says Janet Jacks. “And that has been our purpose. It means treating your suppliers right, always telling the truth to your customers, and it means not being there to sell them something, but to serve them.”  CG

Everything is 100% certified organic in Goodness Me!’s produce department, and all packaged goods must meet the store’s strict ingredient standards (Opposite page): The classroom in the Cambridge store seats 80; shoppers can take a variety of nutrition-related classes throughout the week Local vendors sampling their wares is a common sight at the store Kombucha is available on tap at the Cambridge location. Customers can buy it by the cup or by the growler

February 2019 Canadian Grocer

31


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GENE-EDITED FOODS: COMING SOON, BUT WILL CONSUMERS BITE? How shoppers react to the next generation of biotech foods could come down to pr By Rebecca Harris      Illustration by Sébastien Thibault

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February 2019 Canadian Grocer


GENE-EDITED FOODS

February 2019 Canadian Grocer

35


GENE-EDITED FOODS

IN THE GROCERY STORE OF

the future , consumers might shop for tomatoes with the spiciness of a chili pepper, granola bars made with trans-fat free soybean oil, mushrooms that don’t turn brown, and bread made with low-gluten wheat flour. It’s not the stuff of science fiction, rather the next generation of biotechnology: gene editing. How is it different from genetically modified organism (gmo) technology? With gene editing, scientists can make precise changes to the dna of a plant, animal or other living organism, without necessarily introducing genes from another species. For example, a gene-editing tool called crispr-Cas9 can be used to slow down the browning of products like mushrooms and potatoes by “switching off” the gene that causes browning. gmo technology typically inserts foreign genes from one organism to another to introduce a new trait, making them “transgenic.” For example, some types of gm corn are mixed with bacterial genes for built-in resistance to pests or herbicides. While gene editing isn’t new, new technologies like crispr have made the method cheaper and easier to use, and have expanded the range of what can be done. As a result, a number of new developments have made headlines in recent years. In the U.S., biotech firm Calyxt said it has already planted gene-edited soybeans that produce oil able to withstand high cooking heat without producing trans fats. It’s also developing low-gluten and high-fibre wheat. At Penn State University, a researcher developed an anti-browning mushroom said to have a longer shelf life that resists blemishes caused by

36

February 2019 Canadian Grocer

handling or mechanical harvesting. And in Brazil, researchers are working on developing spicy tomatoes by “switching on” the genes that produce capsaicinoids (the compound that makes chili peppers taste hot), which already exist in tomatoes. Proponents of gene editing believe the technology will revolutionize the food industry, saying it can boost nutrition, improve food production, reduce food waste and protect plants from harmful viruses. But for many consumers, the perception of gm foods as “Frankenfoods” still lingers. After years of consumer confusion and controversy over gmos, will shoppers accept gene-edited foods, or view it as just another scary science? “I think there is an opportunity for a different conversation here,” says Ian Affleck, vice-president of plant biotechnology at Ottawa-based Croplife Canada, a trade association representing plant science companies. He explains that the first wave of plant-breeding innovation through gmos was focused more on the benefits to farmers, such as environmental benefits, rather than consumers. “But those [benefits] are hard to—pardon the pun—sink your teeth into,” says Affleck. “I think when the consumer is closer to the trait or benefit itself, it will help them be more interested in the technology, they’ll want to learn more and they’ll be more open to accept it. When you have something like a non-browning apple or a high-fibre wheat, now the consumer understands what these innovations can do for them, so it puts [gene editing] on a different footing.” THE COMMUNICATIONS CHALLENGE Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University, agrees the technology is starting to serve consumers better, rather than just the agriculture industry. However, conveying that to the public is not going to be easy. “Gene editing is not something most people understand, and if consumers don’t understand the technology, it will be very difficult for them to buy into it. That’s the challenge,” says Charlebois. “Market confusion is a hard beast to tackle. You have to deal with the gmo legacy that goes back 30 years now. And as soon as you mention anything that can’t be easily explained in 140 characters or less, it becomes very difficult for the industry to sell anything at all.” How Canadians react to gene-edited foods could come down to which side of the debate has the most effective public relations campaign. Stuart Smyth, an assistant professor at the University of Saskatchewan’s department of agricultural and resources economics, says more than 90% of the Canadian public has no awareness about what technologies are being used to develop plant varieties right now. “So, [consumer reaction] depends on the communications that come from the agricultural industry, talking about how these varieties are developed that have improved previous breeding technologies,” he says.


GENE-EDITED FOODS “The question is whether the environmental organizations are going to try to advocate that [gene editing] is just an extension of gmo technology and try to have it banned,” says Smyth. “But, given what I’m seeing, it’s an incredibly powerful technology. It’s just an extension of the plant breeding or mutation breeding that has been going on for 80 years.” Lucy Sharratt sits on the other side of the debate. She is a coordinator at the Canadian Biotechnology Action Network (cban), a coalition of 16 organizations that have concerns about genetic engineering in food and farming. Sharratt says gene editing is still genetic engineering and there is no distinction between gene editing and gmos. “This is about an intervention in the genome and these are new products that continue to be hidden from consumers in the marketplace,” she says. “All of the environmental, safety and social and ethical questions raised by genetic engineering as it exists in our food system are also raised by the use of these new techniques.” The question, she adds, is how successful will the biotechnology industry be in trying to reclassify gene-editing technology as non-gm with their public relations push “because there’s no reason to expect that gene-edited foods will be any less of a concern to consumers than other genetically engineered foods.”

