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THE
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CONTENTS January / February 2017 Volume 131 Number 1 FEATURES
OPINIONS
AT YOUR SERVICE
5 Front Desk 22 Shopper Sense 54 Checking Out
30 How is mobile changing the loyalty program game?
STORE OF THE MONTH
GROCERY TRAILBLAZERS 34 Meet Canadian Grocer’s eight Generation Next winners for 2016
6 Summerhill Market Find out what’s new with this independent grocer. They expanded again last fall
PEOPLE
COME TOGETHER 41 Key insights from the Leaders in Sustainable Thinking conference
12 Salima JivrajHal How Jivraj harnessed her drive and marketing chops to bring halal foods to the fore 13 Milestones IDEAS
17 Order up! More celebrity chefs are giving food manufacturing a go
19 Food price fiasco How do fluctuating food prices affect grocery shoppers?
COVER: MIKE FORD (USE OF THE LIBRARY ROOM WAS GENEROUSLY PROVIDED BY THE FAIRMONT ROYAL YORK, TORONTO) THIS PAGE: JOSIAH GORDON
20 On the front lines Why you need to show appreciation for your in-store staff
21 Bigger basket The future of fat, changing food prices and local cheese
AISLES
50 Layer on the flavour Could yogurt be the most versatile product in your store?
51 Some like it hot Cool weather means hot beverages. Take a look at the sales
52 Chickpea champions These chickpeas are main ingredients
53 Grape expectations Tips for selling vino in the grocery store
53 New on the shelf
LEAF THE FUTURE TO US 46 What 10 grocery trends do you need to have on your radar this year?
Let us help you decide if these products are the right fit for your store
23 Fresh Experience January / February 2017 Canadian Grocer
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Can a clutch of endangered piping plovers in Wasaga Beach help build trust with your customers? You bet. Why? It’s local news, and local matters. 88% of people say they trust advertisements in Metroland’s community news properties, making us the most trusted source of advertising.
Build deeper connections with your customers today, at www.metroland.com/local-marketing
MOST TRUSTED SOURCE OF ADVERTISING
*Metroland distribution area. Source: BrandSpark International Survey 2016. Story credit: simcoe.com
FRONT DESK
January / February 2017 Volume 131 Number 1
GROUP BRAND DIRECTOR & EDITORIAL DIRECTOR Alison Wood 416.764.3837 awood@ensembleiq.com EXECUTIVE EDITOR
Shellee Fitzgerald 416.764.1660
sfitzgerald@ensembleiq.com MANAGING EDITOR
Lisa Bucher 416.764.1674
lbucher@ensembleiq.com
(Alicia Androich on leave) ONLINE EDITOR
Meagan Kashty 416.764.2005
mkashty@ensembleiq.com ART DIRECTOR
Josiah Gordon 416.764.1667
jgordon@ensembleiq.com
(Lindsay Maclachlan on leave) CONSULTING EDITOR
George H. Condon 416.261.8326
condug@sympatico.ca
ASSOCIATE BRAND DIRECTOR Mia Williamson 416.764.4168 mwilliamson@ensembleiq.com (Ariel Burkett on leave)
NATIONAL ACCOUNT MANAGER
Roshan Advani 416.764.1496
radvani@ensembleiq.com PRODUCTION MANAGER
Karen Richards 416.764.1688
karen.richards@rci.rogers.com
GROUP SALES MANAGER, CIRCULATION
Michelle Iliescu 416.764.1441
miliescu@ensembleiq.com EDITORIAL ADVISORY BOARD
Tom Barlow, Ross Bletsoe, François Bouchard, Mandi Fawcett, 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
HOW TO SUBSCRIBE/RENEW:
Contact MICHELLE ILIESCU T: 416.764.1441 or 1.800.268.9119, ext. 1441 E: miliescu@ensembleiq.com Renew online or change address/info: www.canadiangrocer.com/subscribe
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MAIL PREFERENCES: From time to time other organizations may ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2016 by Rogers Publishing Limited, 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 40070230 Canadian Grocer is Published by Rogers Publishing Limited (rogerspublishing.ca), One Mount Pleasant Road, Toronto, Ontario, M4Y 2Y5.
We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
HERE TO HELP You’ll be navigating a changing industry in the years ahead. Let us give you a roadmap WHILE WATCHING OTTAWA ACHIEVE one of the biggest upset victories in Grey Cup history, I was thinking that the fourth quarter for any industry is rarely boring. The pressure’s on to finalize projects we’ve spent the year—or longer—building. And to achieve the results we budgeted, and then re-forecasted, as the industry shifts to reveal new challenges and opportunities. It’s easy to get caught up in the final push of Q4 and forget the wins we’ve had since turning the calendar back on January 1, 2016. Whether you’ve spent the year building a process to optimize your supply chain, grown your loyalty program or opened a new store for a whole new demographic of shoppers, we all have a common goal: to serve customers better and earn their business. If our social, digital and
OUR PURPOSE IS TO HELP YOU NAVIGATE THE CHANGING INDUSTRY BY TACKLING ISSUES THAT MATTER e-com platforms have taught us anything, investing in a more personalized, frictionless strategy is critical in this consumer-driven economy. So here’s our pledge to you: Despite being the trusted voice of the Canadian grocery industry for 130 years, Canadian Grocer will not rest on its legacy. Our purpose is to help you navigate the rapidly changing grocery industry by tackling issues that matter. We will continue to turn to the brightest
minds to identify key trends, but we’ll also seek out new perspectives to provide business-building opportunities. With the recent acquisition of our brand, we have even more opportunities to support you. EnsembleIQ, our parent company, knows grocery and retail inside and out. We’ll be working closely with Your Convenience Manager, our sister brand that supports the convenience side of our business, in addition to our U.S. brands: Progressive Grocer, Shopper Marketing, Retail Leader, Convenience Store News and The Gourmet Retailer. Reach out. Tell us what you need. We’re in this for you.
Alison Wood
Group Brand Director & Editorial Director awood@ensembleiq.com
January / February 2017 Canadian Grocer
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The Facts Location Rosedale, Toronto Number of Employees 235 Size 10,000 sq. ft. Specialties Comfort food
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January / February 2017 Canadian Grocer
STORE OF THE MONTH
Home away from home Comfort food may be Summerhill Market’s claim to fame, but this independent grocer isn’t getting complacent. Check out what’s new. By Raizel Robin Photography by Jaime Hogge
January / February 2017 Canadian Grocer
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STEP INTO SUMMERHILL MARKET, and it feels more like a farmer’s market in cottage country than a grocery store in a bustling Toronto neighbourhood. Tables of colourful produce sit next to containers of salads and cut fruit, neatly labelled and stacked in refrigerated shelving. Decorative vases sit atop wood shelves brimming with items such as salad dressings, chips and snack mixes—all made in the kitchen upstairs. Customers navigate their carts through the aisles, stopping to chat with neighbours or friendly staff. There is a distinct, homey vibe. It certainly feels like home to Christy McMullen, who co-owns the company with her brother, Brad. They are the third generation of the McMullen family to run the operation, which first opened in 1954 as a 1,500-sq.-ft. grocery shop. McMullen, who grew up around the store in the 80s and 90s, remembers trips to the Ontario Food Terminal in her family’s station wagon. “It’s always been a big part of my life,” she says. “I remember stacking tomatoes when I was eight years old.” The high-end, gourmet supermarket added prepared foods to its inventory in the late 80s, starting with quiches, shepherd’s pie and the store’s famous chicken pot pie, which remains one of its top sellers. Over time, the chain’s store, located in Toronto’s afluent Rosedale neighbourhood has grown to 10,000 sq. ft. and now offers 5,000 grocery products and 2,000 prepared foods—the latter are made in the store’s 9,000-sq.-ft. kitchen. Summerhill Market expanded for a third time this past fall after acquiring the assets of All The Best Fine Foods, a 30-year-old gourmet independent grocer, which declared bankruptcy. McMullen was primarily interested in its 4,500-sq.-ft. Leaside Commissary located in downtown Toronto, where space is tight. The goal was to expand Summerhill’s commercial kitchen space to create more prepared foods. Another asset they acquired was All The Best Fine Foods’ recipes, which include signature fare such as its lourless orange almond cake and cheese straws. There was a lot of tasting and comparing during this time because the two stores had overlap in about 100 bakery products from loaves to scones, says McMullen. “So it became kind of the battle of which one was better.” McMullen and her team taste-tested both product lines and even got customer feedback on which one they preferred. If it was a toss-up, McMullen says they developed a whole new product based on the two items. The best-selling products at Summerhill Market are the prepared foods. Whether it’s salmon poké or shepherd’s pie, McMullen says, the goal is to save the customer time without sacrificing quality. McMullen’s chefs have spent a lot of time figuring out the perfect way to cook each dish so it reheats properly at home. The store’s website states: “We want you to think of our catering department as a neighbourhood extension of your own kitchen.” This couldn’t be truer. CG
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January / February 2017 Canadian Grocer
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STORE OF THE MONTH
Q+A CHRISTY MCMULLEN CO-OWNER OF SUMMERHILL MARKET TALKS CANNING, FUTURE TRENDS ... AND BUGS! WHAT TRENDS HAVE YOU SEEN OVER TIME? Trends come and go and then come back again, kind of like in the fashion industry. The same goes for the grocery industry. The trends go from organics to local to standard and then back again. A trend that has recently resurfaced is canning. Canning hasn’t been popular for a long time. The challenge always becomes trying to be at the front of the trend and predicting what’s next.
HOUSE BRAND Variety has been a key success factor to Summerhill’s in house brand.
WHAT TRENDS DO YOU EXPECT TO SEE IN 2017? We have yet to igure it out. Last year it was caulilower, so we had the caulilower rice, which is just grated caulilower. Before that it was kale. And 10 years ago kale was just a decorative plant in your garden for the fall. I think prepared foods are a huge trend. People want more exciting restaurant quality prepared foods such as ethnic foods and game meats. So it’s not just your shepherd’s pie anymore but your pork belly conit.
