Canadian Grocer - January 2018

IDEAS FOR A BETTER BUSINESS & PLANET P. 21 AN ORGANIC EXPERIENCE AT TORONTO’S THE SWEET POTATO P. 26

TEN TRENDS TO WATCH IN 2018!

P.11

GENERATION NEXT Meet seven up-and-coming leaders in the grocery biz P. 30

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12/90g Source 1: Nielsen MarketTrack, National GR+DM+MM, Latest 52 Weeks, Period End June 24, 2017

Source 2: Nielsen MarketTrack, Nat’l 5 Channels, L52 Wks pe April 29, 2017 vs. YA

CONTENTS January 2018

COVER STORY

GENERATION NEXT

30

Volume 131 Number 9

Meet seven future leaders of the grocery industry

54

OPINIONS

05 Front Desk 14 Food Bytes 58 Checking Out PEOPLE

06 Julian Gleizer

The CEO of InstaBuggy explains how he plans to stay a step ahead as grocery home delivery heats up

08 The Buzz

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

IDEAS

11 Forecasting the future We round up 10 top trends to watch in the year ahead

26

13 Pricing predicament Why is the industry not seeing more growth? Blame pricing

AISLES

51 Higher grounds

18

From premium roasts to cold brew and pour-over, see what’s keeping the coffee category steaming along

FEATURES

54 Maple, eh?

LEADING THE WAY

FRESH

Beyond pancake syrup, this sweet flavour is finding its way into a growing range of foods

18 An interview with ADA’s

56 A blossoming business

Pierre-Alexandre Blouin

Grocers are saying “I do” to wedding floral arrangements

HACKS FOR A BETTER PLANET

57 Garden glory

How you can boost profits with a pop-up garden centre

21 Bright ideas from the

COVER IMAGE: MIKE FORD

sustainability “hackathon”

THE SWEET POTATO

FOLLOW US ON

26 See how this Toronto

grocer is serving up an organic experience

@CanadianGrocer

21

Canadian Grocer Magazine @CanadianGrocerMagazine January 2018 Canadian Grocer

3

Chocolate Truffle Lollies

4315w2 NHS CBE Ad - Grocery Foundation WRK.pdf

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11.23.17

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All rights reserved. Toutes les marques de commerce sont la propriété de la Société des Produits Nestlé S.A., Vevey, Suisse, et sont utilisées sous licence. Tous droits réservés.© 2017 Nestlé. Nov-17

NATURAL INGREDIENTS

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FRONT DESK

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

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

Flipp’s Wehuns Tan at Thought Leadership

EDITOR-IN-CHIEF Shellee Fitzgerald

sfitzgerald@ensembleiq.com

MANAGING EDITOR Carol Neshevich

cneshevich@ensembleiq.com

ONLINE EDITOR Kristin Laird

klaird@ensembleiq.com

SENIOR DESIGNER Josephine Woertman

jwoertman@ensembleiq.com

CONSULTING EDITOR George H. Condon condug@sympatico.ca

DIRECTOR OF PRODUCTION & DESIGN CANADA Derek Estey destey@ensembleiq.com

PRODUCTION MANAGER Michael Kimpton mkimpton@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

DIRECTOR OF PARTNERSHIPS David Wood dwood@ensembleiq.com

SALES, SPECIAL REPORTS Michelle Iliescu miliescu@ensembleiq.com 1-877-261-6636

EDITORIAL ADVISORY BOARD Tom Barlow, Ross Bletsoe, François Bouchard, André Gagné, Annick Gazaille, Denis Gendron, Lorelle Gilpin, Florent Gravel, Won Suk Ha, Jessica Kim, Les Mann, Ken Schley, Peter Singer, Mondella Stacey, Mike Venton SUBSCRIPTION SERVICES Subscriptions: $85.00 per year, 2 year $136.00, Outside Canada $136.00 per year, Single Copy $12.00, Groups $59.00, Outside Canada Single Copy $16.00.

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REPRINTS, PERMISSIONS AND LICENSING Please contact Wright’s Media ensembleiq@wrightsmedia.com 1-877-652-5295

CORPORATE OFFICERS

EXECUTIVE CHAIRMAN Alan Glass CHIEF OPERATING OFFICER Richard Rivera CHIEF BRAND OFFICER Jeff Greisch CHIEF FINANCIAL OFFICER Len Farrell CHIEF BUSINESS DEVELOPMENT OFFICER Korry Stagnito PRESIDENT OF ENTERPRISE SOLUTIONS/CHIEF CUSTOMER OFFICER Ned Bardic CHIEF DIGITAL OFFICER Joel Hughes CHIEF HUMAN RESOURCES OFFICER Greg Flores

JOHN GOLDSTEIN PHOTOGRAPHY

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 © 2017 by Stagnito Partners Canada Inc., 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.

Printed in Canada at Transcontinental.

We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

LOOKING AHEAD

Let’s start the new year on an optimistic note AT CANADIAN GROCER’S recent Thought Leadership conference, Wehuns Tan, the CEO and co-founder of digital flyer app Flipp declared: “It’s a very exciting time in retail.”

It was a refreshing perspective. At a time when the term “retail apocalypse” appears daily in newsfeeds, when massive job culls and closures are grabbing headlines and the spectre of Amazon looms, it was nice to hear a hopeful voice.

That’s not to say Tan sugar-coated the current state of affairs. Over the course of his presentation on “Reinventing Retail” he said technology is changing everything, and he laid out the threat that Amazon poses as a determined rival that’s not content with dominating the online retail space, but is now also setting its sights on physical stores.

But Canada, he said, is uniquely positioned in the world to learn from regions further along the e-commerce spectrum such as China and the United States. He figures we have a two-year window to respond to Amazon (“to build up your base and defend”). Now is the time to rethink your stores, he said, to invest in youth and tech, reorganize insights teams and play nice

with your CPG partners. The future can be bright, it’s all about how you respond.

Since we’re looking forward, I’d also like to introduce you to some future leaders of the industry—our seven Generation Next winners for 2017. Starting on page 30, read how one of our New Exciting Thinkers (what “Next” stands for) Josh Domingues has created an app to help tackle the mounting problem of food waste in our industry.

And how another, Ryan Fowler, is driving growth on Conagra’s key brands, and how Sarah Grant of Localize is bringing greater transparency to the grocery store. This year’s winners are an outstanding bunch—this isn’t the last you’ll hear of them!

Also in this issue (because it’s that time of year, after all) we’ve rounded up 10 trends to watch in 2018 (pg. 11), which run the gamut from the culinary to the technological.

Looks like an interesting year ahead.

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.

Visit CANADIANGROCER.COM to subscribe.

January 2018 Canadian Grocer

5

PEOPLE

Who you need to know

The Facts Who Julian Gleizer Position Founder and CEO of InstaBuggy What’s Next?

Expansion into Calgary, Edmonton and Montreal

BRINGING IT HOME

Julian Gleizer, founder and CEO of InstaBuggy, is upping the grocery home delivery game

By Rebecca Harris Photography by Jaime Hogge 6

January 2018 Canadian Grocer

PEOPLE

T

he light bulb moment that would launch Julian Gleizer into the grocery world happened in 2014, when he was helming a startup in the daily deals space. As an entrepreneur, Gleizer was clocking long hours: six or seven days a week until late in the evenings. He was also tending to his father, who was ill at the time.

“Every day after work, I had to go to the grocery store and pick up the essentials [for my father],” says Gleizer. “And I just wished there was a service that allowed me to go online, order groceries and have them delivered to him quickly.

That service didn’t really exist.”

There was one grocery delivery service in the Greater Toronto Area (GTA) at the time but it didn’t offer same-day delivery. Gleizer’s vision was built around the need for speed: groceries delivered to people’s doorsteps in as little as one hour. After Gleizer’s daily deals startup was acquired in May 2014, he began developing the technology and platform for InstaBuggy, which he launched the following April.

Here’s how it works: customers enter their postal code on Instabuggy.com or on the company’s mobile app and its nearby retail partners—including FreshCo, Sobeys Urban Fresh, Costco, Pet Smart and Coppa’s Fresh Market, as well as the LCBO in Ontario—will pop up.

Customers can shop from multiple stores at the same time if they like, and have all their purchases delivered in one order.

InstaBuggy currently operates across the GTA, and recently expanded to Ottawa and Vancouver. Next on the expansion list are Calgary, Edmonton and Montreal. “Once we scale out across Canada, the plan is to enter the U.S. market,” says Gleizer.

It’s an ambitious vision, but Gleizer has the entrepreneurial chops to make it happen. “I was involved in the family export business from the age of 15, so I always had that entrepreneurial spirit and a passion to succeed,” he says. “My parents immigrated from Russia and I saw them working very hard to provide and give me the opportunity to grow and succeed in Canada.”

30 SECONDS WITH...

Hard work and long hours have helped make his latest venture a success, as has his commitment to continually evolve and improve. For example, InstaBuggy initially had a markup of roughly 30% to 35% on groceries. In September, the company launched a new pricing model that eliminates markups, so prices are similar to what customers find in-store, including sale prices. “We realized that as opposed to having a niche market, and in order to scale successfully, we would need to go to in-store pricing.”

Customers now pay a flat “picking, packing and delivery” fee of $19.98 on every order, with no minimum purchase required. For those shopping at multiple stores, there’s a $9.99 fee for each additional store, while the delivery fee for LCBO orders is $19.99.

Another step in InstaBuggy’s evolution is creating partnerships with consumer packaged goods companies such as Conagra Brands and Unilever.

“CPGs can essentially get directly to the consumer now and advertise or do sponsored promotions,” says Gleizer.

One recent promotion by Conagra, for instance, featured summertime barbecue recipes that incorporated its VH Sauces.

While a number of grocery chains are now offering their own delivery services, Gleizer says what makes InstaBuggy unique is it allows consumers to shop multiple stores at the same time and have everything delivered in one order.

And, if new online grocery players enter the market, Gleizer believes InstaBuggy’s relationship with its customers will make it stand out. “It’s the trust factor. We’re very transparent and have no hidden fees,” he says. “The experience is also very personalized in terms of having a personal shopper who is constantly communicating with the customer, for example, if substitutes need to be offered.”

The appeal for many InstaBuggy customers is eliminating the “chore” aspect of grocery shopping. “It’s much easier when everything is brought directly to your doorstep,” says Gleizer. “We go as far as bringing it into your kitchen and helping out. If you’re disabled, we’ll put the groceries into your fridge. So, we do provide that white-glove service.” CG

JULIAN GLEIZER What are the most purchased items on InstaBuggy?

People get their staples, like eggs, yogurt and milk. But there’s significant demand for fresh foods and produce. Once customers see that the products are really fresh, it becomes a no-brainer for them.

What’s your secret to success?