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At present, Canadian consumers are divided on whether they believe genetically modified or engineered foods are safe. In a 2018 Dalhousie University survey of 1,046 Canadians, 37.7% said they believe genetically modified or engineered ingredients and foods are safe to eat and 34.7% think they are not. The study shows that Canadians are concerned most about gmo fish and seafood, followed by pork, beef, poultry and dairy. They are least concerned about gmo fruits and vegetables. There are mixed results on the health front too. While nearly 35% of Canadians believe that we understand the health effects of genetically modified or engineered food, more than 44% believe we do not. However, Canadians are overwhelmingly in favour of labelling, which is not mandatory for gm foods in Canada. Seventy percent of survey respondents strongly agree and 18.5% somewhat agree that gmo food and ingredients should be labelled on all packages. TO REGULATE OR NOT TO REGULATE? Andreas Boecker, associate professor, food, agriculture and resource economics at the University of Guelph, says even if consumers are aware of the difference between gene-edited foods and gmos, the technique itself won’t make a difference in terms of consumer acceptance. “When you look at the efforts of anti- gmo groups, they want gene editing to fall under the same regulations as transgenic products, or genetic modification,” says Boecker. That’s the case in Europe, where the European Union’s highest court ruled in July 2018 that gene-edited crops should be subject to the same stringent regulatory process as conventional gmos. The United States, on the other hand, is taking a hands-off approach to gene editing. Last March, the United States Department of Agriculture (usda) announced it will not regulate plants bred with gene-editing techniques. In a statement, the agency said the new techniques “are increasingly being used by plant breeders to produce new plant varieties that are indistinguishable from those developed through traditional breeding methods.” In Canada, the regulatory framework is based on the novelty of the food product, not the process by which the product was developed. All foods derived from gm organisms that exhibit a new trait, no longer exhibit a trait previously present, or exhibit a trait that falls outside the range of natural variation are considered novel foods. If a product is considered novel, a safety assessment is conducted by Health Canada, regardless of the method used to develop it (for example, conventional breeding or gene editing). In an email to Canadian Grocer, a spokesperson for Health Canada said the agency is not looking at making amendments to the regulations with regards to gene-edited foods. However, in a presentation at the Organization


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GENE-EDITED FOODS for Economic Co-operation and Development Conference on Genome Editing in Paris last June, cfia director Christine Tibelius noted: “Canada is committed to ensuring that new technologies do not face obstacles to innovation while ensuring sufficient oversight to protect public interest, and is consulting with value chain stakeholders to ensure that our regulatory system continues to perform well as new technologies emerge.” And last year, Canada was also among eight countries (including the U.S.) that issued a joint statement in support of gene editing and the prevention of unnecessary trade barriers. “Government policies must continue to foster innovation … and mitigate unintended, unnecessary barriers to the entry of agricultural products,” the statement noted. Dalhousie’s Charlebois believes Canada will eventually follow the footsteps of the usda. “We have a track record of following the usda six months later or a year later, so I wouldn’t be surprised to see our own regulators here not making a big deal about [gene editing].” THE MOVE TOWARDS TRANSPARENCY While consumer fears about gmos may still linger, what’s different this time around compared to the backlash that started decades ago is that many

IF AND WHEN THEY ARE SOLD IN STORES, GROCERS WILL HAVE A LOT TO CONSIDER, PARTICULARLY AS THE “NATURAL” FOODS MOVEMENT IS GOING STRONG biotech companies are pledging transparency. B.C.’s Okanagan Specialty Fruits is one company trying to avoid the stigma many consumers associate with gmos. The company is the maker of Arctic Apples—non-browning genetically modified apples that took 20 years to develop and began selling at limited U.S. grocery stores last year. The apples were developed using rnai—crispr technology wasn’t around at the time—which “silenced” the genes associated with browning. Arctic Apples are sold pre-sliced in “grab-and-go” pouches, and on the back of the package there’s a brief story about Arctic Apples. It opens by noting

40

February 2019 Canadian Grocer

that 40% of apples that are grown end up wasted, often due to superficial browning from bruising and slicing. It goes on to explain, “Using apples’ own genes, we simply ‘turned off’ the enzyme that makes apples brown when cut. Learn how we did it through biotechnology.” There’s a link to the company website and a qr code for more information. Grocery retailers are also provided with messaging and fact sheets so their staff can answer any questions from shoppers. “We’re very transparent about it and that’s something we believe in very strongly across the board,” says Neal Carter, president and founder of Okanagan Specialty Fruits. “We’ve always been of the belief that educating the consumer around what we’ve done here is very important, and we want every consumer who buys Arctic Apple to know what it is.” Carter says consumer reaction has been “awesome,” with research showing 92% satisfaction rates. “The consumer is pretty delighted by having a non-browning apple,” he says. “If we had started off with, let’s say, a fire-blight resistant apple, there’s nothing in it for the consumer—it benefits the grower. We always felt to get broad-based buy-in by the consumer of this technology, there needed to be a consumer benefit.” Arctic Apples were approved for sale in Canada in 2015 after a four-year approval process, and will launch here in the next few years as the company ramps up production. FOOD FOR THOUGHT FOR GROCERS Experts say we’re two to three years away from gene-­ edited foods hitting store shelves, although cban’s Sharratt believes the promises for these foods are just hype. If and when they are sold in stores, grocers will have a lot to consider, particularly as the “natural” foods movement is going strong. “We have [grocery retailers] that are talking to Canadians about how important it is to sit down together and have an authentic experience with friends and family sharing food,” says Sharratt. “And in that vision of sharing food together, we need to ask ourselves what place does genetic engineering have? What whole foods need to be protected as a space where people know they can find authentic food that hasn’t been genetically changed through this intervention in the laboratory?” Croplife Canada’s Affleck says he has a great deal of respect for where the grocery retailer is in the value chain, “wedged between consumer preference and innovation. And the two don’t always align. But I think they can see that these innovations help both farmers and processors in the value chain, as well as consumers in the future.” He encourages grocery retailers to “be open to learn about these technologies and to help educate the consumer in these technologies, so the consumer can make an informed choice on what they purchase in any store.”  CG