DO YOU SEE THE BUG TREND TAKING OFF? Yeah, cricket lour and mealworms. I don’t know how well those will go over. You do see a lot of great products that customers just don’t buy. Think about pears, for example. When was the last time you ate one? But they’re delicious! Sometimes you can push a product depending on signage and space. January / February 2017 Canadian Grocer
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1 A THOUGHT-PROVOKING AFTERNOON
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nnovation, technology, food trends, millennials—these were among the topics raised at Canadian Grocer’s sixth annual Thought Leadership CEO Conference in November. IGD’s Joanne Denney-Finch opened the conference by telling the nearly 300 attendees they need to plan for a radically different future. She added that if grocers hope to be “fit for the future” their single-biggest priority must be on building up their skills base. Other highlights from the afternoon included one-on-one interviews with Metro’s Carmen Fortino and Ron Welke of Federated Co-operatives. And marketing expert Tony Chapman led a lively panel discussion that delved into food trends and the modern consumer. Flipp Corporation’s Wehuns Tan closed the conference with an inspiring talk that called on Canadian companies to implement a culture of change to drive innovation in our country. Don’t miss Canadian Grocer’s Thought Starters conference, a companion event to Thought Leadership, coming this spring.
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A THOUGHT LEADERSHIP WHO’S WHO 1 Alison Wood, Canadian Grocer 2 Joanne Denney-Finch, IGD 3 Carmen Fortino, Metro 4 Networking opportunity 5 Ron Welke, Federated Co-operatives Ltd., and Tom Barlow, Canadian Federation of Independent Grocers 6 Food Trends and the Modern Consumer Panel: (Left to Right) Tony Chapman, Tony Chapman Reactions; Carman Allison, Nielsen; Sara Lynn Cauchon, “The Domestic Geek”; Giancarlo Trimarchi, Vince’s Market; Sasha Emmons, Today’s Parent; and Julie Bednarski, The Healthy Crunch Company 7 Wehuns Tan, Flipp Corporation
THANK YOU TO OUR SPONSORS! GOLD
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PEOPLE Who you need to know
Nourishing halal food Salima Jivraj harnessed her drive and marketing chops to bring halal food to the fore By Rebecca Harris Photography by Jaime Hogge
SALIMA JIVRAJ’S PASSION FOR FOOD BEGAN
The Facts Who Salima Jivraj Position Founder of Halal Food Fest What’s New? Joined Nourish Food Marketing as managing director, halal
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January / February 2017 Canadian Grocer
when she managed flyer design for Loblaw from 2010 to 2014. “It’s such an inspiring place to work, with their test kitchens and beautiful herb and vegetable gardens,” says Jivraj, a Toronto-born Muslim Canadian. “I couldn’t always participate in taste testing...but I was learning about food trends.” When foodie culture was emerging in 2011, Jivraj found a lack of information on halal restaurants. So, she founded an online hub focused on the Toronto halal food scene—HalalFoodie.ca. A year into running the website, Jivraj learned of a halal food festival in New Jersey and, a few weeks later, she heard about another one in London, U.K. She realized someone was bound to launch one in Toronto, and decided that it should be her. Her vision was to offer the Toronto-area halal community a North American-style food show, high on professionalism. Jivraj quickly assembled a core team of six, who had just six months to create the Halal Food Fest from the ground up. “If I have an idea, I need to do it now. There’s no waiting,” she says.
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PEOPLE Organizers expected 5,000 people to attend the two-day event at Mississauga’s International Centre in June of 2013. To their surprise, more than 30,000 people walked through the doors. The annual Halal Food Fest attracts around 35,000 people, and the team has added several enhancements to improve the experience, such as wider aisles to accommodate strollers and more seating for the festival’s elderly attendees. Two years ago, Jivraj left Loblaw to focus on the food festival and Halal Foodie. This past fall, she joined Toronto-based Nourish Food Marketing in the newly created role of managing director, halal. “[At Nourish], we’re looking at opening channels for any business that wants to get into the halal space, everything from original research, to design, to go-to-market strategies,” she says. The Canadian halal market is estimated to be worth $1 billion, and is growing 13% annually. “I hate using the word booming because it’s so cliché, but it really is,” adds Jivraj. For Canadian CPGs, there are opportunities to expand to international markets such as Saudi Arabia, where around 90% of on-shelf grocery is imported. Domestically, there’s growing demand for “day to day” halal products, says Jivraj. For example, a 2014 survey by Halal & Co Media found that 25% of Muslim consumers want halal candy (made without
30 SECONDS WITH:
SALIMA JIVRAJ IN WHAT CATEGORIES ARE HALAL FOODS MOST POPULAR? Currently, and historically, I would say the meat section. Halal hasn’t expanded widely into other categories. Soon, I expect dairy, bakery and confectionery to build some strength. Even HMR has potential because of the success of the halal food service industry. It’s a great opportunity for retailers to leverage some of that success.
WHAT ARE YOUR GO-TO HALAL RESTAURANTS? Being raised in Toronto, restaurants like Affy’s Premium Grill is a pioneer offering mainstream favourites that are completely halal right down to the sauces and cheese. Then, I’d say Naan & Kabob because it’s just really great food that represents a beautiful culture (Afghan). I love a good founder’s story and both of these restaurants have really great stories and people behind their brands.
WHAT IS YOUR FAVOURITE DISH? I’m a meat and potatoes type of person. I also love cuisine from my culture (East African/Indian) as well. I’d have to say cassava stew is what I’ve been craving recently. My favourites are constantly changing, so I’ll look at this in a few months and probably laugh.
MILESTONES
Metro’s Pierre Charron retires after 38 years in grocery
METRO
Appointment We are pleased to announce some executive appointments at Buy-
Appointment
Low Foods. Sam Corea assumed the position of VP of retail. Derek Hein was promoted to director of retail operations. Troy Dewinetz was also promoted and is now director of merchandising and corporate marketing. Albert Lum was promoted to VP of supply chain and procurement and Aaron Bregg to director of produce operations. Brody Powell was promoted to general manager of independent wholesale marketing and Rick Geirnaert to general manager of independent business development. Ian Dickson was promoted to VP of strategic growth initiatives. /Metro’s VP of national procurement of grocery,
pork-based gelatin). Muslim consumers are getting comfortable shopping at Walmart or Loblaws and want these stores to carry more products. “They’re looking at things like dairy, packaged goods and confectionery and they want to see the halal symbol.” Grocery retailers should know halal food shoppers come from larger families. “Mainstream” Canadian households consist of 2.5 people, while a Canadian halal-observing family is 4.4 people. Also, Muslim Canadians entertain at home more, and meat consumption is higher than the average Canadian. While many grocers have expanded their halal offerings, Jivraj says she’d love to see retailers be more inclusive. “As a halal consumer, I know first-hand that having a [halal] section doesn’t really help me because there’s probably only 10% of a grocery store that I can actually shop,” she says. “If things were labelled with a halal certificate logo, then I can be more confident with breads, dairy and confectionery and now I have the whole grocery store that I can peruse through— it’s not just [confined] to one aisle.” Outside of work, Jivraj keeps busy with her young family—she has three kids ages 10, five and nine months. But even in her spare time, Jivraj reads stats and does research on the global halal market. “It’s a crazy life… but it really is just family and halal.” CG
Award
announced his retirement after 38 years. Pierre Charron began his retail career at Steinberg’s in 1978.
Awards Equator Coffee Roasters co-founders Craig and Amber Hall were honoured by the Best Ottawa Business Awards for performance in philanthropy. The nomination was made by Schoolbox, one of the charitable organizations supported by the company. / L’Ancêtre Cheese Factory has won 23 awards for its organic dairy products. The awards were bestowed on 10 different products including its cheddars, butters, a parmesan and an Emmental. Its
Stores
Shows
old organic cheddar collected two gold medals at the Global Cheese Awards in England and took first place in the Mature Cheddar category at the British Empire Cheese Show, in Ontario. The salted butter won first place in its category at the Royal Agricultural Winter Fair and the British Empire Cheese Show, along with a gold medal at the Global Cheese Awards. L’Ancêtre was named a Grand Champion in the Cheddar, Small Plant and Cheddar, All Entrants categories at the British Empire Cheese Show./ As part of the Greater Montreal Attractiveness Forum, Montreal International honoured
January / February 2017 Canadian Grocer
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Mo
re t han
80%
of spa the fl oor ce is boo alread ked y .
LOOK DEEPER
Toronto The North American food innovation exhibition
MAY 2 TO 4, 2017 ENERCARE CENTRE, TORONT O 930 exhibitors from 50 countries 15,000 visitors from 60 countries More than 30 conferences and workshops
sialcanada.com an event by
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SIAL, a subsidiary of Comexposium Group
MILESTONES the Western Canadian chain’s entrance to the Winnipeg market at Northgate, St. James and Bridgwater. The Northgate location offers 6,000 global products and features a Starbucks. All three stores feature an in-store pasta maker that will produce ravioli and nine varieties of perogies, as well as an in-store tortilla maker. The Northgate location will serve as the delivery hub for Save-On-Foods in Winnipeg.
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L’ANCETRE; SAVE-ON-FOODS
L’Ancêtre Cheese Factory won 23 awards for its organic dairy products. The awards were for 10 different products including its cheddars, butters, a parmesan and an Emmental.
foreign subsidiaries in greater Montréal for contributions to the city’s economic development. Danone Canada was one of three companies honoured for the greatest contribution to Greater Montréal’s economy between 2010 and 2015. Danone was selected for its commu-
nity engagement, its values towards sustainable development and its contribution to the agri-food industry.
Stores Some new store openings to know about: Save-On-Foods opened the doors to three new stores, marking
Gluten Free Expo takes place on Jan. 14 and 15, 2017 at 999 Canada Place, Vancouver. Retailers can discover and sample hundreds of gluten-free products and learn from experts. Learn more about the show at glutenfreeexpo.ca. / The Grocery Foundation, Night to Nurture Gala is Feb. 4, 2017 at the Metro Toronto Convention Centre. It’s an opportunity for the grocery industry to come together to make a positive difference to children in Ontario by supporting breakfast programs and Kids Help Phone.
Save-On-Foods celebrated its Winnipeg debut with in-store product sampling and familyfriendly events. Local rock legend, Randy Bachman, signed autographs at all three stores.