There really is no secret. It’s all hard work and just pushing through. At times, you get to a point where you feel a burnout, and you just have to make sure you keep going. Another key is having the support that I’ve been fortunate to have, and that comes from my wife. She’s been the greatest support. On top of that is the team we’ve built. They see the success and growth of the company on a monthly basis, and they’re believers in the vision.

What’s the best part about being an entre­ preneur in the grocery delivery business?

It’s making a difference—having the customer be able to buy their time back and spend it on other things versus going grocery shopping. That’s something that really gives me satisfaction: being able to make a difference and solve a real problem in today’s day and age, which is time.

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

Pursue your goals and dreams, work hard at them and never get discouraged. There will be times when you feel like you’re getting beaten down, but just continue, push through that and focus.

January 2018 Canadian Grocer

7

THE BUZZ

The latest news in the grocery biz OPENINGS

« Food and entertainment take centre stage at Nations Fresh Foods’ new Toronto location at the Stockyards Village Shopping Centre. Along with its “East Meets West” food philosophy, the 155,000-sq.-ft. store—which opened in mid-November—features a state-of-the-art arcade, party rooms and an interactive playroom.

Recognizing the growing importance of the in-store experience, senior vice-president Frank Ho said Nations (which now operates four stores in the Greater Toronto Area) wanted to take a family-friendly, interactive approach at the new location.

Nations Fresh Foods opened its fourth location in November

Giant Tiger is in expansion mode. In November,

The Coppa family, which currently operates four Coppa’s Fresh Market grocery stores in the Toronto area, recently gifted the Princess Margaret Hospital Foundation $100,000 towards The D’Elia GU Robotic Surgery and Research Fund.

L to R: Dr. Michael Jewett, surgical oncologist at Princess Margaret Cancer Centre; Christine Lasky, chief brand officer and VP of strategic initiatives at The Princess Margaret Cancer Foundation; John Louie Coppa; Dr. Robert Hamilton, surgical oncologist at the Cancer Centre; Paolo D’Elia and Louie Coppa

8

January 2018 Canadian Grocer

ANNOUNCEMENTS In recent weeks Loblaw has announced plans to shutter 22 stores from across its banners, combine its PC and Optimum points programs (effective February 2018), and has confirmed its partnership with U.S.-based grocery delivery service Instacart.

Natural foods retailer Organic Garage has completed lease negotiations for its fourth location.

The new store in Toronto’s trendy Liberty Village area is slated to open in 2018.

the discount retailer—which sells everything from clothing to groceries—opened three stores in Ontario (Brampton, Owen Sound and Mississauga), one in Manitoba (Winnipeg) and one in Quebec (Greenfield Park).

NEWS AT CANADIAN GROCER/ ENSEMBLEIQ-CANADA At Canadian Grocer, we also have some announcements to make. Vanessa Peters, formerly our senior business development manager, has been promoted to the position of associate brand director. Peters held key sales and sales management roles at Canadian Grocer between 2005 and 2015 and returned to the magazine in early 2017.

Jennifer Litterick has been appointed president of EnsembleIQ-Canada where she will lead the convenience, grocery (including Canadian Grocer) and healthcare brands along with their affiliated events, digital media, custom marketing and research assets.

NATIONS FRESH FOODS, COPPA’S FRESH MARKET

GIVING BACK

THE BUZZ

EVENTS

1

Vancouver will host The Gluten Free Expo on Jan. 13 and 14. Visit glutenfreeexpo.ca for info.

National Retail Federation’s Retail’s Big Show will be held at the Jacob K. Javits Convention Center in New York from Jan. 14 to 16.

Visit nrfbigshow. nrf.com The Winter Fancy Food Show is set to take place at San Francisco’s Moscone Center from Jan. 21 to 23. Visit specialtyfood. com/showsevents/winterfancy-food-show

JOHN GOLDSTEIN PHOTOGRAPHY, ROGER YIP, CROSSMARK CANADA

The Grocery Foundation’s 2018 Night to Nurture Gala will take place at the Metro Toronto Convention Centre on Feb. 3. For tick­ets visit gala.groceryfoundation.com The Canadian Health Food Association is moving its CHFA West show to February in 2018.

The Vancouver Convention Centre will host the event from Feb. 22 to 25. Visit chfa.ca for info.

COMINGS & GOINGS

AWARDS A great night for grocery—on Nov. 20 in Toronto, the Food Industry Association of Canada awarded the 2017 Golden Pencil Award for lifetime achievement to Nestlé Canada’s Shelley Martin, SaveOn-Foods’ Darrell Jones, and the Retail Council of Canada’s Diane 2 J. Brisebois (2). Canadian Grocer’s Generation Next Award winners were also celebrated during the evening (1). Our 2017 winners are pictured above, waiting to receive their awards—read all about them on page 30.

At its annual dinner in October, United Grocers Inc. handed out six awards to suppliers (3). Winners were Old Dutch Foods (Best grocery supplier), Voortman Cookies (Best innovative supplier), Fresh Express (Best fresh department supplier), AEP Canada (Best service and equipment supplier), Private Brands Consortium (Best private label supplier) and Kruger Products (pictured below, Best new supplier).

3

Kim Thompson has been promoted to SVP client and business development at Crossmark Canada.

In her expanded role, Thompson will have oversight of Crossmark’s Marketing Werks in Canada.

Loblaw Cos. Ltd. has announced several changes to its executive team. Michael Motz, formerly president of Shoppers Drug Mart (SDM), is now COO of the retail divisions of Loblaw while Jeff Leger has stepped into the role of president of SDM. Garry Senecal is now chief customer officer of the company and Robert Wiebe is Loblaw’s chief administrative officer. Darren Myers will become CFO in January.

Marc Fortin is leaving Distribution Canada Inc. (DCI) to take on the role of president and CEO of Retail Council of Canada Quebec. Effective Jan. 8, DCI’s new president and CEO will be Todd Newstead, outgoing VP of national field sales at Canada Bread.

David Wilkes is departing his role as SVP government relations and grocery division at Retail Council of Canada to lead the Building Industry and Land Development Association as president and CEO.

January 2018 Canadian Grocer

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1 Canadian Shopper Loyalty Study –20 weeks PE April 2017 2 Nielsen MarketTrack, National GDMM, $ SPPDP, YTD PE April 29, 2017 3 Nielsen Bases II Results –2016 4 Nielsen MarketTrack, NAT XNFLD GB+DR+MM, L52 Wks peApril 29, 2017 vs. YA

IDEAS

Retailers, suppliers, shoppers, insights

TRENDS

PHOTOVIDEOSTOCK/GETTY IMAGES

What’s in store for 2018? ’Tis the season for trendspotting!

We’ve rounded up 10 hot trends for 2018 that run the gamut from consumer shopping and eating habits to trends in food innovation and technology

By Shellee Fitzgerald and Carol Neshevich

A

s we gaze into our crystal ball (as well as trend forecasts from the likes of Mintel, Nielsen, Loblaw, THP and Whole Foods), we can tell 2018 is going to be an interesting year for Canadian grocers. Technological innovations—in e-commerce as well as in food science labs—are changing the way people shop and eat, while concerns surrounding transparency, food waste, health and convenience are increasingly shaping Canadian consumer behaviour. Read on for a glimpse at our top 10 trends for 2018.

January 2018 Canadian Grocer

11

IDEAS Food science revolution

Pantry loading at the drugstore

As plant-based diets continue to rise in popularity and concern for sustainability grows, food scientists have been stepping up to engineer new foods, including lab-grown meat and animal-free dairy. Mintel calls this the beginning of “a technological revolution” and notes in its Global Food & Drink Trends 2018 that “technology will begin to disrupt the traditional food chain in 2018 as enterprising manufacturers aim to replace farms and factories with laboratories.” Whole Foods also included scientific manipulation of plant-based ingredients and proteins on its top trends list for 2018, pointing to “bleeding” vegan burgers or sushi-grade “not-tuna” (made from tomatoes) as just a couple of innovative examples.

Keep an eye on the drugstore! According to Nielsen, one out of every $5 spent at the drugstore is now spent on food. As the line between grocery and drug outlets continues to blur, it’s likely that food items will increasingly fill shelves at drugstores.

Demographics are in their favour. Canadian consumers continue to flock to densely populated urban centres, says Nielsen, where large grocery stores are not always easily accessible.

Drugstores (and others with small footprints) are seizing the opportunity and becoming more strategic with the products they stock such as food.

Private label powers up Once considered to be cheaper, less desirable alternatives to “name” brands, private label products have come into their own—so much so that they have become a point of differentiation for grocers. According to Nielsen, private label is stronger in developed regions of the world such as Canada, where they continue to outperform national brands. Categories leading private label growth include meat and seafood (6%), health and beauty aids (5%) and deli products (4%). As consumers switch to house brands as a strategy to save money, private label is poised for further growth.

It looks like 2018 may just be the year of the cake. Both Toronto-based food marketing agency THP and Loblaw had cake-related trends on their trend lists for the coming year.

THP noted that “glam cakes” will be on the rise, thanks to “Instagram-crazed foodies” seeking ultra-fancy cakes featuring glitter, sequins, sparkles and perhaps a hint of gold leaf to photograph and impress their social media followers. And Loblaw predicts eating cake for breakfast (“wake and cake”) may be on the rise in 2018—as an occasional indulgence, eating this sweet treat first thing in the morning gives the body all day to burn it off, diminishing some of the guilt from this guilty pleasure.

Full disclosure

Embracing e-comm

Consumer distrust is rampant around the world, and in Canada just one in five adult consumers trusts the claims made on packaging, according to Mintel. “In our new post-truth reality, consumers require complete and total transparency from food and drink companies,” says the research firm in its new global trends report. To reassure consumers about the safety and purity of the food they buy, companies will need to step up their efforts in the year ahead and be more forthcoming—not only about the ingredients they are using, but also about their production processes and supply chains.

Today online shopping accounts for just a sliver (1.9%) of fast-moving consumer goods (FMCG), but that’s about to change. Nielsen’s analysts predict that by 2020 the number will swell to 5.3%, representing about $6 billion in consumer spending. The market research firm also anticipates that e-comm sales of FCMGs will outpace brick-and-mortar sales growth by a margin of seven to one in this country. This, despite the fact online shoppers are more focused, making purchases from only 1.5 departments on average per visit versus shopping in three departments when in a physical store.

Everything old is new again

Super powders

The coming year will see Canadians looking to the past for recipe ideas, according to Loblaw’s 2018 Canadian Food Trends.

This could include efforts to replicate signature dishes of their childhoods, or even past generations, but updating them with a modern twist—perhaps reinventing an old-fashioned recipe using newer ingredients and/or cooking tools with an aim to making it a healthier or more balanced meal.

Think of them as super foods in a more convenient format.

Touted for the nutritional punch they deliver and the ease with which they can be incorporated into foods and beverages, Whole Foods Market has included powders in its list of top food trends to watch for 2018. While powders like matcha, maca root and cacao are “showing up in mugs everywhere,” according to the grocer, ground turmeric and powders like spirulina, kale, herbs and roots are quickly becoming favourites among the smoothie-drinking crowd.