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ANNUAL MARKET SURVEY

HOW WELL DID GROCERS FARE IN 2018? ALL IS REVEALED IN OUR ANNUAL MARKET SURVEY

IT WAS A YEAR MARKED by a trade spat with our U.S. neighbour, rising labour costs and food safety scares (we’re looking at you, romaine lettuce!). There was much ado about the debut of Amazon Go with its ai wizardry, and we watched grocer after grocer grapple with the puzzle of last-mile delivery. It was also, of course, another year of intense competition. The impact of all of these pressures resulted in 2018 being a less than banner year for Canada’s grocers, with total sales through traditional grocery stores and convenience stores inching up to $97.5 billion in sales, a mere 0.4% increase over the previous year. It was the second-worst performance in 10 years—only 2013, which saw a 0.4% decline, did worse. As in past years, our Market Survey reveals some interesting regional stories. Quebec fared the best among the provinces, ringing up sales growth of 2.6%, matching the growth it achieved in 2017. Atlantic Canada recovered from its 9.1% plunge in 2017 (the result of store closures and a slow economy) and saw its sales grow 2.5% last year. Alberta also fared better in 2018, with its sales growing 1% in contrast to a 6.8% decline in the previous year. In the country’s biggest, most competitive grocery market, however, things were less positive with Ontario seeing a sales decline of 1.8% in 2018. In the West, British Columbia also saw sales dip slightly by 0.1%. Canadian Grocer’s Market Survey is an annual look at the traditional grocery industry—and by that we mean chain and franchise supermarkets,

By George Condon

10-YEAR FOOD STORE SALES

TOTAL SALE S

CHAINS

I N D EPEN D EN T S

($000)

% change

($000)

% of total

($000)

% of total

2009

82,340,768

3.9

49,370,520

60.0

32,970,248

40.0

2010

84,449,941

2.6

50,763,726

60.1

33,686,215

39.9

2011

85,291,822

1.0

51,392,991

60.3

33,898,831

39.7

2012

87,909,344

3.1

53,364,506

60.7

34,544,838

39.3

2013

87,550,013

-0.4

53,000,277

60.5

34,549,736

39.5

2014

89,190,441

1.9

54,106,987

60.7

35,083,454

39.3

2015

91,009,189

2.0

55,393,723

60.9

35,615,466

39.1

2016

94,496,645

3.8*

57,502,474

60.9

36,994,171

39.1

2017

97,183,132

2.8

59,191,049

60.9

37,992,083

39.1

2018 

(EST)

97,538,908

0.4

59,363,358

60.9

38,175,550

39.1

2019 

(FORECAST)

98,319,219

0.8

59,974,723

61.0

38,344,496

39.0

* STARTING WITH APRIL 2017, RETAIL FIGURES ARE CALCULATED USING A NEW SAMPLE TO IMPROVE EFFICIENCY. IN ADDITION, SURVEY ESTIMATION METHODOLOGY HAS BEEN ENHANCED. THE ADJUSTMENT GOES BACK AS FAR AS 2012.

42

February 2019 Canadian Grocer


2018 SALES GROWTH AND SHARE BY REGION

The Market Survey revealed some interesting regional stories. Ontario, which led the pack with sales growth of 5.8% in 2017, had the biggest decrease last year with sales dropping 1.8%. Meanwhile, Atlantic Canada and Alberta both posted sales increases last year compared to sales declines of 9.1% and 6.8%, respectively, in 2017.

CHAINS’ MARKET SHARE (OF GROCERY STORE SALES)**

Chains, once again, had the highest per cent market share in the Atlantic Provinces (78.9%), and lowest in Quebec (36.8%)

2018 (EST)

2017

(%)

(%)

Atlantic Provinces

78.9

78.3

Quebec

36.8

36.8

Ontario

62.1

62.0

Manitoba/Saskatchewan

70.8

71.1

Alberta

76.0

75.9

British Columbia*

73.1

73.1

Canada

60.9

60.9

** Includes Yukon, Northwest Territories and Nunavut ** Does not include department store or specialty stores

BR I TI SH CO LU MB I A*

0.1% sales decrease 15.5% national share *Includes Yukon, Northwest Territories and Nunavut

AT L A N T I C PROV IN C ES

2.5% sales increase 7.0% national share

MA N I TOBA

0.9% sales increase 3.8% national share

ALB ERTA

1.0% sales increase 12.7% national share

ON TA RI O

SASKATCHEWAN

0% sales increase/ decrease 2.9% national share

CANADA

1.8% sales decrease  32.6% national share QU EB EC

2.6% sales increase 25.5% national share

0.4% sales increase 100.0% national share

unaffiliated independents and major banner convenience stores. For the purposes of the survey, chain supermarkets are defined as any four or more stores with a single ownership, which includes a number of what the industry considers independents such as Longo’s in Ontario, Colemans in Newfoundland and Freson Bros. in Alberta. The Market Survey is based on Statistics Canada data strictly for supermarkets and convenience stores. By limiting our calculations to the traditional grocery universe, we can easily compare this

year to the last 50 years of Canadian Grocer’s Market Survey. While the Survey does not reflect food sales generated at drugstores, mass merchandisers (such as Walmart) or warehouse clubs (such as Costco), we know that sales through the latter two channels climbed last year as they continued to appeal to value-seeking consumers. cibc World Markets estimates Walmart and Costco’s food sales growth to be 8.5% and 9.2% respectively—considerably better growth than the meagre 0.4% increase traditional retailers eked out. February 2019 Canadian Grocer