The event features big name entertainment, which in the past has included Michael Bublé, Maroon 5 and OneRepublic. Visit groceryfoundation.com to purchase tickets.
Confection meets snacking with new OH HENRY! and HERSHEY’S Cookies ‘N’ Creme Mix
AVAILABLE October 2016
AVAILABLE December 2016
AVAILABLE December 2016
AVAILABLE October 2016
Mix drives incremental category spend 1 with the power of Hershey brands
Contact your Hershey sales representative 1-800-268-1304 / 1-800-361-8245 (Quebec) or your wholesale representative for further information.
1 Hershey - Canadian Loyalty Study – June 2016
Assorted Mix Tube Prepack - 180 ct 40 HERSHEY’S Mix Tube 56 g; 60 REESE® Mix Tube 56 g; 40 OH HENRY! Mix Tube 56 g; 40 HERSHEY’S Cookies ‘N’ Creme Mix Tube 52 g
Assorted Mix Canister Prepack - 54 ct 18 REESE® Mix Canister 170 g; 18 OH HENRY! Mix Canister 170 g; 18 HERSHEY’S Cookies ‘N’ Creme Mix Canister 160 g
More Ideas on page: 18 Mobile adoption 19 Food prices 20 Front-line staff 21 Bigger basket
IDEAS Retailers, suppliers, shoppers, insights
FROM CHEF TO CPG Order up! Celebrity chefs are making the leap from restaurant to grocery retail By Mark Cardwell
CANADIAN PRESS
MATT DEAN PETTIT CREDITS LUCK, TIMING AND culinary skill for his rise to celebrity chef status in Canada. But the Food Network Canada star says entrepreneurial zeal, hard work and all-in personal investment were the ingredients needed to create a retail brand of seafood products inspired by his award-winning restaurant menu. Pettit’s first product—a pre-packaged fresh lobster roll based on the top-selling item at his three Rock Lobster locations, the last of which closed this summer— launched at a dozen Sobeys Urban Fresh stores in Toronto in 2014. Since then, Matty’s Seafood’s range of products has grown to include a line of a half-dozen seafood dishes including lobster chowder, lobster bisque and frozen lobster macaroni and cheese. They’re sold at more than 1,000 retail locations across Canada and the United States. “It took a lot of hustle and cold calls, plus $50,000 from my own pocket to get things going,” Pettit says. “But it’s satisfying for me to create restaurant-ready dishes that people can buy and easily
Chef Matt Dean Pettit, owner of Matty’s Seafood
January / February 2017 Canadian Grocer
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WANT MORE? Visit CanadianGrocer.com for extended coverage on many of our IDEAS stories
prepare in the comfort of their homes.” Pettit is not alone. In recent years, chefs across North America have developed or lent their names to restaurant-inspired consumer packaged goods for the retail food market. “[Chefs] bring star power and credibility, and we bring manufacturing, marketing and sales know-how,” says Mike Audi, national VP of sales of Gia Russa. The U.S. company makes and distributes Italian foods at its plant in Youngstown, Ohio. Gia Russa has developed some two-dozen brands of products with American restaurant chains and celebrity chefs such as Mario Batali and Guy Fieri. Audi says Gia Russa likes to work with chefs who are committed to quality, but who are also realistic about the industrial challenges of converting food items they make fresh in their kitchens for immediate consumption into longer-lasting CPGs. “Chefs are very opinionated people,” says Audi. “Some say: ‘This is my recipe, and this is the way to make it.’ But we make products for mainstream palates that need to have shelf life. So sometimes we walk away.” If you can’t reproduce a signature dish or flavour profile that’s 95% as good as in a restaurant, you shouldn’t be doing it, says Peter Neal, co-founder, and co-owner of Neal Brothers Foods. Peter and his brother Chris distribute some 100 healthy snack food brands under the Neal Brothers name. Among them are kettle chips developed with Vancouver chef and former Dragons’ Den star Vikram Vij, (called ‘Vij’s Delhi-licious’) and now-discontinued lunch kits that contained Pettit’s lobster rolls and single-serving size bags of Neal Brothers’ maple bacon kettle chips. “Trying to replicate an authentic smell and taste out of the pot is very hard to do,” says Neal. David Soberman agrees. A professor of marketing at the University of Toronto’s Rotman School of Management, Soberman says the aromatic compounds that give foods their flavour can be deactivated during the manufacturing journey from restaurant to retail. “It’s part science, part art,” he says. “You have to tinker with formulas to add shelf life.” Soberman says chef-inspired products carry the omnipresent risk of all celebrity endorsements. “If the person is caught in a scandal it can create a real problem for you,” he explains. Celebrity chef products, he adds, “narrow down your marketing message to foodies.” But, if they’re willing to pay more for those items than generics, that can have real appeal. Many people, Soberman says, also have the means and
Matt’s retail products are inspired by Rock Lobster menu items desire to shell out more to buy high-quality CPG food items. “I feel that as our society gets more affluent and families get smaller, people are spoiling themselves more and are ready to spend to eat more sophisticated foods,” he says. “Even with some CPG staples, people are going for higher end ones with quality ingredients.” Making money, however, is not the motivating factor for some chefs who lend their names to food items. For celebrity chef Jamie Kennedy—who has written and tested recipes for Canada’s Own, which specializes in soups, stocks and chilis—it’s about supporting local agriculture. A Canadian pioneer in the farm-to-table movement and a champion of local foods, Kennedy admits he was once tempted to try and develop a line of food products for the retail market from his farm in Ontario’s Prince Edward County. “I quickly realized that it requires a huge effort to bring it to market, that it’s not a slam dunk,” he says. “You have to jump through several public health hoops. Just the changes I would have had to make to my kitchen would have cost me $750,000 to $1 million. “I can understand the temptation of chefs wanting to make money and reaching a broader audience than a 50-seat restaurant,” adds Kennedy. “But developing an idea and finding the co-packers to do it right is a daunting task.”
WIRELESS! KIND OF... CANADIANS’ AWARENESS OF MOBILE PAYMENTS IS RISING, BUT CASH AND PLASTIC ARE STILL KING
57% 100
By Meagan Kashty
DON’T CUT YOUR CARD JUST YET. A study by Accenture shows mobile payments in Canada have remained flat this past year.
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use debit and credit cards for payments
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63%
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MATTY’S SEAFOOD; ISTOCK
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IDEAS INCOME HAS AN EFFECT Respondents earning between $80,000 and $100,000 seem to be most affected by changing food prices. Sylvain Charlebois, the survey’s project leader, speculates that those making above average incomes might be financially stretched with mortgage and car payments weighing on them and, therefore, more anxious about how to also pay grocery bills.
Who’s got the bill?
ONTARIO’S ALL ABOUT CHANGE
When it came to regional breakdowns, Ontario shopA STUDY FROM DALHOUSIE UNIVERSITY TAKES A DEEP pers were found to be more DIVE INTO HOW FLUCTUATING FOOD PRICES ARE likely to make changes to what they eat. Consumers IMPACTING THE WAY SHOPPERS BUY GROCERIES in Ontario and British CoBy Meagan Kashty lumbia are most likely to PRICE IS NO OBJECT? WRONG “take action” to combat price fluctuIn a study titled “Pre-Shopping Habits ations, including looking at flyers or and Consumer Vulnerability”, released their alternatives and changing eating in November, Dalhousie researchers sur- or buying habits. In these provinces, veyed more than 1,000 adults across Charlebois says, consumers do more Canada to determine if price changes bulk shopping, and he speculates higher were prompting them to rethink how real-estate prices are pushing shoppers to they shop for groceries. Unsurprisingly, find ways to economize on food. it turns out price does have an impact on how shoppers navigate the aisles. QUEBEC IS CONSCIENTIOUS The majority of respondents (53.4%) Consumers in Quebec were more likely have changed the way they shop for to have noticed food price increases over groceries in the past 12 months due to the past year, with Ontario falling in a fluctuating prices, and almost 70% have close second, and the Atlantic provinces become more price conscious. What’s coming in third place. Quebec shoppers more, 60% are looking for more deals in were also the most likely to plan meals grocery stores and 57% are stocking up based on what is on sale. KD and tomato soup for dinner, anyone? on sale items.
Why are North American consumers not using mobile phones for in-store payments?
37% say they believe cash and plastic are ine for their payment needs 21% prefer not to register payment credentials in their mobile phone 19% are concerned unauthorized transactions may happen
2016 NORTH AMERICA CONSUMER DIGITAL PAYMENTS SURVEY
T OT? HO OR N Here’s what is trending in the food business
TOP SELLER FOOD PRICES: After a year of high food prices, shoppers may inally have some relief. In November, both Metro and Loblaw reported that food prices are falling. Loblaw president Galen G. Weston noted that when inlation was high, shoppers were switching to cheaper items. “We’re reducing prices to see if we can draw customers back in,” he said.
SHELF-STABLE WHOLE MILK: A new Toronto study has found that kids who drink whole fat milk are leaner and have higher vitamin D levels. Researchers speculate that it’s because children who down a glass of whole milk feel more satiated and are, therefore, less likely to eat junk food afterwards. The lip side? Childhood obesity has tripled over the past 30 years.
EXPIRED FOOD BANKS: A new report suggests more Canadians are relying on food banks. Food banks in eight out of 10 provinces saw increased trafic this past year, with the biggest jumps in Alberta, Saskatchewan, Nova Scotia and the territories. Food Banks Canada says usage is partly driven by the failure of government to support people facing tough times. January / February 2017 Canadian Grocer
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WANT MORE? Visit CanadianGrocer.com for extended coverage on many of our IDEAS stories
ON THE FRONT LINES Your front-line staff get feedback first, both good and bad. How do you boost troop morale? By Mark Cardwell
LUC LAMBERT IS UNEQUIVOCAL WHEN IT COMES TO THE IMPORTANCE OF THE 1,200 people who work for his eight Sobeys-bannered stores in Montreal’s suburban South Shore region. “Our employees are our most important asset,” said Lambert, who together with his brother Bruno owns five IGA Extras, one IGA Express, and two Dépanneur Voisin corner stores. “We work
P LL RESULTS IS YOUR STORE DEALING WITH ABANDONMENT ISSUES? By Meagan Kashty
The city of Kitchener, Ont. made news this past September when a municipal politician introduced a motion calling on city staff to ind a solution to a large number of abandoned shopping carts littering the streets. Guelph, Mississauga and Ottawa are among the other cities in Ontario that have enacted bylaws that impose ines on retailers for carts that are picked up and impounded by city employees. But are abandoned carts as big of an issue for grocers as it seems? We asked our readers.