Food waste fixes As the world’s eyes are being opened to the seriousness of global food waste, conscientious consumers are gladly adopting behaviours that can help ease the problem. Loblaw’s 2018 trend forecast included “right-size portioning,” for instance, which means only buying and cooking the amount of food you know you will eat, as well as “leftovers revival,” referring to the trend of finding creative ways to combine leftovers to create great-tasting meals. Meanwhile, Whole Foods added “root-to-stem” to its own 2018 trend list—as a twist on the nose-to-tail movement (eating the whole animal), root-to-stem means eating the entire vegetable, including the often-ignored leaves, rinds and stems.

12

January 2018 Canadian Grocer

Have your (fancy) cake and eat it (for breakfast) too

Getting personal According to Mintel, “A new era of personalization is dawning due to the expansion of online and mobile food shopping.” As e-commerce sites and mobile apps make grocery shopping easier, they’re also opening the door for more targeted promotions and products. In 2018, Mintel predicts retailers will increasingly be leveraging data collected from electronic transactions to create a more personalized shopping experience—targeting consumers with suggested items based on previous purchases, for instance, or even recipe suggestions that complement their shopping lists.

IDEAS POLL RESULTS

LOOKING AHEAD AS WE BID ADIEU to 2017 (and with any luck, also the term “retail apocalypse”) we thought it was as good a time as any to get your thoughts on the year ahead. What do you expect will cause you the most angst in your business over the next 12 months? Labour, NAFTA, e-commerce … there are plenty of areas of potential concern, but we narrowed it down to five.

We asked readers on CanadianGrocer.com:

What are the biggest hurdles facing your business in 2018?

7% 11% 17% 31%

ENERGY COSTS

INVESTING IN TECH

ECONOMIC UNCERTAINTY

GROCER: WAVEBREAKMEDIA/SHUTTERSTOCK; TAGS: SMARTBOY10/GETTY IMAGES

CUSTOMER ACQUISITION AND RETENTION

34% STAFFING

Pricing predicament The economy is doing well, consumers are feeling good—so why is the industry still struggling? Blame pricing

By Shellee Fitzgerald “WE’RE GOING through a really tough year as far as not seeing a lot of growth, and this has to do with pricing,” Carman Allison, Nielsen’s vice-president of consumer insights told a rapt audience at Canadian Grocer’s Thought Leadership CEO Conference in November.

The price war with aggressive promotions that retailers started engaging in last year has impacted growth, he explained. And with pressures such as rising labour costs (in Ontario and Alberta, in particular) on the horizon, Allison encouraged grocers to get more strategic with their pricing. “We don’t want retailers to be closing stores or laying off employees, but that could be the reality if we don’t start taking prices up.”

To tackle the pricing issue, Allison outlined three strategies for retailers:

2. ADJUST YOUR PROMOTIONAL MIX—“It’s not just about pricing; you also need to be strategic about how you promote,” said Allison. Typically, folks in the industry run a promotion, get a hit, then fall into a loop of running the same promotion again and again without achieving desired results. “We’re seeing that only 16% of promotions are actually a win-win scenario where both the retailer and the manufacturer are making money.” He encourages retailers to look for opportunities across the entire store, including the centre aisles. Promotions in areas such as meat, produce and deli do not work as well, since items in these departments are already on the consumer’s shopping list. When you promote these items you are just cannibalizing sales.

3. WIN ON PRICE WITH WHAT MATTERS MOST—

1. INCREASE YOUR REGULAR PRICE—Blanket price increases don’t work, Allison said.

When taking this approach, sales and profits can drop because consumers are wired to look for alternatives: they may buy less, buy a cheaper product or stop buying the category altogether. “It’s important to be strategic with pricing,” he said, noting that you should not treat every single item the same. “Play with the numbers and look for the best-case scenario that will allow you to drive profit.”

You don’t need to win on price with every single item, said Allison. A Nielsen model looked at 8,300 items and came to the conclusion that retailers only need to win on 6% (or about 500) of items in the store; this 6% (which will vary from store to store) generates about 29% of unit sales overall.

“There’s a lot of stuff in your stores that consumers are not necessarily price sensitive to or they don’t buy frequently, so you don’t have to have the lowest price on these items.” CG

“IT’S IMPORTANT TO BE STRATEGIC WITH PRICING” January 2018 Canadian Grocer

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FOOD BYTES Joel Gregoire

CAPITALIZING ON CONVENIENCE As Canadians’ appetite for HMR grows, grocers must innovate and deliver easy solutions to win in this increasingly competitive space CANADIANS ARE MOVING from the kitchen to the restaurant in increasing numbers. As consumers continue to look for ways to save time, foodservice satisfies an evolving need for convenience. Grocers have taken notice. Today’s (and tomorrow’s) grocery stores are different from those of yesteryear, with the demand for “experience” central to this change. Home meal replacement (HMR) is at the heart of this evolution.

Mintel’s recently published report affirms HMR’s importance in this country, with 85% of Canadians claiming they have used HMR over the past three months (leading up to August 2017).

With so many Canadians embracing HMR, it makes sense for every grocer to invest in building or growing their HMR

program in one form or another. While operational considerations are central to developing an effective HMR program, like all businesses, success starts with understanding the consumer.

What’s the top reason consumers use HMR? One word: convenience. Among those surveyed, 44% said they purchase HMR because they “don’t want to cook” and 36% said they have “no time to cook.” While food selection influences where someone buys their meals, its importance trails the need for convenience when it comes to why someone uses HMR in the first place.

With convenience being the cost of entry for HMR, grocers need to take the importance of “quick and easy” to heart.

This means grocers will need to invest

HUNGRY FOR HMR

“Why do you purchase prepared/made-to-order foods from retailers?”

Reasons for purchase

44% 42% 36% 34%

Don’t want to cook Already shopping at the store No time to cook Am hungry while out

SOURCE: LIGHTSPEED, MINTEL, BASE: 1,709 INTERNET USERS AGED 18+ WHO USED HMR IN THE PAST THREE MONTHS, AUGUST, 2017

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in ways to make getting the foods they offer onto the plates of Canadians with the least amount of hassle.

Meal combos are a tried and tested way of overcoming potential barriers to using HMR as a meal solution. The report also showed that among the options available to consumers for HMR, meal combos proved to be the most appealing given their ability to provide holistic yet flexible meal solutions.

The report also shows there is emerging interest in online ordering and delivery. Not surprisingly, younger consumers show more interest in these opportunities, affirming the importance for grocers to integrate online ordering and delivery capabilities with their HMR programs to provide “store-to-door” solutions. The good news for grocers is that there is no need to reinvent the wheel when it comes to online ordering and pickup or delivery, with third-party platforms such as UberEATS gaining traction. Loblaw Companies Ltd.’s recently announced partnership with Instacart is another reflection of the evolution of home delivery.

While younger consumers show more interest in delivery options, they are also more likely to eat foods on-site. About half (51%) of HMR consumers surveyed claimed to “eat in” (compared to 87% who claim to use takeout). This number jumps to 67% among 18- to 24-year-olds, affirming the importance of grocerants in catering to this emerging consumer base.

The growth of foodservice in Canada means HMR, with its ability to deliver on convenience, will undoubtedly continue to be more critical to the success of retailers. Grocers that innovate against convenience stand to win share in what is likely to become an increasingly competitive space. CG

January 2018 Canadian Grocer

Joel Gregoire is senior food and drink analyst at Mintel, the world’s leading market intelligence agency. Based in Toronto, Joel researches and writes reports on Canada’s food and drink industry. @JoelDGregoire

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THINKING BIG at Thought Leadership 2017

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Canadian Grocer’s 2017 Thought Leadership CEO Conference was an afternoon filled with big ideas. Nielsen’s Carman Allison, VP of consumer insights, kicked things off at the sold-out event with a thought-provoking talk on pricing that featured new research and strategies for achieving greater growth. Next up: A one-on-one interview looking at the challenges facing independents with Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers and David Powell, president and CEO of The Powell Group of Companies.

Wehuns Tan, CEO and co-founder of Flipp, then delivered a compelling presentation on maintaining brand rel­ evance through reinvention. Tan’s talk was followed by the much-anticipated leadership panel with Lee Tappenden, president and CEO of Walmart Canada; Darrell Jones, president at Save-OnFoods; Carol Stewart, president and CEO of Kellogg Canada; and Shai Altman, president of McCain Foods Canada. The lively discussion covered everything from changing demographics to transparency, health and wellness innovations, and the importance of taking risks.

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Q&A

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IVEN CURRENT MARKET REALITIES, it’s not the easiest of times to lead a retail association. But having spent the last several years overseeing communications at ADA and learning the ropes from the association’s long-time leader Florent Gravel, Pierre-Alexandre Blouin is up for the challenge. Canadian Grocer spoke to Blouin recently about the pressures facing the industry and the plans he has for the 60-plusyear-old organization. Here are edited excerpts from the interview:

What issues concern your members most right now?

Competition, first and foremost. We are facing some very different competitors right now and the sector is changing rapidly. Another really important issue is a lack of employees in Quebec [where the unemployment rate is low]. We have to differentiate ourselves from the big, new competitors emerging in the market, but at the same time we have to offer great service to our customers. To do that we need good employees and a high number of employees; the big challenge right now is finding a way to attract people—this is something we’ll have to work really hard at to find solutions.

You mention differentiation—is this the best strategy for fending off threats from the likes of Amazon?

I think we need to make sure we’re the best at what we do. We can invest in e-commerce, but it’s probably not the solution for everyone. Same thing with technology. Investing in technology is a must but it doesn’t mean every retailer can just serve every customer with robots and automatic cash; there are consumers who do not want this kind of service. They want to talk to people, they want to touch products. I think there’s a place, for sure, for our retailers and we have a role to play in feeding Canadians.

What is the outlook for food retail?

I think the conditions of commerce are really tough at the moment. But at the same time, consumers have many different needs and we

need different stores to answer these needs. And we’re seeing a return to Main Street shopping—to butcher shops, bakeries and for specialty products. People tend to like to know their retailers and this is where our members fit in. So, while we have challenges, we also have opportunity.

ADA has been around since 1955.

How do you ensure it remains relevant?

We want to establish ourselves as the voice for food retail in Quebec. To do that we have to get even closer to our members and rally sectors that are currently less involved in our association. We want to represent all retailers—grocery, convenience, any size—but it can be a challenge reaching smaller members. But we have board members who are store owners, so we have retailers representing retailers—that’s the face of ADA.

What else will the association be focused on over the next year and beyond?

Collaborating more with the whole industry— producers, processors, chains and organizations such as the Canadian Federation of Independent Grocers. We have a close relationship but we need to work even closer with them to make sure that our model of retail continues. We are also very pleased with our involvement in the Small Business Matters Coalition, where we are starting to see tangible results like the recent announcement of tax cuts for small- to medium-sized enterprises and we hope we can reverse our unenviable position of having the highest credit card fees in the world.