43


ANNUAL MARKET SURVEY “There’s no question that data show grocery stores are clearly lagging inflation and population growth,” says Karl Littler, senior vice-president of public affairs for the Retail Council of Canada. He adds that one of the reasons may be extremely competitive pricing by retailers during 2018. According to Nielsen research, promotional pricing remained high in 2018, with a little more than half of units sold with a price cut. Speaking at Canadian Grocer’s Thought Leadership conference last November, Carman Allison, Nielsen’s vice-president

of consumer insights, said driving sales through promotion is obviously not a sustainable growth strategy, but that a promising sign was dependence on such pricing was starting to finally level off. It’s worth mentioning that specialty stores such as meat markets, green grocers, and fishmongers (which are measured separately in the survey and not included in the overall $97.5 billion sales figure) continued to gain ground in 2018 with sales growing in every province except Alberta, where sales dipped slightly last year. Overall, sales through these retailers

EXPLANATIONS:

CANADIAN FOOD STORE SALES 2018 ($000s)

Dollar sales generated at Canada’s chain supermarket and convenience stores reached $59.4 billion in 2018, inching up from $58.4 billion the year before.

BRITISH COLUMBIA

ALBERTA

MANITOBA & ONTARIO SASKATCHEWAN

QUEBEC

ATLANTIC PROVINCES

CHAI NS Convenience

Voluntary Groups

Unaffiliated

No. of stores

279

383

180

779

959

1,621

Dollar sales

5,384,446

1,344,405

95,542

1,439,947

6,824,393

19.7

1.4

21.1

100%

2,283

1,998

4,281

6,361

14,855,193

897,294

15,752,487

24,924,821

59.6

3.6

63.2

100%

% of total

78.9

No. of stores

481

Dollar sales

9,172,334

% of total No. of stores

913

Dollar sales

19,725,319

% of total

2,172

62.1

No. of stores

184

Dollar sales

4,632,503

% of total

532

70.8

No. of stores

286

Dollar sales

9,403,578

% of total

1,059

76.0

No. of stores

375

Dollar sales

11,045,178

% of total Dollar sales

1,599

36.8

787

73.1 2,518 59,363,358

% of total

60.9

**  Includes Yukon, Northwest Territories and Nunavut

44

TOTA L STORES

Supermarkets

No. of stores CANADA

I N D EPEN D EN T S

February 2019 Canadian Grocer

6,532

Total Independents

672

2,211

2,883

5,968

10,863,219

1,175,261

12,038,480

31,763,799

34.2

3.7

37.9

100%

698

599

1,297

2,013

1,773,175

137,405

1,910,580

6,543,083

27.1

2.1

29.2

100%

297

551

848

2,193

2,598,357

371,195

2,969,552

12,373,130

21.0

3.0

24.0

100%

196

678

874

2,036

3,716,982

347,522

4,064,504

15,109,682

24.6

2.3

26.9

100%

4,326

6,816

11,142

20,192

35,151,331

3,024,219

38,175,550

97,538,908

36.0

3.1

39.1

100%

Chain Stores: Four or more stores under single ownership. Sales figures are Canadian Grocer estimates based on Statistics Canada data and include convenience and supermarket stores. Voluntary Groups: Franchised independents operating in major or secondary wholesalesponsored group programs. Sales and market share data estimated by Canadian Grocer. Not included: Food sales through department stores (mass merchandisers), drugstores and club stores.


ANNUAL MARKET SURVEY SPECIALTY FOOD STORE SALES

Specialty food stores in Canada—which include meat markets, bakeries, green grocers, fishmongers, etc.—experienced a significant increase (8%) in 2018 compared to 2017. Growth since 2010 is even more impressive, with a 62% increase over the seven-year period.

Specialty Food Store Sales Estimated ($000s) 2018

2017

% Increase 2018/2017

281,557

249,654

12.8

Quebec

2,052,561

1,952,397

5.1

Ontario

3,391,292

3,060,618

10.8

Manitoba/Saskatchewan

310,060

284,347

9.0

Alberta

665,103

668,268

- 0.5

British Columbia*

1,244,947

1,142,080

9.0

Canada

7,945,520

7,357,364

8.0

Atlantic Provinces

Specialty Food Store Sales versus Canadian Grocery Food Store Sales Canada Totals Comparison estimated ($000s) $97,538,908 $84,449,941

** Includes Yukon, Northwest Territories and Nunavut

2018

Per cent Change Specialty Food Store Sales

CANADA

2010

$7,945,520 % Increase 2018/2017

% Increase 2018/2010

8.0

62.1

reached nearly $7.9 billion, an 8% increase from the previous year and a 62% increase from 2010. While chatter about the impending “retail apocalypse” has largely abated (thankfully), the survey revealed expected fluctuations in store counts. The 2018 Survey reveals there were 10 more chain supermarkets than in 2017, 22 fewer major banner convenience stores, six fewer voluntary group (franchise) supermarkets, and 10 additional unaffiliated independents (some supermarkets, but mostly smaller mom-and-pop operations). Total chain sales increased by 1% to $59.36 billion; independent voluntary groups' sales were also up by 1% to $35.15 billion, while unaffiliated sales fell by 5% to $3 billion. All tallied, there was no change in the national balance between chains and independents. Chains’ share of market remained at 60.9% with independents holding at 39.1. “With increasing competition in all retail channels it is encouraging to see the independent stores (both franchise and unaffiliated) maintain their