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January / February 2017 Canadian Grocer
hard to keep them happy.” In addition to morale-boosting incentives like awarding gift certificates worth $50, $75 or $100 to employees who top the rankings of monthly evaluations done by an independent firm, and an annual gala complete with limousines, supper and prizes for the top 125 employees, the Lamberts provide professional training programs like Sobeys’ Leader Go for department managers. They have also developed a customer service program for employees with some 30 dos and don’ts, including the need to give immediate attention to customers and using the more formal “vous” when addressing customers and colleagues. “Everything we do is based on respect and communication,” said Lambert. “We don’t accept that anyone, whether a customer or an employee, is rude with our people. When it happens, our managers tell the person politely but firmly that it’s unacceptable. If they persist, we ask them to leave.” Incentives, training and respect are cornerstones, experts say, for building and maintaining morale among front-line employees like department managers and cashiers. In a highly competitive and polarized market like the grocery industry, head offices are tasked with looking at the big picture to find the right business direction for their chains, while store managers focus on day-to-day operations. “Store employees are the face of the franchise as well as a sounding board for customer feedback, both positive and negative,” said Bruce Winder, a retail consultant and former senior manager with several leading Canadian retailers. “You can make all the plans you want at head office, but if your staff can’t deliver in that brand moment of truth on the store
We asked readers on CanadianGrocer.com:
Are abandoned carts a big issue at your store?
33%
CARTS GO MISSING EVERY SO OFTEN, BUT IT’S PAR FOR THE COURSE.
THE THORN IN 27% THEY’RE MY SIDE. IT SEEMS LIKE THERE’S CONSTANTLY A CART GONE ROGUE. NOT AT ALL. IF A CART’S 24% NOT IN A CORRAL, IT’S WITH A SHOPPER. ISSUE ENOUGH THAT I 16% HAVE STAFF KEEP AN EYE OUT FOR THEM IN THE PARKING LOT.
GETTY IMAGES; NATREL; DAIRY FARMERS OF CANADA
+
IDEAS floor, it’s all for nothing.” Like all people, added Winder, employees need positive reinforcements like public recognition, gift cards, bonuses or fun things like pizza parties to show their efforts are appreciated. “It helps to improve everything from recruitment and retention to productivity,” said Winder. “It doesn’t have to be big like an “Employee of the Month,” though it can be, which is why the best retailers do it. Little things like a staff celebration to recognize an employee or tangible rewards like a dinner or a day off can go a long way with people. They are certainly better than negative beat-downs from managers whenever something goes wrong. That kills morale and gets people looking for other jobs.” For Pierre-Alexandre Blouin, working to boost and maintain morale is doubly important for grocers because of the low wages and uneven work schedules that are hallmarks of the retail food industry. “Working in a grocery store is not always a person’s first career choice,” said Blouin, vice-president public affairs for the Association des détaillants en alimentation du Québec, which represents 8,000 food retailers of all stripes in la belle province. “It’s hard for our members to offer competitive salaries. And reconciling family and work is hard for employees because we’re open year-round and on weekends and at night. That’s why we get a lot of students in their first job.” According to Blouin, providing training and support for the handling of customer complaints is essential if stores hope to recruit and retain employees. For Alain Sureau, who owns a BonSoir gas station and corner store in St-Félix-de-Valois, a rural village an hour’s drive northeast of Montreal, encouragement and respect are the keys to keeping his dozen employees happy and motivated. “I always congratulate them when they do a good job,” said Sureau, whose business is one of 374 in the region certified by Oser Jeunes, a youth work program that provides training to employers on issues like reconciling work and school. Sureau asks his student employees to provide him with their schedules for school and other activities like sports teams so he can make work schedules around their availabilities. “That keeps everyone happy,” said Sureau, who has had several employees work at his store from ages 15 through 22, when they graduate university. “I don’t run my business like a dictatorship. I see it more as a little family.” CG
THE GENERATOR DAIRY FARMERS OF CANADA’S NEW LOGO SHOWS THAT INNOVATION IS ALWAYS POSSIBLE By Meagan Kashty
DAIRY FARMERS OF CANADA’S new logo was designed to be easier to understand and reinforce the positive relationship between farmers and consumers. Even an organization founded in 1934 is open to a shake up.
SEEING THE BIGGER BASKET How will the news stories of the day impact the way you do business? By Meagan Kashty
BETTER BUTTER DITCH THOSE NEW YEAR’S RESOLUTIONS AND FORGET THE days of dieting. Butter is back in a big way. Recent product launches show shoppers aren’t afraid of fat. First, Natrel launched Canada’s irst lactose-free butter in October. Made with organic cream, this is also the only butter with sea salt available from a dairy co-operative in Canada. Following that launch, Lactantia added three new varieties of butter to its portfolio. Its tomato basil butter is meant to be used for cooking and as a spread, while its sweet maple butter is intended to be served with wafles or pancakes. But perhaps more interesting is the launch of Lactantia’s third variety of butter—a European-styled butter churned to 2% higher fat, which the company says creates a smoother, creamier texture in cooking and baking. Do these innovations represent a shift in shoppers’ minds from low-fat to full-taste? You butter believe it.
SPENDING HABITS A NEW STUDY SUGGESTS NEARLY ONE-QUARTER OF Canadians are worried about how to pay for groceries, with more than 50% shifting their shopping habits amid luctuating food prices. More than half of respondents to the Dalhousie University study also said they’ve looked for deals on groceries, stocked up on sale items and planned purchases before going shopping as a result of increasing food prices. Time to accommodate these price-conscious customers.
CHEESE, PLEASE OTTAWA IS SETTING ASIDE $350 MILLION to help dairy producers weather the impacts of Canada’s trade agreement with the European Union. The funding is meant to help producers deal with the reality of increased competition from European cheese-makers once the trade deal takes effects. It’s a great opportunity to push local in your cheese department and offer Canadian producers some support. Meagan Kashty is Canadian Grocer’s online editor. mkashty@ensembleiq.com
January / February 2017 Canadian Grocer
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SHOPPER SENSE Carman Allison
COMPETING IN THE NEW RETAIL LANDSCAPE Change is a constant in retail. To win, you need to keep up with your customers MODERN RETAIL HAS LONG BEEN guided by a powerful premise: the bigger, the better. Big was better for retailers because scale drove down unit cost and so raised return on investment. It was also better for consumers, who gained greater assortment, better prices and convenient onestop shopping. And big was better for suppliers, who benefited from greater shelf space to deploy brand and category portfolio strategies. Over the past 10 to 15 years, however, the modern retail store has evolved. Supply chain improvements have made it possible to achieve similar or even higher levels of profitability with smaller stores, paving the way for
smaller retail chains to expand and take share from larger competitors. But for some big-box retailers the shift hasn’t been a boon. The result: today’s retail environment is more fragmented than ever. Fierce competition has led to a dependency on promotions among large retailers. The only constant in the retail environment is change. As retailers consider where to go from here, there are a few truths to keep in mind: Differentiation and a focus on the consumer will drive growth. The retail landscape is crowded and technology has given consumers access to more information and
greater power over shopping. Retailers must give shoppers a reason to choose them over their competitors, and it can’t just be about price. To differentiate, retailers must evolve with the needs of their customers—whether it’s a digital tool to make shopping easier or staff with deep expertise that can help consumers select products. And this process must be ongoing, with retailers continuously monitoring and adjusting. Thinking small can yield big rewards. Consumers are dictating how, when and where they shop. And they’re increasingly looking for control not just over the shopping experience, but over the features
of the products and services, too. In the future, we may see consumers more directly involved in product development as some brands rely on crowdsourcing and co-creation to add value, differentiate and retain loyalty. Greater localization is also likely. Retailers can now leverage vast amounts of data to tailor recommendations and provide relevant advertising and offers—delivered in real time—based on consumers’ past purchasing, their preferences and the shopping occasion. The role of the physical store will change. Stores aren’t going to disappear any time soon, but they will undergo a dramatic transformation as e-commerce grows and shopper expectations change. Retailers need to consider what role physical stores will play in their omnichannel strategy and how they can use them to strengthen their offerings and deliver value each trip.
CARMAN ALLISON is vice-president of consumer insights at Nielsen in Toronto. Follow him @CarmAllison.
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GETTY IMAGES
Analytics can enable growth. Big data has enormous implications for marketers, but its potential goes beyond providing relevant ads and offers. Data has the power to help retailers solve big business problems and identify opportunities. Winning retailers leverage advanced analytics and invest significant human and financial capital in these capabilities, using data to optimize assortment, inventory and supply chains and to make pricing decisions that reduce costs and maximize profits in real time. CG
FRESH
SPECIAL PROMOTIONAL FEATURE
Snap Beautiful bananas at your beck and call. When it comes to one
365
of North America’s best-selling fruits, serving second-rate bananas just won’t do.
As an industry-leading banana supplier, Del Monte is your source for the quick and consistent product you need to keep up with customer demand. You can rely on us to deliver green and pre-conditioned bananas every day of the year.
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freshdelmonte.com | 1-800-950-3683 | fruits.com
© 2016 Del Monte Fresh Produce N.A., Inc.
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DelMonteFresh
FRESH EXPERIENCE
BANANAS
BANANA SALES IN CANADA 800000 700000
$629,717.50
600000
+2%*
$614,749.70
500000 400000 300000 200000
1,707.00
100000
1,337.90
+28%*
0
Dollar Sales Units (000s) (000s)
Dollar Sales Units (000s) (000s)
Latest 52 Weeks
Latest 52 Weeks YA
*% change versus a year ago
SEASONALITY INDEX FOR $ SALES 120
Source: Nielsen MarketTrack, National xNld, all channels, 52 weeks ending August 20, 2016.