What do you like most about your job?

The challenges. Some issues come and go; others sit on our plates for years. We just won an issue that we started working on 15 years ago—it was on the ability to sell local wine in grocery stores across the province [previously Quebec wine could only be purchased at government-run SAQs and wineries]. It took 15 years, but we stayed focused and worked with every part of the industry. Sometimes you just have to find ways to bring the issue forward in a new way. In the end, we got the result we were looking for. CG

Leading the way

Pierre-Alexandre Blouin, the new leader of the Quebec Food Retailer’s Association (ADA), has ambitions to make the organization an even stronger voice for la belle province’s food retailers

By Shellee Fitzgerald Photograph by Chantale Lecours 18

January 2018 Canadian Grocer

About ADA Based in Montreal, Association des dĂŠtaillants en alimentation du QuĂŠbec (ADA) represents about 8,000 food retailers across the province

P I E R R E A L E X A N D R E B L O U I N

EMERGING SUSTAINABILITY LEADERS TACKLE CLIMATE CHANGE As part of the annual Leaders and Sustainable Thinking series, Kruger Products and Canadian Grocer brought together the industry’s emerging talent to answer the question, “how do we decarbonize the retail value chain by 2040?”.

The attendees worked in teams to develop creative solutions and identify opportunities for the CPG and retail industry.

The teams were encouraged to think big and the recommendations were impressive. The ideas included everything from a net zero transportation system to an open-sourced think tank that provides carbon-neutral solutions for every aspect of the retail value chain.

THE RECOMMENDATIONS WILL BE SHARED WITH INDUSTRY SUSTAINABILITY LEADERS AT THE 2018 LEADERS IN SUSTAINABLE THINKING SERIES TO BE HELD IN FEBRUARY. READ ON TO LEARN MORE ABOUT THE IDEAS GENERATED AT THIS YEAR’S HACKATHON EVENT.

© 2017, ® Registered and ™ Trademark of Kruger Products L.P.

FEATURE

Hacks for a better planet

At the 2017 Sustainability Hackathon, future leaders teamed up to brainstorm a more sustainable future

By Carol Neshevich Photography by Roger Yip

ILLUSTRATION: BARANOVSKAYA/GETTY IMAGES

“HOW DO WE DECARBONIZE the retail value chain by 2040?” That was the big question posed to participants of the 2017 Sustainability Hackathon, an idea-generating event hosted by Kruger Products and Canadian Grocer in Toronto in late October.

The room’s atmosphere was buzzing with energy as the roomful of hackathon participants—who had been divided into six small groups of three to four people each—spent three intense hours collaborating to come up with unique solutions to the same question. The participants were young professionals (or “future leaders”) from various backgrounds, and each group was tasked with putting together a five-minute presentation on their decarbonization

ideas. To add an element of fun and incentive, the whole thing was set up as a competition. Presentations were judged according to five criteria: impact, scalability, maximizing co-benefits, creativity and presentation style.

Kruger Products and Canadian Grocer have held sustainability-related events for the last several years that primarily involved senior leaders from large companies. Steven Sage, Kruger’s vice-president of sustainability and innovation, said that while those events worked well, the plan this year was to do something new.

“This year we decided it would be different. There was an earnest desire to get younger people involved January 2018 Canadian Grocer

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FEATURE

1

1. On Oct. 26, 2017, hackathon participants gathered bright and early to brainstorm decarbonization solutions 2. Steven Sage, Kruger’s vice-president of sustainability and innovation 3. The winning team (L to R): Janessa Grossett, Puninda Thind and Alex Kjorven

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in this process,” said Sage during his introductory speech at the hackathon, which was organized with the help of The Delphi Group, a consulting firm specializing in climate change and corporate sustainability.

“There’s no bad answer to this [decarbonization] question,” added Sage. “We—together with Canadian Grocer—have been really encouraging the facilitation between our full industry. That’s what this is really about. It’s a giant experiment.”

That said, it quickly became apparent that the ideas and presentations being generated throughout the morning were exceeding the expectations of nearly everyone involved, including the organizers.

“The amount of creative new ideas and forward thinking right off the bat is really impressive to see,” said Dave Photiadis, a director with The Delphi Group, who was on hand to help out with the group discussions.

Participants were similarly pleased with the experience. “I’m actually really proud of our idea, and I’m happy to present it,” said Janessa Grossett of Leading Change Canada, a partnership initiative for and by young sustainability leaders. “I think what we’ve come up with could be really valuable and is something that could actually be real.”

Others were impressed with the range of perspectives being represented. Participants ranged from employees of large national and multinational corporations to founders of small startups. “I really like events like this where there’s such a diverse group, because usually you’re stuck within your

January 2018 Canadian Grocer

3

segment,” said Conner Tidd, co-founder of Just Vertical, a Toronto-based startup that sells vertical hydroponic growing systems to help people create “mini-farms” in their homes. “Usually you’ll go to your own industry meeting or your customer meeting or your stakeholder meeting—but here you’ve got such a diverse group. You get to move outside of your echo chamber.”

Interestingly, the diversity of participants led to a diversity of solutions. Without being instructed on what elements to focus on, each group addressed the question from a different angle.

Packaging Team 1’s solution was all about packaging. Team members Kayley Krupica (Unilever), Andrew Lavers (A&W), Carlie Clough (Sampler) and Bernie Ting (Gopomo Inc.) created a three-pronged approach focusing on monolithic packaging, reusable packaging and packaging design as it relates to transport.

Monolithic packaging refers to using only one material to create a package, which would simplify recycling and minimize the transportation necessary to complete the recycling process.

For reusable packaging, the team looked at reusable shampoo bottles as one example: consumers could have their bottles refilled at a store, rather than having to buy a new one each time they need shampoo. And the transport aspect of their strategy involved designing packages to minimize shipping requirements—for instance, having square-shaped

ILLUSTRATION: SAEMILEE/GETTY IMAGES

2

5

4

packaging means you can fit more items on a truck, which can reduce the number of delivery trucks on the road.

Plant-based foods With a focus on meat production and its impact on greenhouse gas emissions, Team 2’s idea was to lessen the environmental impact of meat production by encouraging greater consumption of plantbased foods. Team members Jessica Krasin (Kruger Products), Richa Gupta (Good Food for Good), and Ran Goel (Fresh City Farms) emphasized that promoting the positive aspects of a plant-based diet would be a better approach than making people feel guilty about eating meat. For consumers, this could include promoting the health and environmental benefits of a plant-based diet and for retailers, it could include promoting the potential for better profit margins with plant-based foods. Among other things, the team suggested using “gamification” to reward consumers for choosing plant-based items.

Customer experience Team 3 members Dustin Shreeve (Maple Leaf Foods), Conner Tidd (Just Vertical), Vita Kwan (Sampler) and Erin Murray (Canadian Tire) focused on improving customer experience as a way to ultimately reduce carbon emissions. They devised a customer-centric approach to grocery they argued would allow the customer to save time and money, increase food

6

quality and cut the environmental footprint.

The team’s key initiatives included home delivery of food with a select-a-size option as a way to reduce food waste—if consumers can select a portion size of food they know they’ll actually eat, food waste will decrease. The second part of their plan was to move to onsite food production for retailers, specifically for produce (which could include things like rooftop gardens or vertical farming). This would allow for a reduction of pesticides and fertilizer run-off and potentially improve margins. The third element of their plan was to encourage consumers to buy more sustainable products through initiatives like targeted sampling.

Transportation Choosing to zero in on the transportation aspect of the retail value chain, Team 4 came up with two solutions to reduce emissions from freight transportation: one was to leverage the Internet of Things (IoT) to transition to self-driving and connected fleets, and the other was to convert fleets to alternative renewable energy sources by 2040. Team members Whitney McWade (Canadian Tire), Jana Vodicka (Compass Group Canada) and Sravanti Mudunuri (Maple Leaf Foods) envisioned having sensors on trucks to track not only where the trucks are, but also what’s happening within the truck. This could improve efficiency by reducing the number of kilometers trucks are running empty, thereby reducing the overall number of trucks on

4. (L to R): Bernie Ting, Kayley Krupica and Carlie Clough have fun creating their presentation 5.

Team 2’s Richa Gupta 6. The esteemed judges (L to R): Kruger’s Steven Sage; Ted Ferguson, president of The Delphi Group; and Leslie Nicholson, head of procurement at Nestlé Canada

January 2018 Canadian Grocer

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FEATURE

7

the road. A second solution focused on fully electrifying entire fleets of commercial delivery trucks to eliminate emissions.

“Sustainamatics”

7. The Delphi Group’s Ingrid Hoffmann 8. Team 2 (L to R): Richa Gupta, Jessica Krasin and Ran Goel 9. Team 4, deep in thought (L to R): Jana Vodicka, Whitney McWade and Sravanti Mudunuri 10. Conner Tidd presenting Team 3’s solution

Team 5 came up with a data-centric solution, something they called “Sustainamatics.” Group members Rachel Doll (Tetra Pak), Josh Domingues (Flashfood), Jessica Pautsch (FoodMesh) and Gonen Hollander (Acerta Analytics Solutions) looked at a solution that could aggregate data so companies can make better-informed choices and help decarbonize the value chain. This could involve companies uploading data (such as financial reports, sustainability surveys, research or advocacy group reports) related to their greenhouse gas emission reduction strategies; for instance, to see how it ties back to their company’s financial performance. The team called it “a platform to create visibility for carbon reduction,” noting that something like this could help companies leverage solid data to create a wealth of sustainability insights.

Aisle 6 The final group to present also ended up being the hackathon’s winning team. Team 6 members Alex Kjorven (Purpose Capital), Janessa Grossett (Leading Change Canada) and Puninda Thind (Bentall Kennedy) came up with an innovative idea called Aisle 6 Labs: a testing ground for ideas that would

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January 2018 Canadian Grocer

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model a new, more sustainable approach to retail.

In their compelling presentation, team members stressed that most of the solutions for a decarbonized retail value chain already exist in different pieces and in different places, but what’s needed is a “playground” where it can all come together.

Aisle 6 would be an actual centre where sustainability-related ideas could be tried and tested quickly.

The team proposed that a large Canadian retailer could set up the “test store,” which would also double as a centre for sustainability innovation. The retailer could ask suppliers and partners to respond to a request for proposal (RFP) that factors in the goal of creating a net-zero retail value chain. Everything along the value chain—including products, packaging, transportation and customer experience—could be experimented with freely at Aisle 6, with the end goal being complete decarbonization.

KRUGER’S SAGE PRAISED the impressive efforts of all the teams and announced Team 6 as the winner.

Sage was one of the three judges, along with Ted Ferguson, president of The Delphi Group, and Leslie Nicholson, head of procurement at Nestlé Canada.