Specialty Food Store Sales

$4,902,634 Canadian Grocery Food Store Sales

Specialty Food Store Sales

Canadian Grocery Food Store Sales

share across Canada. It is a testament to our entrepreneurial independent retailers to differentiate themselves and be relevant to their customers in all communities across this great country,” says Tom Shurrie, president and ceo of the Canadian Federation of Independent Grocers. The question now is how will things shape up this year? In Canada’s Food Price Report 2019, the experts from the University of Guelph and Dalhousie University predicted wage stagnation and rising prices for all foods, with the exception of meat and seafood, will put consumers under pressure this year. Nielsen’s Allison also predicted at November's Thought Leadership conference that disruption in retail will continue, with potentially $7 billion shifting to warehouse clubs, dollar stores and online by 2020 as these channels become more appealing to value- and convenience-seeking consumers. “This is a forecast,” Allison told retail attendees. “Think about how you can intervene and get more of that share.”  CG February 2019 Canadian Grocer

45


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AISLES

Products, store ops, customers, trends

SAVOURY SNACKS

SHUTTERSTOCK/HANDMADE PICTURES

It’s crunch time

There’s been an explosion in new varieties of savoury snacks like chips and popcorn, with flavour innovations and better-for-you options hitting shelves like never before By Carol Neshevich

Y

ears ago, a shopper looking to grab a savoury/salty snack for a movie night on the couch had a relatively simple decision that might have gone something like this: do I want a bag of chips—maybe plain, salt and vinegar, or ketchup—or should I grab these pretzels? Today, however, the options are remarkably more diverse. New potato chip launches often feature upscale flavour combinations ranging from parmesan and roasted garlic to avocado and lime, while ready-to-eat popcorn might be flavoured with anything from tandoori and turmeric to cheddar and cracked pepper. And

we’re seeing a wider variety of healthier alternative chips, including bean chips, kale chips, beet chips and more. With all this innovation, sales have been booming, too. According to Nielsen data, popcorn sales rose by 6% reaching nearly $96 million in the past year, with flavoured popcorns (aside from butter or plain) up by 10% to $21 million in sales. Pretzels were up 4% to more than $48 million, “salty corn snacks” (such as tortilla chips) grew by 6% to $738 million, and potato chips rose by 4% to a whopping $1 billion in sales. “It’s been the last few years that this has really ramped up,” says Giancarlo February 2019 Canadian Grocer

47


AISLES Trimarchi, CFO and controller at Ontario-­ says Kirk Homenick, president of B.C.based Vince’s Market, remarking on the based Hardbite Chips, who notes his proliferation of savoury snack options. avocado oil potato chip line also reflects “Everybody’s getting in on the action— the trend toward upscale “foodie flafrom small artisan guys to medium-­ vour profiles” in chips. “So we have a sized suppliers all the way up to the big Black Sea Salt, a Sweet Ghost Pepper and a Honey Dijon, and we’re just in the national brands.” Joel Gregoire, associate director of food midst of launching a Smoked Paprika and and drink at Mintel, agrees. “While potato Garlic flavour [in the avocado oil line].” chips remain a popular option, the pro- Hardbite also launched a root vegetable liferation of formats and flavours in salty chip line a few years ago, including beet, snacks is striking,” he says. “Salty snacks sweet potato, parsnip and carrot chips. will always serve as an indulgent treat, Similarly, Colorado-based Made in but there has undoubtedly been a rise in Nature offers organic chip alternatives the variety of better-for-you salty snacks.” including kale chips and coconut chips, While “better-for-you” often means lower as well as a new line called Veggie Pops— in calories, he says, it could also refer to crunchy snacks made with organic kale, high protein, organic, “free-from,” probi- chickpeas, cauliflower, bell peppers, nuts, otic, plant based—anything that makes it seeds and spices. “Our savoury product feel like a more “permissible indulgence.” varieties like veggie pops and kale chips And consumers seem receptive to are a great alternative to something like a the many ways companies are making traditional potato chip, as they satisfy the savoury snacks healthier. “One great salty and crunchy craving without any of example where we’ve seen tremendous the guilt,” says Brian Allen, vice-president growth in the last year is we launched an of sales at Made in Nature. “Over the alternative line of chips that are cooked last couple of years, we’ve seen upward in avocado oil, which has healthier attri- movement in veggie-based snacks and we butes thatCG resonate with the 1consumer,” believe this trend will continue as more 20-0659RB Ad_Release.pdf 1/11/18 4:35 PM

consumers turn to plant-based diets.” Who’s buying these better-for-you snacks? According to Neysa Davies, senior marketing insights manager at Mississauga, Ont.-based Tree of Life (which distributes a variety of savoury snack brands including Rhythm Superfoods’ kale chips and beet chips, Laiki’s rice crackers and the Good Bean’s crunchy legume snacks), it’s consumers of all ages. “Better-for-you snacks have typically held an assumed demographic with the on-the-go millennials. But as the category evolves, distribution broadens and consumers become more informed, so does the demographic,” says Davies, noting that the attributes of many of these snacks— including clean, high-quality ingredients and a focus on satiation—seem to speak to everyone from young families and millennials to baby boomers. Innovation in both healthier options and creative new flavours isn’t just coming from the smaller players—even the traditional giants such as PepsiCo and Conagra are getting in on the action. As Rita Bajzelj, brand manager, total popcorn at Conagra Brands explains, health-related