S P E C I A L P R O M OT I O N A L F E AT U R E I N
J A N UA R Y / F E B R UA R Y 2 017
Aug 20, 2016
jul 23, 2016
Jun 25, 2016
May 28, 2016
Apr 30, 2016
Apr 2, 2016
Mar 5, 2016
Feb 6, 2016
Jan 9, 2016
Dec 12, 2015
Nov 14, 2015
Oct 17, 2015
Sep 19, 2015
Aug 22, 2015
Jul 25, 2015
Jun 27, 2015
May 30, 2015
May 2, 2015
Apr 4, 2015
Mar 7, 2015
Feb 7, 2015
Jan 10, 2015
Dec 13, 2014
Nov 15, 2014
Oct 18, 2014
80
Sep 20, 2014
100
Pow First in fresh. With our Del Monte Gold® Extra Sweet
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#
pineapple, we’re the world’s leading supplier and marketer of fresh pineapples. And, Del Monte always delivers the highest-quality fresh cut and whole fruits and vegetables, plus value-added offerings, to help you make an impact with your customers.
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© 2016 Del Monte Fresh Produce N.A., Inc.
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@DelMonteFresh
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DelMonteFresh
FRESH EXPERIENCE
PINEAPPLES
PINEAPPLE SALES IN CANADA 1200000
$108,662.90
1000000
+1%*
800000 600000 400000
11,031.00
200000
$107,247.10
–11%*
12,348.90
0
Dollar Sales Units (000s) (000s)
Dollar Sales Units (000s) (000s)
Latest 52 Weeks
Latest 52 Weeks YA
*% change versus a year ago
SEASONALITY INDEX FOR $ SALES 150
120
Source: Nielsen MarketTrack, National xNld, all channels, 52 weeks ending August 20, 2016.
S P E C I A L P R O M OT I O N A L F E AT U R E I N
J A N UA R Y / F E B R UA R Y 2 017
Aug 20, 2016
jul 23, 2016
Jun 25, 2016
May 28, 2016
Apr 30, 2016
Apr 2, 2016
Mar 5, 2016
Feb 6, 2016
Jan 9, 2016
Dec 12, 2015
Nov 14, 2015
Oct 17, 2015
Sep 19, 2015
Aug 22, 2015
Jul 25, 2015
Jun 27, 2015
May 30, 2015
May 2, 2015
Apr 4, 2015
Mar 7, 2015
Feb 7, 2015
Jan 10, 2015
Dec 13, 2014
Nov 15, 2014
Oct 18, 2014
60
Sep 20, 2014
90
FRESH EXPERIENCE
VEGETABLES, FRESH CUT Innovative products are giving a boost to the fresh-cut veggie category. Jacob Shafer, Mann Packing’s marketing and communications specialist, explains why this is the case and how retailers can sell more of this good stuff. How are fresh-cut veggies performing at retail? The fresh-cut vegetable category is performing well with more and more innovative new products like our awardwinning Mann’s Culinary Cuts line of fresh, uniquely cut vegetables. All the veggies in this line are washed and ready to cook, and are versatile enough for multiple uses such as in salads, stir-ies, soups and casseroles. For the health conscious consumer, these products are ideal swap-outs for pasta and they are also preservative free and gluten free. The veggies are cut into distinctive shapes including Sweet Potato Ribbons, Butternut Squash Zigzags, Finely Chopped Caulilower, Shaved Brussels Sprouts, and Sliced Broccoli Clovers, that will appeal to consumers.
How can retailers sell more fresh-cut veg? Retailers can create healthy destination categories in their stores; a place where consumers can conveniently ind
fresh vegetables, snacking trays and specialty vegetables. Destination categories help consumers easily ind new and innovative products. Retailers can expand shelf oferings of high demand cut vegetable items and should understand the data and the trends driving the category to take advantage of all selling opportunities.
Can you talk about Mann’s sustainability efforts— specifically around packaging? Virtually all packaged convenience vegetables in the retail market are sold in bags, some with gussets, zippers or other attributes. This minimizes packaging waste, which is a key social responsibility initiative with Mann Packing. This reduces cost to the retailer and the consumer and saves space in refrigerators. And all of our corrugate and plastic packaging is recycled. Mann’s has zero packaging waste.
CUTTING EDGE MEETS CUT VEG Mann’s Culinary Cuts® target popular eating trends like carb swap, Paleo, gluten free and Whole30®.Culinary Cuts bring incremental sales to the cut veg category* along with vendor consolidation opportunities. Is your category on the cutting edge? *Mann’s Culinary Cuts® Butternut Squash Zig Zags and Sweet Potato Ribbons are two of the fastest selling branded squash and sweet potato items where sold. – AC Nielsen 13 W/E_07/30/16
Mann Packing Co., Inc., Salinas, CA • 800.884.6266 • CulinaryCutsClub.com
FRESH EXPERIENCE
FRESH TRENDS Inevitably it’s the time of year when predictions abound about what foods and drinks consumers will be buying, preparing and eating in the months to come. The good news is that fruits and vegetables, in some form or other, figure prominently into many of these forecasts. Here’s a look at a five of the more interesting fresh trends to watch in 2017. Plant butchery
Veggie yogurt
No, this trend’s not about gardeners running amok in the vegetable patch, rather it’s about “a new breed” of butcher shops that are catering to both vegans and meat lovers alike. Sterling-Rice Group lists plant butchery among its top 10 culinary trends for 2017. According to the irm, these shops are creating plant-based mock versions of chicken, steak and charcuterie and not just from soybeans and seitan—corn, peas, legumes, chickpeas and fungi are being employed in innovative ways to “entice meat eaters to make the move to Meatless Mondays.”
For some yogurt fans good old strawberry and vanilla are just so humdrum. Seeking a little more excitement in their daily yogurt routine, these consumers are turning to savoury concoctions that feature the likes of beets, sweet potatoes, carrots, spinach and tomatoes. While consumers have been experimenting with savoury yogurts at home for some time, manufacturers like Chobani and Blue Hill in the U.S. are wooing consumers with convenient commercial options. The savoury segment’s popularity appears to be spreading, with U.K. retailer Waitrose adding vegetable yogurt to its list of foods we’ll be eating in 2017.
New ways with watermelon Move over coconut, there’s a new lavour in town— watermelon. Well maybe not new, exactly, but watermelon is having a moment, and the cool fruit is poised to be a hot ingredient in 2017. In its annual Food and Drink Report, U.K. retailer Waitrose identiies cold-pressed watermelon water as a product consumers could be drinking up this year— it’s popularity boosted by Beyoncé’s investment in the WTRMLN WTR brand. Long discarded watermelon seeds, too, are becoming a new favourite of the health-conscious and are appearing more and more as an ingredient.
Chlorophyll craze Consumers can’t seem to get enough chlorophyll. Touted as a super nutrient, chlorophyll boasts a wide range of health beneits with consumers swearing by its power to do everything from improve digestion to helping with weight loss and making skin look radiant. As a result, chlorophyll is popping up in all kinds of products such as juices, supplements and energy bars. But according to Health.com, consumers who are particular about what they put in their bodies needn’t bother with special supplements as the “green gem” is naturally abundant in green vegetables so they can just load up on spinach, kale and Brussels sprouts.
Waste not, want not One encouraging response to our shameful food waste problem is the growing trend of utilizing the entire food— stems, stalks, rinds and all. According to Sterling-Rice Group, items once considered trash are now being turned into delicacies; for instance, watermelon rind pickles, chips and burgers made from discarded juice pulp and even vegan leather crafted from pineapple leaves. Innovative companies that are inding new uses for waste are winning not only the loyalty of conscious consumers but they’re also adding to their bottom lines, according to Sterling-Rice. S P E C I A L P R O M OT I O N A L F E AT U R E I N
J A N UA R Y / F E B R UA R Y 2 017
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January / February 2017 Canadian Grocer
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RH By Rebecca Harris
At your service
How mobile is changing loyalty programs and why personalization is key to success
a sale on potato chips in your store’s weekly flyer sounds simple, right? But as we all know, it’s more complicated. Ken Kuschei, director of consumer insights at Longo’s, explains: “You might have enough room on the flyer to put two bags, so you’ll put regular and barbecue potato chips.” However, if a customer prefers sour cream and onion or dill pickle, the image on the flyer may not resonate. Although chips may be small potatoes, Kuschei uses this example to illustrate how mobile is reinventing loyalty programs in a big way. Users of the Longo’s app, which integrates the grocer’s Thank You Rewards program, receive personalized flyers based on past purchases. That means those sour cream and onion or dill pickle lovers will see their chips of choice front and centre in their custom mobile phone flyers. Mobile is pushing grocery shopping to become a more personalized experience, says Chris Bryson, founder and CEO of tech provider Unata, who worked with Longo’s on its app that launched back in 2013. People are being trained to expect personalized content, he adds. “Consumers expect a one-to-one experience because that’s what they have with every other leading mobile experience, whether it’s Facebook or Netflix.” As consumers shift to digital, there are huge opportunities to bringing grocery-chain loyalty programs to mobile. But also
Advertising
some challenges. The 2016 Bond Brand Loyalty Report indicates there is still a way to go for many retailers’ apps in terms of improving the user experience and level of personalization. The survey found that while 44% of Canadian consumers would like to engage with loyalty programs through a mobile device, only 15% of respondents were satisfied with how reward points could be earned, and only 12% felt very satisfied. Scott Robinson, VP of design and strategy at Bond Brand Loyalty says a high percentage of consumers want to interact with a brand or a program through a mobile app, but they don’t find the set of features and functionalities offered desirable. “That says to us that brands still need to put their finger on exactly what their customers are seeking through their app experience because it seems to be falling short of expectations.” Still, loyalty apps offer grocers numerous possibilities for engaging customers and providing new experiences. Jeff Berry, senior director of research and development at LoyaltyOne, says grocers can leverage loyalty apps as part of an integrated, personal shopping experience. “Grocers who use an app to shape real-time interactions with their customers in-store, leveraging the insights they have about the customers from loyalty program data, can create personalized, meaningful interactions with their customers,” says Berry. “Connecting a loyalty app to techologies like beacons and smart shopping carts would allow grocers to use loyalty programs for more than promotions and points.” January / February 2017 Canadian Grocer
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WHATEVER YOUR JOB, FORD TRANSIT CONNECT WORKS.