“For us [judges], the decision was unanimous,” said Sage. “We felt like the team that we’re designating as the winner engaged the entire value chain through their solution. We thought they were very pragmatic in their approach, and really looked at it with a vision to what the future could be ... they balanced the ambition for the future by taking advantage of the infrastructure that exists today.” CG

ILLUSTRATION: SAEMILEE/GETTY IMAGES

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Sustainability 2020

Our Journey Continues Kruger Products is committed to its multi-year journey to reduce its environmental footprint while improving the health & safety of its employees. Our Sustainability 2020 initiative focuses on four key targets towards achieving this objective.

For more on our continuing efforts, visit krugerproducts.ca/sustainability

REDUCE ENERGY USE* BY

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IMPROVE EMPLOYEE SAFETY BY

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January 2018 Canadian Grocer

STORE PROFILE

A Singular Experience

At an expanded new location, Toronto’s The Sweet Potato doubles down on affordable organics

By Chris Powell Photography by Jaime Hogge January 2018 Canadian Grocer

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He might just have the best name

IN ALL OF GROCERY, and now The Sweet Potato’s founder and co-owner, Digs Dorfman, has a new Toronto store that reflects his pride in being one of the city’s pre-eminent organic grocers.

In September, The Sweet Potato moved to new digs in the city’s Junction neighbourhood, just around the corner from its original location, which the business had outgrown. In a nice bit of retail synergy, the new location occupies what was once a manufacturing facility for the U.S. porridge brand Roman Meal, which was one of the original health food brands when it debuted in the 1920s.

At 18,000 square feet, the new store is nearly twice the size of The Sweet Potato’s original location, enabling Dorfman to significantly expand key departments such as meat and cheese, not to mention his beloved produce section.

“There’s nowhere in the city you can go and find a better selection, quality or price, of organic produce,” proclaims Dorfman over an in-store soundtrack featuring the likes of James Brown and The Supremes.

Since opening The Sweet Potato in 2008, one of Dorfman’s key areas of focus has been making quality produce affordable to his customers. On this day, that takes the form of a 3-lb. bag of organic apples for $5, and a $3 organic pineapple.

“I’m not going to tell you how I do it, but there’s nowhere else in the city right now where you can buy an organic pineapple for three bucks,” he says. “We’re the only store in the city that’s got that deal. It just doesn’t exist [elsewhere].”

Dorfman comes by his affection for produce honestly. His grandfather was the owner of the now-defunct Sunnybrook Farms and was well known to vendors at the Ontario Food Terminal— the main produce distribution hub for the Toronto area—where his grandson is now a regular customer.

Produce might be the new store’s centrepiece, but Dorfman has also invested heavily in the meat department, which

Right: The Sweet Potato is investing in its offering of prepared foods, all of which are made in-house in a kitchen staffed by eight people

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January 2018 Canadian Grocer

is stocked with products from small regional producers—including organic chicken from Ancaster, Ont.’s Fenwood Farm and sausage from Toronto’s Parkdale Sausage Co., which makes smallbatch sausages sourced from ethically and sustainably raised hogs.

While mainstream grocery stores are trying to edge into organics, Dorfman speculates that more than half of The Sweet Potato’s products cannot be purchased at the large grocery banners.

“You get [mainstream stores] that are all edging into organics, but because they [only] have an organic aisle or small sections, they can’t ever compete with us for variety,” says Dorfman, making his way down the frozen aisle and pointing to brands like Fressy Bessie Foods—a Toronto company that specializes in ice lollies made entirely from puréed fruits and vegetables—and Moorefield, Ont.based Mapleton’s Organic Ice Cream.

There’s also an extensive cheese section that is almost entirely comprised of cheeses from Ontario and Quebec. Dorfman says only about 15 of the approximately 150 cheeses come from outside of the two provinces, and all are organic.

Founder/co-owner Digs Dorfman (right) and business partner C.J. Chiddy show off the extensive organic produce section. (Left) The store also features organic meat from small regional producers

STORE PROFILE

The Facts Location Toronto’s Junction neighbourhood

Dorfman also takes a lot of pride in a chocolate assortment that is sure to appeal to even the most discerning chocoholic. “We love chocolate and we wanted to have a really bad-ass selection,” he says. “We wanted it to be unusually good. We wanted people to say, ‘Wow, that’s amazing.’”

The Sweet Potato is also investing in prepared foods such as rotisserie chicken, curries, pastas, pizzas, potpies and soups— all made in a 1,000-sq.-ft. kitchen staffed by eight people. “The problem is that we haven’t been able to increase the production in our kitchen fast enough to meet demand,” says Dorfman. “We think we can increase the offering substantially.”

Dorfman credits his business partner C.J. Chiddy with developing other aspects of the business that make shopping at—and working with—The Sweet Potato a singular experience.

“C.J. has brought a lot of creativity to the way we handle things,” says Dorfman, citing the development of an onboarding process for staff that has helped boost employee retention, and an emphasis on the customer experience

that includes miniature shopping carts for kids (“parents have been going nuts about how much fun the kids have with them,” says Dorfman).

Chiddy is also the brains behind a new “quiet hour” for shoppers on the autism spectrum. During this time, in-store music will be muted, the lights dimmed and staff will not stock shelves. “We’re going to leave the store as quiet and serene as possible for an hour,” says Dorfman. “[People on the autism spectrum] tend to need other people to shop for them, so the idea of giving them a place that could be inclusive is pretty terrific.”

Dorfman also plans to introduce a mentorship program for aspiring brands, providing would-be suppliers with guidance on everything from packaging to pricing. He describes it as the formalization of the existing relationships he has had with his suppliers over the years.

“Whether or not [a product] is going to be good for retail is really hard for these people to figure out,” says Dorfman. “So often, we come across products we think are great in three of the four ways they need to be, but that fourth

Size 18,000 sq. ft.

Specialties Large selection of organic produce, local meats, high-quality chocolate, extensive cheese section, in-house prepared foods

way is really going to obstruct making it [widely] available in the marketplace.”

He recounts the story of a West Coast snack food manufacturer he gave business advice to a while back. The company subsequently partnered with a major distributor and was eventually able to secure space in major grocery stores.

At the Canadian Health Food Association’s annual trade show a few years ago, Dorfman encountered the manufacturer who gave him a hug and thanked him for all his help.

“You can’t pay for a relationship like that,” says Dorfman. “If we needed to be the cheapest in the city [for his brand] once a year, I could call that guy up.

Actually, maybe I should call him,” he adds with a laugh.

Just another satisfied customer who digs Dorfman. CG January 2018 Canadian Grocer

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2017 GENERATION NEXT AWARDS

IN A LEAGUE OF THEIR OWN

BY REBECCA HARRIS PHOTOGRAPH BY MIKE FORD 30

January 2018 Canadian Grocer

From CPG and retail managers to startup CEOs, this year’s Generation Next winners— all of whom are under 40—are helping shape the future of Canada’s grocery industry.

Chosen for their leadership, innovative work and commitment to the industry, we can’t wait to see what’s next for these seven rising stars of the grocery world.

January 2018 Canadian Grocer

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2017 GENERATION NEXT AWARDS

Dr. Sara Celik NATIONAL SPOKESPERSON

Renew Life Canada

A naturopathic doctor, Sara Celik worked in clinical practice for more than 10 years before joining Renew Life Canada in January 2016. As national spokesperson for the digestive health brand, Celik is focused on educating consumers, retailers and healthcare professionals about the importance of gut health and probiotics, which is a dynamic growth category.

“A big part of what I do is not just increasing awareness of Renew Life products, but helping the health and wellness category to grow,” she says. “I want as many Canadians as possible to have access to health and wellness products and education, and by working with retailers, we’re making these more accessible to

consumers.” Last year, for example, Celik went on a “cleansing tour,” giving talks on detoxification at various grocery and health food stores.

Celik has also spoken at numerous conferences and is a media source for magazines, radio stations and television networks. This past September, Celik spoke at a grocery retailer’s pharmacist conference, which she considers a huge accomplishment.

“I can see the two worlds of conventional medicine and naturopathic medicine coming together,” says Celik. “We’re seeing more of an integrated approach to helping Canadians lead healthier lives.”

Josh Domingues FOUNDER & CEO

Food waste is a growing problem for grocery retailers, but Josh Domingues has an app for that. In 2016, the former Bay Street worker left the world of consulting and banking to found Flashfood, a mobile platform connecting surplus food at grocery stores directly to consumers.

“My sister was a chef and she gave me a call after a catering event and said, ‘I just threw out $4,000 worth of food,’” recalls Domingues. “Then I learned about the environmental impact of food waste and how much food was getting thrown out at grocery stores.” That led him to create Flashfood, which allows customers to save money, helps retailers reduce shrinkage, and helps the environment.

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January 2018 Canadian Grocer

App users are notified when partner retailers near them are having a Flashfood sale. Markdowns are typically between 30% and 50%, and nothing gets sold prior to its best-before date. Shoppers order and pay through their phones and pick up their items at the store. The service is currently offered at two Longo’s locations in Toronto, one in Brampton, Ont., as well as three Farm Boy stores in London, Ont. The company is set to launch a pilot in Vancouver and hopes to be across Canada in 2018.

PHOTO OF RYAN FOWLER BY JOHN GOLDSTEIN PHOTOGRAPHY

Flashfood

Ryan Fowler SENIOR BRAND MANAGER

Conagra Brands

What motivates Ryan Fowler is “the constant challenge of moving faster and going bigger, all to drive to growth.” As senior brand manager at Conagra, Fowler catapulted the VH brand from flat to double-digit growth with the launch of a national campaign, “Another Clean Plate Victory.” The humorous campaign— now in its second year—positioned the brand as a good option to ensure dinnertime doesn’t turn into battle time with kids.

Fowler was also instrumental in the December 2017 launch of Hunt’s Heirloom tomatoes, which was commercialized from concept to production in just four months.

“I made it a personal challenge to

see how fast can we launch this, and Heirloom was one of the fastest launches to market that Conagra has ever done,” says Fowler. “Now that’s our benchmark and that’s what we need to surpass next time.”

Fowler also oversees Healthy Choice frozen meals and novelties, Marie Callender’s frozen meals, Pogo Corn Dogs, Frontera sauces and salsa, and Aylmer tomatoes. While he drives an ambitious agenda with his team, Fowler is sensitive to the fact that you can’t do it all. “If someone on my team has too many projects on their plate, I say, ‘Let’s focus on the two or three biggest things that are truly going to move the needle.’”

Going the Extra Mile for his customers, his community, his company and his team is all in a day’s work for this store manager.

Jacky Ho store manager

and to all recipients of this year’s Generation Next Awards.

From all of us at Save-On-Foods, congratulations Jacky on your Generation Next Award!