AISLES trends that may have started in “natural foods” are now, undoubtedly, mainstream. “For example, Orville Redenbacher Microwave Popcorn optimized its formula and now has no artificial colours, flavours or preservatives. The change helped to bring lapsed consumers back not only to the brand but to the entire microwave popcorn category,” she says. Orville Redenbacher also launched its new Simply Salted flavour in late 2018 that is certified vegan, “so we are happy to have an option for every consumer now,” says Bajzelj. And Conagra also has the Angie’s Boomchickapop brand, whose ready-to-eat popcorn line is “NonGMO certified with nothing artificial, and offers not only delicious popcorn favourites such as Sweet & Salty and Sea Salt, but also more indulgent flavours such as Caramel Cheddar,” she says. Jill Hong, director of consumer insights at PepsiCo, confirms flavour is a key driver, as younger Canadians look for more variety and the growing ethnic population looks for more intense flavours. “Frito-Lay has been expanding to meet these ever-increasing

desires through innovations like Cheetos Flamin’ Hot, Ruffles Sweet and Spicy, Miss Vickie’s Jalapeno and Lay’s Poppables Honey BBQ,” says Hong, who adds that Frito-Lay also offers several better-for-you options, including Tostitos Multigrain, SmartFood Delight (a lower-fat version of Smartfood popcorn), and lower-sodium versions of Lay’s Classic, Tostitos and Ruffles Regular. With all the new players and products in the category, combined with the fact that traditional big-name salty snack brands are still big sellers, things can get tricky when it comes to shelf space. “As all these new products come in, your main line sections naturally start to get chopped back a little bit,” says Trimarchi. “You can’t expand the aisle, so what ends up happening is [the traditional salty snack brands] maybe now have to try to sell out of a few feet less, because we’ve got to take that space to introduce this whole new line of popcorn.” This isn’t a problem, he says, it just means operators have to stay on their toes. “If we stick to tried-and-true merchandising plans and price promotion activities, we

can maintain our sales in those [traditional brands] while still growing snacking.” Keeping the snack section looking fresh is key, he adds: bags need to be kept in good shape, and the section needs to be constantly replenished. And since these snacks are typically an impulse purchase, positioning displays throughout the store in “quick-impulse areas” is important as well. “It just comes down to good merchandising,” says Trimarchi. “A good operator putting the right product in the right spot—not too much, you know, you can’t go nuts—and then just keep an eye on it and manage it day to day … Because there’s definitely margin to be made, there’s money to be made in this category; it’s not giveaway sales.” Trimarchi relies on the vendor community to bring new savoury snack innovations forward. “We’ll try it, and if it maintains its sales then we’ll hold it; and if it doesn’t, then we just kind of rotate it out for the next item,” he explains. Sampling is also helpful when it comes to introducing new snacks, he says. “If you do sample these products, you can see some pretty good sales growth.”


PET FOOD

Feeding our furry friends

Premium pet food is on the rise. Make your store a destination for picky pet parents  By Risha Gotlieb we’ve all come to recognize the com-

mon buzz words used on the packaging of healthier, cleaner foods: organic, all natural, no artificial flavours or colours, non-gmo, gluten free, high protein. Those same descriptors can now be found on the labels of premium pet foods, which are being packaged, marketed and presented as being of the same quality as human health and wellness-focused foods. Over the years, the category has spawned sub-categories and specialized formulas that address specific dietary needs and sensitivities of the pet based on such things as size, breed and age—not to mention the wide-ranging offerings of treats, supplements, and raw and refrigerated/frozen foods. The market for these premium pet foods is proving to be “a very reliable and healthy driver” of pet food sales, says Dewey Warner, food analyst with global strategic market research firm Euromonitor International. Global figures show that last year consumers spent more than US$90 billion on pet food, up

50

February 2019 Canadian Grocer

from about US$54 billion in 2008. And in Canada alone, total retail sales of pet food topped US$1.7 billion last year, with US$472 million of that amount spent on premium dog and cat food. The main factor influencing this market is the humanization of our pets— they’re now considered part of the family and companions rather than animals that need to be tamed, says Warner. A key driver of this trend, he adds, are the single and childless millennials, whom industry analysts refer to as “pet parents” and their pets as “fur babies.” Where do Canadian pet parents shop for their fur babies’ food? According to Euromonitor, last year online sales were up, comprising almost 3% of our pet food market, while 97% of purchases were made at brick-and-mortar retailers and vet clinics. To make your grocery store a destination for picky pet food shoppers, “you need to provide what consumers are looking for,” says Mary-Ellen Schick, a category manager at Longo’s, noting the