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*When properly equipped. Maximum payload with Transit Connect Van. **When properly equipped. ©2016 Ford Motor Company of Canada, Limited. All rights reserved.
Unata’s Bryson agrees. He sees opportunity for grocers to create personalized in-store interactions with customers through, for example, beacon technology. Shoppers could interact with store displays to discover who produced a desired bag of potatoes and where. Or they could interact with store signage to find gluten-free products down an aisle. “When you combine mobile with loyalty and the user’s preferences or purchase history, you can personalize the shopping experience,” he adds. For the past few years, Vancouver Island chain Quality Foods has tied its app to its in-store experience. In 2012, the grocer added “My Deals” to its new app, which integrates the Q-Card loyalty program. Customers can select offers in the app’s My Deals section, and the discount is automatically applied at checkout. Shoppers can also use the app to check their points balance and view the day’s “Appy Hour” special from 4 p.m. to 6 p.m. “You can cruise the aisles of any Quality Foods store and find shoppers with phones and tablets, looking at specials and activating My Deals,” says Rob MacKay, marketing director at Quality Foods. “We show them at the top of the screen how much money they have saved to date by using the app.” MacKay says the integration of Q-Cards with the app has become an important part of Quality Foods’ relationship with its customers, but he doesn’t see the app completely replacing plastic cards anytime soon. “While we feel that we have an edge in app acceptance and usage, we are still in the early stages of this technology,” he says. “Proximity marketing appears to be the next phase, but it may be a little too personal for many people. We are very careful to ensure we don’t breach the trust and comfort level of our [customers].” Meanwhile, Longo’s is looking at ways to evolve its app, which currently allows users to easily access their points balance, see their past purchases, scan products in store to view ratings and reviews, and create shopping lists. Kuschei says the company is considering beacon technology as well as expanding its geo-fencing capabilities—two technologies that allow for real-time, location-based marketing. Longo’s even looks to innovations outside of retail to see how it can incorporate new features into its mobile experience. One recent example is Pokéman Go, the location-based augmented reality game that has fans hunting for Pokéman creatures with their mobile phones. “I think that type of technology is worth paying attention to,” says Kuschei. “I’m not sure how exactly we would integrate that into a loyalty program, but new technologies usually start in the gaming world.” And eventually, they can be seen in loyalty programs. Other ideas around gamification are also being considered, such as entertaining ways for customers to earn points. Longo’s app users can already earn points by rating products, which Kuschei says allows the company to make better business decisions as it tells them what customers like. “But it also allows the customer to come closer to getting free product as they help us,” he says. One of the biggest challenges grocery retailers have in the mobile space is keeping up with the rapid developments in technology. “The pace of change and innovation is really difficult because modern shoppers’ expectations are high and continue to get higher,” says Unata’s Bryson. “If your application doesn’t feel like it was made in the same year or decade as today’s hottest apps, and if the user experience isn’t on par, the shopper is going to give up.”
RM Rob MacKay, Quality Foods
Proximity marketing appears to be the next phase, but it may be a little too personal for many people.
Another challenge is that grocers are now competing with coupon and lyer-aggregating apps such as Flipp and Checkout 51. A recent report from BMO Capital Markets stated that Flipp has a greater number of unique visitors than Loblaw’s PC Plus app and Shopper’s Drug Mart’s Optimum app. The report said BMO considers Flipp to be a “looming threat,” particularly for discount grocery banners. “People just don’t have the attention span to go in 15 different directions to save a handful of dollars on their weekly grocery basket,” says Sean Claessen, executive VP of strategy and executive creative director at Bond Brand Loyalty. If you’re a grocer, he adds, “The challenge is you now have to convince shoppers that your app is worth space on their phone and worth paying attention to, more so than Flipp and Checkout 51, and a hundred other ways to get coupons and deals.” However, grocery retailers have one big advantage over the competition: a more comprehensive view of the customer and what’s in their cart. “Checkout 51, Flipp and others just get a narrow understanding based on what coupons they’re downloading or redeeming in a way that is not true for the grocer,” says Robinson. With their data, grocers can gain “a broader sense of needs that a consumer might have… and not play the finite single-product price game.” Grocers may be armed with data and have the ability to deliver personalized content, but they can’t forget about traditional channels. Content needs to be omnichannel, says Bryson. Mobile is great, but the experience has to also work well online. And that personalized content should still also be delivered by email. Bryson believes the grocery industry is still a long way away from being able to take advantage of all the shiny new objects. “Fundamentally, what grocers need to do is invest in their data. Invest in their content around products. And invest in an infrastructure that allows them to deliver personalized content.” Only then will they keep customers engaged and keep them coming back to the app and to the store. Now that’s loyalty. CG January / February 2017 Canadian Grocer
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January / February 2017 Canadian Grocer
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Meet eight up-and-coming leaders in the Canadian grocery industry. Here are our 2016 Generation Next Award winners. By Lisa Bendall // Photograph by Mike Ford
USE OF THE LIBRARY ROOM WAS GENEROUSLY PROVIDED BY THE FAIRMONT ROYAL YORK, TORONTO
January / February 2017 Canadian Grocer
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KIM BÉDARD
DIRECTOR NATIONAL PROCUREMENT METRO, QUEBEC
Kim Bédard, 38, has been with Metro for 15 years. She began as an IT intern, but a steady series of promotions led to her current post, which she’s held since September. According to colleagues, Bédard consistently takes on challenges outside her job description. Maybe that explains why Bédard chose to earn an executive MBA, early in her career, in English—a
language that she wasn’t yet fluent in. Bédard has often defined her job, whether that means developing and expanding the health segment in stores, or finding a way to get local products on more shelves. Other initiatives include increasing sales at Quebec and Ontario stores through comprehensive improvements in their produce departments. Her nominator, Metro communication advisor Geneviève Grégoire, describes Bédard this way: “She traces her own path while bringing her knowledge and her responsibilities to greater and greater heights.”
JAMES QUINLAN
SENIOR MANAGER OF SHOPPER MARKETING COCA-COLA CANADA, ONTARIO
James Quinlan is just 30, but his youth has proven to be an asset in his job with Coca-Cola Canada, where he’s worked for the past three years (This New Zealander used to work for Parmalat in Australia.). As a millennial, he can relate to younger shoppers who are, for instance,
MUDIT RAWAT
FOUNDER AND CEO URBERY, ONTARIO
In 2014, when Mudit Rawat left his corporate position at Sobeys to start a new venture, mobile commerce was taking off and more consumers were looking for time-saving solutions. “I saw an opportunity to build a company that would allow customers to get groceries quickly,” recalls Rawat, 32. Besides offering a quicker turnaround
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than other online grocery delivery services, Urbery is more personalized. Using smart tools, consumers get real-time tracking. Urbery can interact with shoppers, and retailers can double-check consumers’ orders. “With logistical challenges, it’s easy to build technology solutions,” says Rawat. “But to buy an avocado the way you want it, ripe or not ripe—there was no process for that.” Since launching in the Toronto area last year, Urbery has enjoyed 175% growth, high user ratings and has partnered with companies such as Unilever and Kimberly-Clark Canada.
making use of digital and mobile tools to plan and make their purchases. As senior manager of shopper marketing, Quinlan has applied a shopper-centric focus to his initiatives. “James is resourceful in sourcing best global practices,” says Tim Lute, VP of channel strategy and marketing at Coca-Cola. “He’s passionate about the industry, and he’s always studying what retailers abroad are doing.” Quinlan’s team led the shopper marketing plans behind the “Play-A-Coke” summer music playlists, the Diet Coke “One of a Kind” custom bottles and the recent launch of Coke Life.
MICHAEL CATALANO
REGIONAL SALES MANAGER WONDERFUL SALES, ONTARIO
When 35-year-old Michael Catalano started his grocery career in the deli department at Fortinos, he wasn’t yet out of his teens. Since then, Catalano has held positions at SC Johnson, Procter & Gamble and Wonderful Sales. Catalano’s leadership and win-win approach with customers has earned him multiple awards over the years, such as the SC Johnson Sales Director Award, said to be the company’s highest sales honour. This year, his team was recognized with the Ontario Produce Marketing Association’s Outstanding Achievement Award. Everywhere he’s worked, Catalano has driven growth and helped his customers by identifying and filling market gaps. For example, he launched POM POMS Pomegranate Arils Club Pack in Canada after his analysis of consumer shopping patterns. Not only is Catalano a rising star himself, but he also guides more junior employees, securing the next generation of leaders.
Save-On-Foods is thrilled to congratulate its very own Generation Next Award winner, Dawn Haig, for her dedication and commitment to the industry and for consistently going the extra mile for her customers and team.
Congratulations
Dawn Haig and to all of this year’s Generation Next Award winners!
DAWN HAIG
STORE MANAGER OVERWAITEA, BRITISH COLUMBIA
Dawn Haig took her first job with Overwaitea 20 years ago, working as a cashier right out of high school. Apart from a seven-year break at a tourist resort, Haig has been learning and growing with Overwaitea ever since. Haig, who just turned 38, was promoted to store manager of the Parallel Marketplace Save-On-Foods in October 2015. She credits her mentors for her rise
RAN GOEL
FOUNDER AND CEO FRESH CITY FARMS, ONTARIO
Launched in 2011, Fresh City Farms is Canada’s largest urban farm and a significant buyer and seller of organic food in the Toronto area. That’s owing to the vision of 37-year-old Ran Goel, a leader in the farm-to-table movement. Goel established Fresh City Farms to provide a more sustainable model of production, marketing and distribution of local food.
Even deliveries are made using reusable packaging and are delivered by electric bikes or cars. Not only does Goel provide organic produce to the neighbourhood, but he also serves the community in other ways. For example, his company donates food to schools and charities such as Second Harvest. Goel has also served on the board of directors of FoodShare. Fresh City Farms was the 2014 winner of the Ontario Premier’s Award for AgriFood Innovation Excellence and the Small Business winner at the 2014 Live Green Toronto Awards.