2017 GENERATION NEXT AWARDS

Sarah Grant DIRECTOR OF PARTNERSHIPS

Localize

Sarah Grant is dedicated to working with organizations with passion and purpose, and she’s bringing her “do-good” work to the grocery world.

Grant spent nine years at Engineers Without Borders Canada, where she was responsible for the development of agriculture policy and programs in the developing world. In 2013, Grant joined Localize as operations manager for Eastern Canada and was promoted to director of partnerships in October 2016.

Localize uses data from food producers, manufacturers, certifiers and grocery retailers to provide on-shelf labelling and online information that identifies where food has come from and how it was produced. Localize also highlights attributes such as

GMO-free, organic and sustainable.

“At the heart of Localize is access to information and transparency to help guide consumers and inform their decisions,” says Grant. “That is something that I am personally passionate about and want to see more of.”

In her role, Grant leads the stra­tegic partnership development with food certification partners across North America. She has built partnerships with organizations such as OceanWise, Marine Stewardship Council, Certified Vegan, and OU Kosher Certification, and also with retailers such as The Big Carrot in Toronto.

Mo Hamoud

FRESH SPECIALIST, STORE OPERATIONS

Mo Hamoud joined Metro’s Food Basics in 2002 as a produce clerk.

Since then, he’s worked his way up the ranks, with positions including produce manager, assistant manager and store manager. As fresh specialist, store operations for the past eight years, Hamoud ensures each of the 11 Greater Toronto Area stores he oversees is offering the freshest possible meat and produce.

Hamoud also plays an instrumental role in the discount banner’s training and development program. Last year, Hamoud took the lead role in creating Food Basics’ first training videos, which have significantly helped improve employees’ knowledge and identification of produce items.

On top of that, Hamoud created

34

January 2018 Canadian Grocer

a new-and-improved interactive training reference manual for new hires in the produce department.

By educating staff and encouraging them to promote local food, he helped Food Basics win a “Vision Award” at the 2014, 2015 and 2016 Foodland Ontario Retailer Awards, which recognize retailers’ commitment to local foods.

Regarded as a great teacher, Hamoud says he encourages independent learning. “I allow my team to figure things out on their own, and then I follow up with coaching and guidance,” he says. “If any of my team members have any questions or concerns—no matter how big or small—I encourage them to reach out to me.”

PHOTOS OF MO HAMOUD AND AARON HAROWITZ BY JOHN GOLDSTEIN PHOTOGRAPHY

Food Basics

Aaron Harowitz CO-FOUNDER & CEO

Brutus Beverages Inc. Aaron Harowitz put himself through university by slinging cocktails at Vancouver bars and restaurants.

After spending his early career as a designer, he’s now shaking up the Caesar category at the grocery store.

Inspired by the “craft” movement, Harowitz and his longtime friend, Zack Silverman, had the idea to create a Caesar mix using all-natural ingredients. “We love Caesars, our national and most widely-consumed cocktail, and realized there wasn’t a Canadian-made, natural, premium Caesar mix on the market—so we decided to make one,” says Harowitz.

In 2013, the partners launched Walter Craft Caesar Mix, now a national brand with shelf presence

at 2,500 grocery stores across Canada including Loblaws, Sobeys, Metro, Overwaitea and Whole Foods Market locations. The mix, which has won 17 medals at international spirits competitions, is also served up at about 500 bars and restaurants.

This year, the company launched Walter Craft Caesar Rim, which also uses premium, all-natural ingredients. “We are really focused on staying true to our core tenets of craft, quality and all natural, while continuing to innovate and expand our product lineup,” says Harowitz.

CONGRATULATIONS DR. SARA CELIK ONE OF CANADIAN GROCER’S “GENERATION NEXT” AWARD WINNERS DR. SARA CELIK NATUROPATHIC DOCTOR NATIONAL SPOKESPERSON, RENEW LIFE CANADA

2017 GENERATION NEXT AWARDS

Jacky Ho STORE MANAGER

PriceSmart Foods, Overwaitea Food Group Jacky Ho got his start in the grocery business at age 16, working as a Christmas tree clerk at a Save-On-Foods in Surrey, B.C. He went on to take a retail management course through the Overwaitea Food Group, and became an operations manager in 2006. Ho was then promoted to store manager and is now helming his fourth store: PriceSmart Foods in Richmond, B.C. The Richmond store embodies the idea of “East meets West”—incorporating an ethnic and mainstream supermarket under one roof—and as manager, Ho works to meet the needs of the culturally diverse clientele.

For example, Ho spearheaded the 2016 Korean Food Festival, working with a sponsor and the Korean Trade

TASTE WHAT’S NEW FROM QUAKER® TM

www.QuakerOats.ca © PepsiCo Canada ULC, 2017

Centre to set up in-store activities and performances. He also builds relationships with overseas suppliers and has helped expand the store’s Asian product offering.

Ho motivates his 180 staff members by rewarding them for a job well done and working alongside them.

“You have to work side by side with team members and that’s something I firmly believe in,” he says. “You can’t run a business by hanging out back in the office.”

On the charitable front, Ho’s store raises money for local charities and schools, as well as the BC Children’s Hospital. In 2016, the store also raised $5,000 for those affected by the Fort McMurray wildfire in Alberta. CG

fresh the

2018 industry leadership supplement from Canadian Grocer

SPECIAL INFORMATION FEATURE

report

freshreport the

FRESH PERSPECTIVES

2017

RON LEMAIRE PRESIDENT, CANADIAN PRODUCE MARKETING ASSOCIATION

“

was quite the year for our industry! From turbulent weather to NAFTA negotiations, the fresh fruit and vegetable industry has been hit with many unexpected challenges. Beyond these issues, we’ve seen a growth in consumption, and an ever increasing demand for plant based products in both grocery and foodservice. As consumers are becoming even more conscious of their health, what does 2018 hold for our sector?

The produce trends in Canada are driving consumption. According to a 2017 PanelViews Omni Survey, overall produce consumption remains below the recommended daily intake, but has rebounded from a decline in 2016. In 2018 get ready to see even more fresh offerings. As the millennials start to have families we can expect to see a combination of health and convenience driving sales. Online grocery orders and home meal kit delivery companies are growing, and although they currently represent a small market share, expect to see that rise in 2018. Also expect to see an increase in vegan and plant-based offerings in foodservice and retail, as social influencers continue to drive this trend.

2017 saw several rounds of negotiations with our industry fighting to keep as much of NAFTA intact as possible. Integrated markets within North America have made it possible for foreign investment between partners and expanded employment and trade opportunities. For our industry, it has enabled companies to meet consumer demand for a year-round supply of product that meets both consumer and market standards for quality and safety at affordable prices. Though local produce is desirable to consumers, inclement and unpredictable weather means that global sourcing remains vital to maintaining price and sustainable delivery throughout the year.

In 2018 get ready to see even more fresh offerings. As the millennials start to have families we can expect to see a combination of health and convenience driving sales.

Dramatic changes to NAFTA, including the introduction of new tariffs or seasonal trade remedy duties, would negatively impact consumers in both the US and Canada. Time will tell what the modernization of NAFTA looks like and its true impact on our industry’s growth or decline. Through 2018, we’ll continue making sure the produce industry’s voice is heard and that our interests are respected on trade negotiations within North America and other vital jurisdictions like Asia.

With an increase in consumption and demand for fresh, we need to keep bringing the best possible product to the consumer. With this approach and vision, our industry will continue to thrive and grow well into 2018 and beyond!

S P E C I A L I N F O R M AT I O N F E AT U R E I N

J A N UA R Y 2018

For 125 years, Del Monte has stood as the freshest name in produce.

After all, we’re fruit fanatics, which means we’re also quality fanatics.

Innovation fanatics. Healthy-lifestyle fanatics. Food-safety fanatics.

Sustainability fanatics. And, while we obsess over all the fruits we grow, we’re bananas about bananas.

FRESHDELMONTE.COM

@DelMonteFreshProduce

1-800-950-3683

@DelMonteFresh

FRUITS.COM

@DelMonteFresh

FRUITFANATICS.COM ©2017 Del Monte Fresh Produce N.A., Inc.

DelMonteFresh

the

freshreport

BANANAS

120

3 by 2

Banana Sales in Canada

100

$628,527.21

$625,882.11 0%* 80

394,080.10

378,916.80

60 Dollar Sales Tonnage (000s) (000s)

Dollar Sales Tonnage (000s) (000s)

Latest 52 Weeks

Latest 52 Weeks YA

Seasonality Index for $ Sales 120

100

Source: Nielsen MarketTrack, National xNfld, all channels, 52 weeks ending October 14, 2017.

S P E C I A L I N F O R M AT I O N F E AT U R E I N

150

J A N UA R Y 2018

Oct 14, 17

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the

freshreport CELERY

3 by 2

Celery Sales in Canada $158,975.21

$146,508.04

53,765.80

53,265.80

Dollar Sales Tonnage (000s) (000s)

Dollar Sales Tonnage (000s) (000s)

Latest 52 Weeks

Latest 52 Weeks YA

Seasonality Index for $ Sales 200

150

100

Source: Nielsen MarketTrack, National xNfld, all channels, 52 weeks ending October 14, 2017.

120 S P E C I A L I N F O R M AT I O N F E AT U R E I N

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freshreport the

FRESH-CUT VEGGIES Consumers’ ongoing demand for fresh, convenient and organic food continues to fuel sales and innovation in the ready-touse produce category. Jacob Shafer, senior marketing and communications specialist for Mann Packing, provides insights into the trends driving the fresh-cut veggie segment.

How are fresh-cut veggies performing in Canadian supermarkets and what are the category trends?

As the demand for value-added veggies continues to rise, we are focused on expanding the segment for both conventional and organic products. We see the recent growth of organics as a key indicator for what consumers want moving forward. That’s why we expanded our line with the organic version of Mann’s Broccoli Cole Slaw, which recently celebrated its 25th anniversary at retail.

We’ve added other new products like organic Green Beans, organic Cauliflower Florets, and organic Super Blend, which is an appealing mix of flavours and textures loaded with crunchy veggies including kale, coloured carrots, green cabbage and broccoli.

What are some of the latest innovations in fresh-cuts?

Mann’s Nourish Bowls™ are the only warm veggie-based meal kits on the market. The products are easy to prepare, low in calories and highly customizable. Consider Mann’s new Spicy Thai Nourish Bowls™, which recently joined Monterey Risotto, Sesame Sriracha, Southwest Chipotle, Bacon Maple Brussels and Cauli-Rice Curry in the awardwinning line of single-serve warm meals. The Spicy Thai bowl has only 200 calories per serving and is ready in less than five minutes. Fresh ingredients include trending kohlrabi, kale and carrots with a spicy Thai sauce. A sweet, toasted coconut topping complements the blend. By using kohlrabi, which lends itself well to noodling, the bowl truly mimics a pasta eating experience, fork twirl and all.

How do you address environmental concerns regarding processing and packaging?