big pet food trends are natural, organic, better-for-you, fresh/refrigerated or frozen/raw. “And then you need to communicate to your customers that you have the offerings they need.” Longo’s carries a number of premium pet foods that include such brands as Nature’s Recipe and Crave. They were one of the first Canadian grocery retailers to launch refrigerated pet food into the Ontario market and, more recently, introduced a frozen raw option in partnership with Hungry Hunter, made by raw dog food producer Big Country Raw. Debbie Pelczynski is the president and ceo of Your Healthy Pet, a holistic line of food, supplements and treats for dogs and cats sold at Sobeys as well as independent health food stores and pet food specialty stores. She suggests grocers would do well to address those consumers who prepare homemade meals for their pets. “They should also consider stocking nutritional supplements, or miss out on a 50% margin,” she adds, noting that “probiotics and fish oils are No. 1 sellers for me.” In fact, some smaller grocers choose to focus more on pet treats and supplements than regular pet food, like Pete’s Frootique & Fine Foods in downtown Halifax: “They’re easy to grab and don’t take up as much shelf space as bags or cans of pet food,” says Frank Yunace, the store’s operations manager. He acknowledges there’s a growing market for more natural, fresh, raw meat pet food; in fact, some of his customers regularly come in to buy pieces of raw meat, like marrow bones, for their pets. When it was suggested he could further cater to their needs by making available fresh, ready-made items (such as pieces of raw chicken, sweet potatoes and spinach) packaged in handy tote bags, Yunace said he would “absolutely” consider it. How else can retailers boost their pet department sales? Yunace suggests tapping into the expertise of local treat makers and suppliers that come into the store with samples and information sheets, and to consider “being creative through social media” as a way to reach customers. Pelczynski also suggests grocers grab the attention of shoppers by holding demo days, handing out samples and coupons as well as recipe cards for homemade pet food. It might get pet parents to reconsider the grocery store as a destination for their pet’s needs.  CG

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AISLES

Cauliflower power

As more consumers turn to plant-based, gluten-free or low-carb diets, food companies are replacing flour, rice or other simple carbs with cauliflower in products ranging from pizza crusts to crunchy snacks. The trend has caught the attention of everyone from The New York Times to The Washington Post, with Fast Company even weighing in with an article titled “Why trendy cauliflower products will soon dominate the entire grocery store.” They might be on to something: check out these cauliflower innovations. CAULIPOWER After achieving fast-growing popularity across the United States, Caulipower made its Canadian debut last spring with the launch of four of its naturally gluten-free cauliflower crust pizza products: Margherita, Three Cheese, Veggie, and Plain Crust. While the company is headquartered in Los Angeles, all of Caulipower’s pizzas and crusts sold in Canada are also made in Canada.

FROM THE GROUND UP

VEGAN ROB’S Vegan Rob’s Probiotic Cauli­ flower Puffs are a crunchy plant-based snack made with organic ingredients. They’re also non-GMO, gluten free, kosher, and contain health-boosting prebiotics and probiotics. And, of course, they’re not just for the vegan crowd: as the packaging from the New York-based company says, “You don’t have to be vegan to enjoy Vegan Rob’s plant-based snacks!”

From the Ground Up is a line of cauliflower-based pretzels and crackers that also feature cassava flour and vegetable blend powders. These plantbased snacks from New Jersey’s Halen Brands are Non-GMO Project Verified and gluten-free certified. The pretzels come in twists or sticks, while the crackers are available in three flavours: Cheddar, Nacho, and Sea Salt.

WHOLLY VEGGIE! HARVEST FRESH Harvest Fresh Riced Cauliflower is naturally gluten free and has a lower calorie count than regular rice. Touting it as “the perfect replacement for rice,” Toronto-based Harvest Fresh says its riced cauliflower can be used to make risotto, side dishes, added to soups or a stir-fry. It can even be used to whip up a gluten-free pizza crust. A replacement for rice

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February 2019 Canadian Grocer

Toronto-based Wholly Veggie recently introduced a few new items prominently featuring cauliflower. The company’s new Vegan Pizza line is made with cauliflower-­ based crusts, while their Vegan Cauliflower and Red Pepper Bites are veggie-­ packed mini patties that can be added to salads, pasta, rice dishes or eaten on their own.


IT’S IN THE CAN

With today’s increasing emphasis on fresh food, it’s no surprise canned veggie sales are on the decline overall. That said, consumers are still buying them and sales numbers are still significant: canned tomatoes brought in more than $130 million in the last year, for instance, while canned corn saw $71 million in sales and baked beans brought in $68 million. This Nielsen data reveals how various canned vegetables have been performing.   CANNED VEGETABLES  -  52 weeks, ending December 8, 2018 $ Sales