RANSOM HAWLEY
FOUNDER AND CEO CADDLE, ONTARIO
Ransom Hawley, 30, found it difficult to leave SC Johnson after working in sales and marketing there for almost seven years. But judging by the positive reviews and growing number of users of Caddle, the app he launched last year, it was the right decision. Caddle provides the grocery industry
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within the ranks—and for recognizing her work ethic, energy and innovative spirit. In her current position, Haig excels at finding efficiencies and executing best practices in operations. Sales at her Abbotsford, B.C., store, increased 45% over last year since she took the helm. Haig says that she enjoys encouraging newer team members, serving the Abbotsford community and connecting with the store’s customers. “One of my favourite parts of my job is helping Mrs. Jones to her car with her groceries, and seeing what that does for her,” she says.
with an opportunity to micro-target specific demographics by paying consumers to view advertising content. “If I hadn’t worked at SC Johnson and seen how hard it was to engage our users and how expensive and time-consuming it was to get consumer insights, I definitely wouldn’t have thought of this idea,” Hawley says. Caddle recently appeared on CBC’s Dragons’ Den and just received funding from the Ontario Centres of Excellence. Although the company’s still growing, Hawley is giving back: 10% of revenue goes to charity. “We still have a long road ahead, but I’m excited for what the future holds,” he says.
PABLO HERRERA CRUZ
CUSTOMER EXPERIENCE MANAGER, LOCALIZE, ALBERTA
Our youngest winner, Pablo Herrera Cruz, 29, is a founding member of Localize. The company helps grocery stores highlight local products for shoppers. Cruz supports the 300-plus stores currently participating in the labelling program. Cruz’s commitment to success
is evidenced by the increased sales for small- and medium-sized food producers across Canada. He earned a master’s degree in economic analysis of law from the University of Salamanca, Spain, and an international business degree from Copenhagen Business School. He has an understanding of the complexities of the grocery industry, shopper preferences and can educate retailers. “Pablo set up tutorials with our team and went through the program, answering questions, and followed up. He wanted to ensure it worked for us,” notes Tammy Averill, marketing manager at Country Grocer. “This program is his passion.” CG
INTERESTED IN NOMINATING SOMEONE FOR 2017? FOR THE PAST FIVE YEARS, Canadian Grocer has celebrated suppliers and retailers, under the age of 40 with the Generation Next Awards. The awards program acknowledges those who have committed to and provided innovative ideas in the industry. Go to CanadianGrocer.com for more information about how and when to nominate young talent for the 2017 awards.
GOOD ON YA, MATE!
to Kim Bédard, Director, Central Procurement Grocery and Health Products at Metro Her leadership, innovation and commitment to the grocery industry have earned her a Canadian Grocer’s Next Generation Award!
®/TM Coca-Cola Ltd., used under license.
CONGRATULATIONS JAMES QUINLAN on being Canadian Grocer’s 2016 Generation Next award winner.
Collaboration is no longer a nice to-do, but a need to-do. We must create avenues to work together to prepare for – and deal with – environmental disruptions. By joining forces we can mitigate the negative impacts on our supply chain, business infrastructure and the areas in which we operate. Collectively we must explore new ways to share information and coordinate efforts to establish financially feasible, innovative, and sustainable solutions for a successful future.
We encourage you to read our new white paper, Collaboration in Times of Uncertainty, at krugerproducts.ca/sustainability to better understand why a collective consciousness is needed for businesses to succeed.
Read on to learn more about the Leaders in Sustainability workshop and how issues related to megatrends and Canadian infrastructure are driving the need for collaboration.
FIFTH ANNUAL
© 2016, ® Registered and ™ Trademark of Kruger Products. L.P.
TWEET
By Shellee Fitzgerald // Photography by Roger Yip
At the Leaders in Sustainable Thinking conference we learned that to tackle our biggest problems we need to get better at working together
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POST
CRUMBLING INFRASTRUCTURE, population growth straining our already stressed resources, economic and political turbulence, climactic disasters, the rise of drug resistant diseases—all heavy stuff to absorb on an early morning in October. But these were some of the things Professor Richard Matthew of the University of California, Irvine’s, School of Social Ecology was describing to a group of sustainability leaders in a Mississauga, Ont. conference room. Disturbing trends, Matthew remarked, that if continue to go unchecked put humankind on a bleak trajectory. But the professor’s intent was not to dim the mood of the room. His mission, rather, was to give his audience, comprised largely of retailers and suppliers, a big picture view of the economic, social and environmental trends that pose risks to their businesses. The idea was that by identifying these troubling issues, a discussion could be sparked and, ultimately, a plan tackle some of the problems—together. Collaboration was the theme of the day. January / February 2017 Canadian Grocer
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Solution seekers: Working groups tackled common sustainability issues at conference The invitation-only event was an evolution of the Leaders in Sustainable Thinking roundtables that tissue-maker Kruger Products has teamed up with Canadian Grocer on over the last several years. This year, the aim was more expansive. Steven Sage, Kruger’s VP of sustainability and innovation, explained that he wanted to take the discussion to the next step “by getting more people under the tent and to really focus on collaboration.” But it wasn’t just about having more people under the tent, having the right people was key. Sustainability thought leaders from many of the big players in Canada turned up, among them: Loblaw, Walmart, Sobeys, Maple Leaf, McCain Foods, Unilever, Coca-Cola, Saputo, Tetra Pak, General Mills, Kellogg and Cargill. Also attending were leaders from companies beyond the realm of grocery (Canadian Tire, A&W, Grand & Toy and BASF) to lend broader perspectives to the day.
MORE COLLABORATION NEEDED “It would be wonderful to think that we’ve turned a corner to a more sustainable world, but the data does not support that,” Matthew told the group. He added that while parts of the world are seeing a bit of forest recovery and some better water management, this is mostly confined to the wealthiest parts of the planet, places like Canada and Europe. “But the overwhelming majority of people are not making that transition and we’re still seeing forests being cleared. We’re seeing pollutants going into the ocean. We’re still seeing tremendous amounts of air pollution in urban space. And we’re still seeing high levels of biodiversity loss around the planet.” The good news, he said, is that there are solutions to these complex problems. We just have to find a way to overcome barriers to collaboration. “It’s not that we don’t have the capacity or the ideas,” said Matthew, “it’s that we haven’t
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proven very good at coordinating our enormous resources to solve these things.” That’s not to say there isn’t good collaborative work being done to help the planet. There is. Global groups like The Consumer Goods Forum are combatting our massive food waste problem. The Science Based Targets Initiative is tackling greenhouse gases with a goal of limiting global warming to two degrees Celsius, while the Chemical Footprint Project is attempting to rid our supply chains of dangerous chemicals and the Marine Stewardship Council is working to safeguard future seafood supplies by promoting sustainable fishing. All good stuff, but more needs to be done and no single entity has the clout to tackle these complex problems alone. Where collaboration is concerned, however, it’s complicated. Competition and privacy concerns, willingness to make the necessary investment, commitment from a company’s top decision makers, can all throw up obstacles to engaging in collaborative initiatives in any meaningful way. “We have to be very clear minded about what we think collaboration means and what we are prepared to do in order to be collaborative,” John Coyne, vice-president and general counsel of Unilever Canada told the group. Drawing from his company’s experience, Coyne pointed to the Roundtable on Sustainable Palm Oil (RSPO), of which Unilever was a founding member. A ubiquitous ingredient, palm oil is found in everything from shampoo to ice cream, and unsustainable production of this high-impact commodity is responsible for devastating Indonesia’s forests and is a big contributor to climate change. “We had a guy working in our business for 13 years trying to get the Roundtable on Sustainable Palm Oil off the ground. Thirteen years! For a collaborative venture to do good work,” said Coyne. “But 13 years is not how much time we have available to solve any of these problems.” We’ve got to be thinking much more urgently, he added, and much more
Kruger Products’ Steven Sage
selflessly about how it is we want to do this work. “There are massive divides out there and we have to bridge those if we’re going to get to the scale, the synergy and the ideas behind collaborative ventures to work, and for that you need structure, you need discipline and you need investment.”
GETTING DOWN TO WORK One of the unique aspects of the Leaders in Sustainable Thinking conference was that those attending were asked to pull up their sleeves and do some work. Delphi Group consulting,
which organized and facilitated the day, worked with a steering committee of retailers and suppliers to look at priority areas for the companies and see where there might be some overlap and potentially some opportunities for collaboration. The overlapping areas identified were communities, health and nutrition, energy efficiency and climate change, and products and packaging. Attendees sorted themselves into groups, each dedicated to one of the areas, to discuss the issues and opportunities. Afterwards they shared what they came up with. Here’s what we learned:
(Left) Maple Leaf Foods’ Tim Faveri (Right) Professor Richard Matthew, University of California, Irvine.
January / February 2017 Canadian Grocer
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(Left) Unilever’s John Coyne (Right) Delphi Group’s Bruce Dudley
Those in the communities working group concluded that although their companies were investing in various programs, “none of us truly understood the impact our community programs were having in those communities—whether international or national,” said Maple Leaf Foods’ Tim Faveri, VP of sustainability and shared value. Speaking for the group, he said they could all benefit by coming together, at a pre-competitive stage, to form a group to enable better measurement of how these dollars are having a positive impact.
HEALTH AND NUTRITION In an attempt to curb obesity in this country, the federal government is overhauling its outdated Canada’s Food Guide. But the health and nutrition working group agreed that industry, particularly the largest companies with the most brand clout, should be playing a bigger role in educating consumers to help them make better choices. Bruce Dudley, senior VP at Delphi Group, said next steps for collaboration could include creation of a group that has clear objectives, governance and oversight and where companies can come together on these issues and actually deliver value. This will help justify work being done and help sustain the process.
ENERGY EFFICIENCY AND CLIMATE CHANGE On the weighty topics of energy efficiency and climate change, the group identified several ways the industry could come together. One idea focused on collaborating on a climate change risk map. A number of companies have completed their own
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risk assessments, but could there be a space to share some of these learnings and data? And is there an opportunity to create a single space where Canadian product information such as life cycle analysis (LCA) data can be shared? Delphi Group consultant David Photiadis said much of the information currently available for companies to make decisions on is European or American based. “Right now, there are a lot of different activities going on,” he said. “It’s really about how not to duplicate efforts.”