At Mann’s, our goal is to protect and conserve our natural resources and continually practice a solid position of

S P E C I A L I N F O R M AT I O N F E AT U R E I N

environmental sustainability. We are as proud of our environmental record and programs as we are of our quality fresh vegetable products. At our facilities, wash water is reclaimed into industrial waste systems for use on golf courses and city landscaping, and 90% of our facilities’ waste water is recycled. The electrical usage at our Salinas plant is the same as it was in 2001 despite a 50% increase in capacity. All of our corrugate and plastic packaging is recycled and we have zero packaging waste.

Sustainability and protecting our environment and valuable resources continues to be top of mind throughout all of our operations.

How do you ensure the food safety of fresh-cut veggies?

Food safety has always been, and will always be, our highest priority. The health and safety of the consumers who eat our products is of paramount importance to us. We work hard to implement industry best practices for food safety at every level of production, from the planting phase through harvest, processing, and distribution. Because of our rigorous food safety procedures, we’re able to provide our consumers with the highest quality products that are assured to be delicious, nutritious, and most importantly, safe.

What can retailers do to encourage better sales of ready-to-use veggies?

Retailers can create healthy destination categories in their stores; a place where consumers can conveniently find fresh vegetables, snacking trays and specialty vegetables.

Destination categories help consumers find new and innovative products. Retailers can expand shelf offerings of high demand cut veg items and should understand the data and the trends driving the category and take advantage of all selling opportunities.

J A N UA R Y 2018

3 by 2

For 125 years, Del Monte has stood as the freshest name in produce. After all, we’re fruit fanatics. And, as the world’s leading grower and marketer of fresh pineapples, we’re also innovation fanatics. Our Del Monte Gold® Extra Sweet Pineapple has revolutionized the category and boosted pineapple consumption around the globe.

How ’bout them pineapples?

FRESHDELMONTE.COM

@DelMonteFreshProduce

1-800-950-3683

@DelMonteFresh

FRUITS.COM

@DelMonteFresh

FRUITFANATICS.COM ©2017 Del Monte Fresh Produce N.A., Inc.

DelMonteFresh

the

freshreport

120

PINEAPPLES Pineapple Sales in Canada

100

$113,930.57

$111,288.95

+2%

*

43,266.70

80

41,660.8

Dollar Sales Tonnage (000s) (000s)

Dollar Sales Tonnage (000s) (000s)

Latest 52 Weeks

Latest 52 Weeks YA

Seasonality Index for $ Sales

150

120

90

Source: Nielsen MarketTrack, National xNfld, all channels, 52 weeks ending October 14, 2017.

S P E C I A L I N F O R M AT I O N F E AT U R E I N

J A N UA R Y 2018

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WHO’S WHO

Tap into Canada’s $120 billion grocery business now!

2018 2017

Limited Quantity Available ORDER NOW

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Revised and completely updated for 2018, the Who’s Who Directory of chains and groups in Canada contains key information and contacts for grocery retailers, distributors, convenience stores, mass merchants, drugstores and franchised groups stores.

Get access to: • Top executive, buyer and category manager names • Key industry data and statistics • Historical sales data on the grocery channel in Canada

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AISLES

Products, store ops, customers, trends

COFFEE

GETTY IMAGES/ANTHIA CUMMING

Higher grounds Innovation and convenience are keeping sales steaming in the coffee aisle

By Rosalind Stefanac

J

udging by the lengthy lineups at Tim Hortons on any given morning, coffee drinking has become one of our favourite national pastimes. In fact, a recent survey by the Coffee Association of Canada (CAC) reveals coffee is the most popular beverage among Canadians over the age of 16, outranking even tap water. Two-thirds of adults enjoy at least one cup of coffee a day, with the average consumption in Canada hitting more than three cups daily.

As a $6.2-billion industry, of which $1.4 billion is in grocery/retail sales, it’s no wonder more manufacturers, distributors and retailers are jumping on the coffee cart. Plus, with the growing popularity of single-serve in-home brewing devices, more and more consumers are choosing to make their cup of joe at home.

Patricia Snell, president and co-founder of Muskoka Roastery Coffee Co.—a Huntsville, Ont.-based local roaster now in its 18th year of business—says the biggest changes she’s seen in the coffee industry are the increase in demand January 2018 Canadian Grocer

51

for premium, coffee-shop quality coffee at home, as well as “one cup at a time” convenience. “Even when the economy is down and people can’t afford to go out as much, they’re absolutely willing to spend on a good cup of coffee,” she says. “Retailers are recognizing these trends and allocating more shelf space to truly differentiated, on-trend brands.”

Known for its handcrafted roasts, the company will launch its first 100% organic blend in 2018 and recently introduced its 100% compostable coffee pods.

“The fact is, people care about innovation in coffee, how it is processed and where it comes from,” says Jason Chong, insights and category development lead for Starbucks Canada’s grocery side.

“People who shop for grocery coffee are trying to replicate the café experience at home.” That could mean buying their own beans for grinding or looking for more variety in the on-demand segment via pods and capsules. “Canada is one of the highest consumers of coffee in the world so there are lots of opportunities,” he says. “Grocers can take advantage by being more open to having displays and in-store touch points for coffee versus other categories.”

Chong suggests increasing promotion around occasions for coffee and the foods you can pair with it. “It’s a similar approach to what you’d see with wine,” he says. “We need more communication in-store around how consumers can enjoy these beverages differently, and sampling is important to drive the experience and connect the taste before they buy.”

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January 2018 Canadian Grocer

COFFEE DRINKERS GET MORE DARING In addition to being heavy coffee consumers, Canadians are also getting more adventurous with the kinds of java-based drinks they’re reaching for. According to The NPD Group, hot brewed coffee servings have declined at a rate of 1% over the last five years, while hot specialty drinks have grown by 4% and iced specialty coffee a whopping 10%.

Cold brew coffee is an example of one such innovation that is percolating.

Meticulously slow-brewed without additives, the cold brew technique is gaining popularity for being an “any time of day” coffee drink that’s smoother than traditional iced coffee. “Buyers in the beverage category are craving new and exciting things,” says Mitchell Stern, creative and strategic marketing and branding specialist for Station Cold Brew Coffee Co., which was among the first to commercialize the cold brew in Ontario.

The target consumers for cold brew are millennials, but popularity is catching on with the younger set as well, says Stern. “We made assumptions that students couldn’t afford it because it is a premium-priced product, but we’ve been proven wrong and it’s amazing,” he says, noting that their products are now being carried in all Metro grocery stores in Ontario. The company is also talking to major grocers about providing a cold brew tap in-store where consumers can come in and fill up their own bottles to go. “We are working with Metro now on a pilot project to launch in one or two locations to see how it does.”

At CAC’s annual conference in Toronto this past November, a panel made up of millennials noted there is no limit to how much they would spend on a good cup of coffee. According to the Craft Coffee at Home report by NPD, this is also the demographic at the centre of a growing interest in craft coffee methods at home, using French presses, vacuum brewers and pour-over cones.

As the inventor of the world’s first coffee filter, Melitta is banking on the popularity of the pour-over method to keep on growing. The company recently introduced its Signature Series of onecup, pour-over coffeemakers, which are a modern take on the original invented by founder Melitta Bentz more than 100 years ago. “The pour-over method makes any coffee better and there’s no environmental impact as the filters are all natural,” says Davide Viola, VP of marketing at Melitta North America.

“You really don’t need fancy contraptions for a really good cup of coffee you can make at home in seconds.”

Viola suggests grocers put an assortment of coffee filters wherever they display brands of coffee. “People forget that 80% of the coffee category still goes through drip machines,” says Viola.

“That’s a huge opportunity to capitalize on consumers’ impulse purchases.”

That’s not to say grocery shoppers won’t enjoy their coffee in-store as well.

Starbucks cafés have become a staple in Longo’s stores in Ontario, and all six of Toronto’s Pusateri’s locations feature a café to complement the grocery experience. “Our shopping carriages have coffee holders built in so people can nurse a latte or cappuccino while they shop,” says Sebastian Demedeiros, Pusateri’s learning and development specialist of compliance, and the resident coffee guru.

He, too, notes that grocery shoppers today are much more savvy when it comes to their coffee preferences. “I’ve noticed that the coffee consumer has become more and more educated about different roasts and is asking for more milk varieties such as coconut, soy and even organic milk,” says Demedeiros, noting that all Pusateri’s cafés have recently switched to carrying only a 100% organic, fair trade private blend.

He says shoppers will also find a lot more locally roasted coffee on store shelves because they’ve been asking for it. “They think it’s fresher when it’s local.” CG

MELITTA

AISLES

AISLES

Maple, eh?

It’s still favoured as a syrup for your pancakes, but maple is becoming much more than that: this quintessentially Canadian ingredient is being used to flavour an ever-growing number of products, from cola to coulis. Statistics Canada numbers show that the total value of maple products increased by 35.9% to $486.7 million between 2015 and 2016, while Nielsen U.S. data reveals that sales of beverages sweetened with maple are up a whopping 25.6% in 2017. Here are a few products that illustrate just how crafty manufacturers are getting with maple:

RXBAR The Spirit of Montreal

1642 SODAS

SINAI GOURMET Montreal’s Sinai Gourmet is using real maple syrup to sweeten and soften the zesty spice of several varieties of its Hot Pepper Coulis, including Poblano Maple, Jalapeno Maple, Habanero Maple and Ghost Maple. Made with no artificial ingredients or preservatives, the company boasts that these sauces can be fried with, baked with, grilled with or mixed into “just about anything that you make.”

Montreal entrepreneur Bastien Poulain wanted to create a beverage that embodied the flavour, history and spirit of Montreal, and the end result was 1642 Cola. Made with a focus on local Quebec ingredients, the cola’s recipe features maple syrup from the Laurentian mountains.

Poulain’s twist on ginger ale—called 1642 Ginger— also features a touch of maple syrup in addition to its other local ingredients including natural ginger, honey and apple juice.

CAMINO In an effort to create a truly Canadian winter beverage that appeals to the whole family, Ottawa’s Camino has launched a Maple Hot Chocolate that carefully blends local, organic maple sugar from Quebec’s Citadelle Maple Syrup Producers’ Co-operative with fair trade and organic cocoa and sugar from Camino’s small-scale farmer co-operatives. This rich, dark hot chocolate is also vegan friendly and gluten free.

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January 2018 Canadian Grocer

RXBAR, a Chicago-based protein bar manufacturer recently purchased by Kellogg, has launched a Maple Sea Salt bar that the company touts as its own “healthy take on pancakes.” With all-natural maple flavouring and a touch of sea salt, this bar is made from whole foods and has no artificial colours, artificial flavours, preservatives or fillers—or “no B.S.,” as the company likes to say.