$ Vol % Chg

Units

68,122,728.0

-2

55,952,574.4

-1

4,050,737.0

-4

2,433,911.0

-2

KIDNEY BEANS

32,429,237.0

-1

28,068,367.4

-1

MUSHROOMS

28,778,006.0

-4

24,170,217.7

-1

BAKED BEANS BEETS

PEAS & BEANS

Units Vol % Chg

26,451,255.0

1

23,163,800.6

0

130,566,061.0

0

95,926,480.8

-1

  TOMATOES - TYPE OF TOMATO CUT - CRUSHED

16,313,706.0

2

12,317,793.1

0

TOMATOES

  TOMATOES - TYPE OF TOMATO CUT - DICED

67,690,256.0

0

52,567,139.3

-1

  1. TOMATOES - TYPE OF TOMATO CUT - GROUND

2,228,259.0

8

1,688,081.6

11

  TOMATOES - TYPE OF TOMATO CUT - STRAINED

7,793,071.0

16

4,918,613.1

13

  TOMATOES - TYPE OF TOMATO CUT - OTHER   TYPES OF TOMATO CUT

11,949,271.0

5

7,224,820.0

2

  TOMATOES - TYPE OF TOMATO CUT - PUREE

1,373,179.0

-5

828,689.6

1

  TOMATOES - TYPE OF TOMATO CUT - STEWED

6,673,093.0

0

4,924,229.6

-1

  TOMATOES - TYPE OF TOMATO CUT - WHOLE

16,545,226.0

-8

11,457,114.5

-9

174,672,775.0

-1

129,334,919.1

-2

  2. VEGETABLES - PRODUCT TYPE - ASPARAGUS

1,105,337.0

-14

293,146.8

-20

  VEGETABLES - PRODUCT TYPE - BEANS GREEN

11,933,665.0

-4

11,273,255.7

-2

  VEGETABLES - PRODUCT TYPE - BEANS WAXED

4,670,563.0

-4

4,718,340.1

-3

  VEGETABLES - PRODUCT TYPE - CARROTS

1,572,052.0

-10

1,612,213.9

-7

  3. VEGETABLES - PRODUCT TYPE - CORN

71,227,014.0

-3

65,380,902.3

-3

4,420,988.0

4

2,241,788.3

-3

VEGETABLES

  VEGETABLES - PRODUCT TYPE - CORN ON THE COB   VEGETABLES - PRODUCT TYPE - MIXED VEGETABLES

3,314,080.0

-3

3,408,924.9

-2

23,591,659.0

-2

22,678,942.1

-1

4,406,141.0

-3

4,490,216.4

-3

  VEGETABLES - PRODUCT TYPE - REMAINING  VEGETABLES

48,078,233.0

5

13,027,160.7

2

4. VEGETABLES - PRODUCT TYPE - SPINACH

353,043.0

-43

  VEGETABLES - PRODUCT TYPE - PEAS   VEGETABLES - PRODUCT TYPE - PEAS & CARROTS

 1 Although canned tomatoes showed flat growth overall, a couple of varieties had very strong growth: ground tomatoes were up 8% in dollar sales to $2.2 million, while strained tomatoes rose 16% to $7.8 million in the latest 52 weeks ending Dec. 8, 2018. 2 Canned asparagus, anyone? Anyone? Canned asparagus dollar sales declined 14% to $1.1 million, with unit sales dropping 20%.

210,027.9

-33

3 Canned corn may be down 3% in both dollar and unit sales, but it’s still the secondhighest selling canned veggie on the list (next to tomatoes) at $71 million in sales. 4 Popeye’s favourite food, canned spinach, has seen much stronger days: dollar sales were down by a whopping 43% to only $353,043, while unit sales were down 33% to just $210,028. SOURCE: NIELSEN, NATIONAL, ALL CHANNELS, ALL SALES, EXCLUDING N.L.


CHECKING OUT George Condon

Foods labelled free-from or plant-based are increasingly in the spotlight, while the term “natural” remains a bit vague IT WAS AT LEAST 25 years ago in this column that I questioned the use of the word “natural” in product descriptions. Back then it was a broad, vague term and it remains so today. Natural, as used by the food industry, broadly has meant any product not containing artificial colours or preservatives or ingredients. But without any clear definition of the word or rules around its use as a claim on food and other consumer goods packages, there is some confusion. Use of the term natural on food packages has sparked debates and even lawsuits from consumer groups who want the term clearly defined or banned altogether. In the United States, the Food and Drug Administration is currently looking into whether or not it will step in

54

February 2019 Canadian Grocer

and define what natural actually means. Consumers’ growing appetite for less-­ processed foods has prompted the industry to come up with other appealing descriptors. In recent years, the terms “clean” and “free-from” have been gaining steam. In terms of the latter, Euromonitor International research shows global growth of “free-from” foods climbed 7% in 2016 reaching US$32 billion and is expected to grow by another US$9.5 billion by 2021. Defined as products that have been designed to exclude specific ingredients, free-from products initially appealed to those consumers with allergies or intolerances to things like nuts, milk and gluten. Supermarkets like Kroger in the U.S. and Morrison’s in the U.K. were quick

George Condon is Canadian Grocer’s consulting editor. He’s based in Toronto. condug@sympatico.ca

SHUTTERSTOCK/PICITUP

THE EVER-CHANGING LABEL LANDSCAPE

to catch onto the trend, and now offer dedicated free-from sections in their stores. Kroger also publishes a list on its website of more than 100 artificial ingredients, flavours and preservatives “you won’t find in our products” while supermarket chain Morrison’s aired a television ad last Christmas touting its wide free-from range of gluten-, wheatand milk-free products. Today, free-from has become a worldwide movement, with Euromonitor reporting that “the trend has gone beyond intolerances.” A wider group of consumers (not just those with specific nutritional needs) are seeking out free-from foods, perceiving them as healthier than regular products. Consumers are also seeking out free-from foods out of concern for the environment and animal welfare. Non-GMO foods are also linked to the free-from movement. Now, plant-based foods have stepped into the spotlight. One manifestation of this is the growing popularity of meatfree January or “Veganuary.” Launched in the U.K. five years ago, Veganuary is an organization (a registered charity, actually) that encourages consumers to try going vegan for the first month of the year to help animal welfare, the planet and their own personal health. This year a record number of people (about 250,000 in more than 190 countries) signed up for the challenge, according to The Guardian. Meanwhile, plant-based eating with its emphasis on vegetables, whole grains, nuts and seeds, has been identified by many industry observers as something that will continue to trend in 2019 and beyond. Even the recently released, revamped Canada’s Food Guide puts a huge emphasis on Canadians increasing their consumption of plant-based protein. It seems the plant-based trend is here to stay. Still, I have to wonder: what trends will be grabbing the spotlight next?  CG


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Canadian Grocer - February 2019