KAPPA FOODS Ideal for marinades, dressings, sauce reductions or enhancing a savoury dish, Kappa Foods’ Black Maple marinade and glaze is a blend of smoke, maple syrup and Kappa’s “secret vinegar.” While Kappa’s Black Maple is versatile, its Newmarket, Ont.-based makers say it goes especially well with meat and seafood.

WHAT’SNEW NEW PRODUCTS IN GROCERY

On Trend with Turmeric Club House Organic Bags are a new line of herbs & spices that are meeting consumer demand for certified organic and non-GMO. Currently, one of the hottest flavours on the market is turmeric. With its many benefits, it’s hard for Canadian consumers not to love this golden spice. Club House leads the industry in quality by going to the source to bring retailers the finest turmeric, and ensure amazing flavour for consumers every time.

A Little Italy Bring Italy into Canadian kitchens with this classic Italian dish. Difatti Gluten Free Gnocchi is a delicious line of Italian dumplings that are made in the sun-soaked region of southern Italy.

Expertly crafted from the finest potatoes, rice and corn flour, Difatti gives consumers the traditional taste and texture of gnocchi, without the wheat.

World-Class from PEI Provide consumers with world-class cheese made right here at home. Located on beautiful Prince Edward Island, COWS CREAMERY produces three award-winning cheddars: Avonlea Clothbound, Extra Old, and Appletree Smoked, as well as three varieties of butter: Sea Salted, Unsalted, and Cultured. COWS CREAMERY proudly uses PEI milk, sourced from local farms, in the production of these high-quality cheeses and butters at its local co-operative dairy.

Keepin’ it Fresh this Winter Allow consumers to venture off the beaten path this season with Muskoka Brewery. This winter Muskoka Brewery is offering a Winter Survival Sampler that includes 6 one-of-a-kind beers, each as unique and refreshing as the region itself. Each pack includes an “Enjoy Before” date, as beer is best consumed when it is fresh.

This is an opportunity for consumers to discover a new favourite and share with friends. The Muskoka Brewery Winter Survival Sampler includes: Muskoka Cream Ale, Detour Session IPA, Craft Lager, Mad Tom IPA, Winterweiss, Raspbeery Coco Lait.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–JANUARY 2018

Floral + garden

A blossoming business Grocery stores are saying “I do” to wedding floral arrangements

By Brenda Bouw

MORE BRIDES-TO-BE are adding a stop at the supermarket to their wedding to-do list, as retailers ramp up their offering of floral arrangements for the big day.

Brides are bypassing independent florists in favour of the lower-priced roses, lily-of-the-valleys and tulips offered by grocery stores with increasingly sophisticated floral departments. Some grocery chains even have floral experts on staff to handle a budding number of requests for wedding day bouquets, corsages and table arrangements.

According to a Produce Marketing Association and Food Marketing Institute report, grocery stores today are emphasizing wedding floral sales right behind holiday and impulse flower

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January 2018 Canadian Grocer

purchases. Among grocery stores that sell flowers, about one third offered a full-service floral department in 2015, up from about a quarter in 2013, the Trends in Mass-Market Floral report states.

By offering wedding floral options, grocers are attracting people that might not otherwise shop with them, with a goal of converting them into long-term customers across various departments. “If you can do someone’s wedding and you do a good job, you have them for life,” says Phil Lempert, an industry analyst and editor of Supermarket Guru, based in Santa Monica, Calif. Providing wedding flowers is also good marketing on the day of the event, he notes: “You are exposing your floral arrangements to more people who might come into your store.”

Fortinos (part of Loblaw) has been selling wedding flowers since the 1990s, but refreshed its program about three years ago due to increased demand, says Sergio Mazzuca, the chain’s senior category director for produce, bulk and floral. For-

tinos offers contemporary floral designs for brides, and 21 of its 23 locations in the Greater Toronto Area have designated floral specialists on staff.

Mazzuca says his customers come for the chain’s competitive floral prices, but also benefit from the longer store hours (compared to many independent flower shops) and attentive service. “We offer the same quality and can turn it around much quicker because of our buying power,” says Mazzuca. “The floral customer is discerning … we’ll do whatever it takes to make the wedding a successful day.”

A majority of wedding floral business comes from referrals, Mazzuca says, and doing a good job can bring repeat customers for other floral needs. “Florists are much like hairdressers. Once you get a florist that does everything right and you like what they do [you commit to them],” Mazzuca says.

But while wedding business can draw in new and repeat customers, some floral departments can have trouble finding specialized staff as well as sourcing certain types of flowers, depending on the time of year and the market supply and demand.

Weather can also delay shipments of flowers from places such as the Netherlands or South America, says Dawn McLaughlin, a Chicago-based produce coordinator with Whole Foods, which has been offering wedding flowers for more than a decade. “We do our best to source exactly what our customers are looking for,” she says.

And while weddings may not have a huge profit margin for some grocery retailers—in part, because they may not charge as much for labour as independent florists—McLaughlin says the service addresses a consumer need. “We just wanted to do it to satisfy the customers,” she says. “We see the need out there for people who are budget conscious. It’s also just fun to do.”

McLaughlin says wedding flowers is a huge and expanding market and “is something that every grocer should get into pretty aggressively.” As she explains, “There’s marketing, referrals and you’re getting customers in your store that may not have been there before. Also, a lot of customers understand that you can get the same quality and design quality through a grocer—so why not?”

FORTINOS

FRESH

Garden glory Springtime garden centres can make profits pop

By Brenda Bouw

THERE’S SOMETHING ABOUT fresh plants at

CANTLEY GARDENS

the start of the gardening season that people with a green thumb can’t resist.

That’s why more supermarkets should take advantage of this short-term, seasonal lure by setting up pop-up garden centres, says Peter Cantley, president of consulting firm Cantley Gardens.

“It’s a huge opportunity,” says Cantley, the former vice-president of floral and garden for Loblaw Companies Ltd., who now helps U.S. grocers set up pop-up garden centres.

It also makes economic sense. Cantley says a pop-up garden centre set up for three months in the spring can generate as much in sales as indoor floral sales for the entire year. Grocers can also maximize sales and profits—in a business already struggling with tight margins— because the pop-up centres are only open for a few months a year, which means lower labour and operating costs.

“The pop-up garden centre is there when the business happens and it’s gone when it’s done. That’s one of the beauties of it,” says Cantley. “It drives sales

without having to add square footage.”

When the selling season begins depends on where in the country the store is located. Stores in British Columbia will likely start earlier than those northern Ontario, for example. “A lot of it is centred around the Victoria Day long weekend. That’s the key buying time,” Cantley says.

To make this short-term business work, Cantley says supermarkets need to set aside space in the parking lot, staff it properly and have the proper utilities, such as water and power, to make it run.

Having the right product also helps.

Cantley says fresh plants, such as annuals, perennials, herbs and vegetables, drive about 75% of total sales in the supermarket garden centre. Planting soil and a few basic gardening accessories should also be available.

The biggest challenge for these centres tends to be the weather. Supermarkets need to determine how they plan to stock the garden centre based on whatever spring may bring. Wet, cold weather could put a damper on the business, while warm, hot weather can bring a surge of buyers at once. “You have to be ready,” says Cantley. “There is nothing you can do to change the weather, but there are ways you can change your buying to maximize the sales potential or reduce the risk.” CG

The State for Apples In Washington State, our 1,260 apple growers work year-round to produce the quality fruit that the world has come to know and crave. Mother nature has blessed the region with perfect conditions for apples – clean mountain water and rich volcanic soil combine to produce that famous Washington juicy crunch.

Although the old-fashioned commitment to quality hasn’t changed, production methods are decidedly 21st century.

Investment in the newest orchard management techniques, state-of-the-art packing facilities and cutting-edge storage technologies enable Washington growers to deliver just-picked freshness for consumers all year round.

Our commitment to food safety is second to none. Retailers can feel confident that Washington apples will delight customers, crunch after crunch.

For more information on why Washington is the state for apples, visit our website www.bestapples.com.

CHECKING OUT George Condon

Retailers here could do well to pay more attention to what’s happening in Europe THOSE OF YOU WHO PAY ATTENTION to European retail know there are things happening there that have relevance here. Three recent events come to mind: EVENT #1—A recent briefing by EuroCommerce for Retail and Wholesale (a watchdog body) to the European Commission pleads for more support for small- and medium-sized retailers and wholesalers. It notes that smalland medium-sized enterprises (SMEs) account for one in four of all businesses, two thirds of which operate in retail.

“SME retailers and wholesalers are inherently closer to their customers and consumers than any other part of the supply chain. This closeness to the customer presents opportunities for identifying locally relevant innovations that generate a sustainable competitive advantage for smaller firms, of a kind that is not as

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easy to replicate by larger companies.”

SMEs need to be able to react quickly to changing customer demands, the briefing says. To remain competitive, SMEs need flexible and reliable contractual arrangements, continuous professional development, modern social security systems and active labour market policies. In this context, incentives to make it easier to recruit and create new jobs have to be encouraged. “Small retail and wholesale businesses suffer disproportionately from burdensome regulations.” The briefing also calls on the Commission to think small first and consistently apply the principle of better regulation. It recommends a SMEfriendly environment; the creation of a level playing field for all forms and channels of retail and wholesale, and a reduction in regulatory complexity.

George Condon is Canadian Grocer’s consulting editor.

He’s based in Toronto. condug@sympatico.ca

JASON SCHNEIDER

LESSONS FROM ACROSS THE POND

We in Canada can say amen to that.

Regulators should take note!

EVENT #2—Some analysts suggest the grocery industry could learn something from European apparel stores such as Zara and H&M. The “merchandise planning” method used by these chains has come to a new level of execution in Europe. Shorter planning and product lifecycles allow retailers to create more excitement around items offered while they hold to the disciplines of existing processes such as category management.

I reached out to my friend, David Marcotte, senior VP at Kantar Retail to get his thoughts. “Category management has been successful in providing better tools to get results from a static assortment of goods in a fixed-space environment,” says Marcotte. In grocery, 95% of products are marketed in the same space year in, year out. Category management is the key driver here, but its financials do not include funding at the department or corporate level. This differs greatly from apparel stores where most items are in the store just eight to 16 weeks. These stores will change 90% of their inventory in a year. The degree of planning and detail required is far greater than what is seen in grocery.

“What is important for grocery to consider is not just the greater rigour to planning and execution, it is the 1:1 relationship between actions and finance … investing money means people are accountable to budgets and results,” he says. Given the financial drivers and challenges in grocery today, he adds, a system aligning the actions of buyers, merchandisers and vendors to this way of thinking is highly advisable.

EVENT #3—Hard discounters Aldi and Lidl continue their phenomenal growth in Europe. Sales in the last period were up 20%, and 60% of Britons now say they shop at one of these stores.

What will happen if they bring their winning format to Canada? CG

Rob Thomas Fe brua ry y 3 3 3 2 0 1 8 Metroooorontoooonventionnnentre

To Purchase Tickets www.groceryfoundation.com •

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