PRODUCTS AND PACKAGING Reporting back on behalf of the products and packaging working group, Walmart Canada’s Andrew Telfer, manager of sustainability, said that with product sustainability there persists a nervousness around collaboration. “Product sustainability still is, in some cases, a competitive advantage. And rightly so, for all of the research and work and investment [company’s put into product development],” he said, pointing to Coca-Cola’s fully recyclable, PET packaging, which is comprised of 30% plant-based materials (instead of fossil fuels). Despite this trepidation, there is potential for collaboration. An example is Coca-Cola sharing its innovative PlantBottle technology with non-competitors like Heinz. Where packaging is concerned, the group noted it has a valid role to play in lessening food waste and, therefore, it’s unhelpful to reduce packaging so much that food waste actually increases. That said, the group agreed that whatever packaging consumers get, they should have the ability to recycle it and that’s where the opportunities for collaboration lie—in finding ways to make packaging not only more recyclable, but to also make it with more recycled content. Said Telfer: “Sustainability is a spectrum and as long as we’re lessening the footprint, we’re all moving in the right direction.” CG
PHOTO CREDIT
COMMUNITIES
SUSTAINABILITY 2015 DELIVERS BIG IMPACT! Kruger Products’ Sustainability 2015 initiative has seen very positive results. Look for our Sustainability 2020 targets to be announced soon as we continue our journey.
1
ENOUGH ENERGY
TO POWER
34K HOMES
OF RECYCLED FIBRE* DIVERTED FROM LANDFILL
WATER = SAVED*
1,900
OLYMPIC-SIZED
POOLS
FSC
®
TO BE
96,000 TRUCKS
CANADIAN
MANUFACTURER CERTIFIED
NAMED GTA
TOP EMPLOYER
5 CONSECUTIVE
YEARS RANKED
SAVED
ST
*°
#1
CONSUMER PACKAGED
PACKAGING LBS. *
SAVED = 160
767 AIRLINERS
EMISSIONS
SAVED*° 29M EQUAL TO PLANTING
TREES
ONE OF NORTH AMERICA’S
LARGEST PORTFOLIOS OF
CERTIFIED TISSUE PRODUCTS
GOODS SUPPLIER
IN FOR 4 STRAIGHT YEARS
krugerproducts.ca/sustainability
†
© 2016, ® Registered and ™ Trademark of Kruger Products L.P. † ECOLOGO® Certified products are certified to ECOLOGO® standards for reduced environmental impact. For more information, visit ul.com/el. ® Earth Day Canada used under license. ® Forest Stewardship Council and FSC Logo – Forest Stewardship Council, A.C.
*2010 through 2015 °Canadian Operations
LETTUCE SHOW YOU 10 FUTURE TRENDS TO WATCH We here at Canadian Grocer don’t claim to own any crystal balls— but we do have a few tools to help forecast this year’s trends BY DANNY KUCHARSKY AND CHRIS POWELL
CENTRE OF STORE - ALIVE AND KICKING It would appear that reports of the centre of store’s demise are greatly exaggerated. Far from languishing in the shadow of the flashier perimeter departments (the bakery, the deli, the produce, meat and seafood departments), the centre of store is more than holding its own. While the perimeter of the store has commanded the most attention over the past five years, thanks to strong sales, Nielsen says this growth has been largely driven by inflation. So while we may be spending more to eat fresh, consumption has actually been flat. Now that food prices have stabilized, things are looking up for centre store and food sales in these aisles are actually outpacing the perimeter. The takeaway: remember the role the whole store contributes to growth.
Now centre of store food is outperforming the perimeter
CENTRE STORE GROWTH PERIMETER
58.9
60 50
CENTRE OF STORE
55.9 44.1
41.1
CAGR
VYA
40
+4.1% +3.0%
30 20
+1.6% +3.4%
10 0 2011
2016 NIELSEN MARKETTRACK, 52 WEEKS TO AUG. 20, 2016
Consumers’ hectic lifestyles are contributing to the evolution of a pair of parallel trends, with consumers placing as much importance on the time needed to prepare a meal as they do on its nutritional value. Mintel’s Global New Products Database (GNPD) reports a 54% increase in food and drink products boasting “on-the-go” claims between 2010 and 2016, with the company predicting that time saved on preparing a food or drink product, will become a “clear selling point” in 2017. Mintel says the focus on time has led to growth in products that offer “shortcuts,” such as herb purees boasting extended shelf life, quick-cooking side dishes, and the continued evolution of home delivery services like InstaBuggy.
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“Many of these time-saving solutions allow consumers to bypass one portion of the meal-making process without sacrificing key elements such as nutrition or personalization,” says the study. Companies are also addressing increased consumer demand for products that tackle late-night cravings and help them calm down before bedtime. A U.S. company called NightFood—slogan: “Feed the cravemonster”—has developed a line of 140-calorie snack bars for what it calls “TV o’clock,” while Gatorade is reportedly developing an evening yogurt snack designed to help athletes recover while they sleep.
JOSIAH GORDON
TIME IS OF THE ESSENCE
TWEET
DON’T FORGET DOLLAR STORES!
NON-GROCERY
HABA
Food accounts for over half of dollar store CPG sales
FOOD
60 50
51.9
47.5
42.2
39.4
40 30 20 10
POST
FEWER TRIPS TO THE STORE
Remember the Montreal man who grabbed headlines in 2013 for feeding himself almost exclusively on a diet of staples purchased at a dollar store? While most shoppers are unlikely to follow his example and ditch the grocery store altogether, it’s worth noting that more than three-quarters of Canadians are already shopping in dollar stores. Although they capture only a small slice of today’s grocery market (1.5%), food sales are growing in this channel. As dollar stores add more food items to their shelves, Nielsen says trips to these stores will likely rise as they become a one-stop shopping solution.
DOLLAR STORE SALES
SHARE
10.4
8.7
2011
2016
0
As shopping trips continue to erode (Canadian shoppers have made 178 million fewer trips in the last five years), Nielsen suggests an omnichannel strategy will help retailers hold on to overall shopping occasions as more and more consumers, particularly millennials, avoid the in-store trip. But as omnichannel retailing grows in importance, grocers have to be on top of their game and able to serve customers the way they want to be served, whether it’s online shopping with delivery or pick up or with traditional bricks and mortar methods, says Winder. Having so many options creates complexity as all offers, inventories and the overall brand experience must be consistent. “It is far harder to maintain traditional profitability for grocers under this new approach as supply chain costs can be significantly higher and demand and inventory management unpredictable,” Winder says. “Although online shopping is still relatively low in grocery, I would suspect it will grow significantly.” David Wilkes, senior VP, government relations and grocery development at the Retail Council of Canada, says that he doesn’t see a large shift to online sales in the grocery industry. “I do believe that part of what people enjoy about shopping for their food is the experience,” he says. “I think you’re seeing more and more effort being put into the store as a destination.”
ANNUAL SHOPPING TRIPS PER HOUSEHOLD 200 HOMESCAN: DOLLAR STORES – 52 WEEKS TO JULY 2, 2016
THE RISE OF SMALLER PLAYERS 150
Tom Barlow, president of the Canadian Federation of Independent Grocers, says Canada continues to drop in global rankings for innovation. He attributes this to consolidation within the grocery industry. If a smaller or niche player has a new product and wants to get onto Loblaws or Sobeys’ shelves, it’s going to cost a lot of money to get that product listed, he says. As a result, much of the innovation that’s happening is with small- and medium-sized players, he says. “The smaller guys are saying, ‘you know what, I’m willing to take a risk and it might not be in Loblaws, but there’s a lot of other businesses out there and alternative channels where I can go.’” Smaller retailers are also looking to differentiate themselves from competitors, so they’re looking for new brands, he says. On the CPG side, Nielsen says there’s a disruption happening with as much as two to five times the annual sales growth coming from brands outside the top 20 manufacturers. And smaller brands are fuelling a number of trends such as health and wellness and ethnic foods. Bruce Winder, co-founder and partner at the Retail Advisors Network in Toronto, adds that consumers are gravitating to more local and healthy food products that they perceive to be more consistent with their lifestyles. “The world has changed, and suppliers who are more nimble and have less brand baggage can offer refreshing alternatives to traditional CPG firms. This poses both opportunities and challenges to grocers.”
100
193 GREATEST
186
147
BOOMERS GEN X (GENERATIONS)
116 MILLENNIALS
NIELSEN, HOMESCAN – NATIONAL ALL CHANNELS
CHEERS TO MORE DRINK SALES As the Ontario government loosens regulations around the sale of alcohol in supermarkets, grocery retailers are cashing in. Since beer has been offered for sale in Ontario grocery stores, it has racked up over $43-million in retail sales. With cider recently getting the green light, Nielsen expects alcohol sales to exceed $100-million annually. According to data from Ipsos Reid, merchandising beer along the snacking aisles could result in big sales. Its Alcohol Consumption Tracker report notes that 48% of respondents prefer drinking beer with food. A little over 17% of respondents pop a cold one with snacks like pretzels and nuts, while 7% enjoy beer with finger foods like nachos and wings. January / February 2017 Canadian Grocer
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TUESDAY MAY 9 to THURSDAY MAY 11
convention.cpma.ca
2017
CANADA’S LARGEST EVENT DEDICATED TO THE FRUIT AND VEGETABLE INDUSTRY
TORONTO 2017
HEALTH FOR EVERYONE
GLOBAL FLAVOURS FLOURISH
Mintel predicts an increased emphasis on providing access to affordable healthy food and drink, particularly as the risks and costs associated with an unhealthy diet—most notably obesity and diabetes—become more apparent. There is also a growing desire among consumers to eat better, with a recent Nielsen study finding that nearly half (46%) of Canadian consumers are eager to eat more all-natural products, and more than half (54%) are willing to pay more for foods that don’t contain undesirable ingredients. According to Mintel, however, some healthier products remain out of reach for lower-income households, even though they may strive to eat better. In Canada, 69% of households with an income of less than $25,000 agree with the statement “Being healthy gives me a sense of pride.” The study says that more innovations are needed to make it easier for low-income households to achieve healthier eating objectives. Some retailers have started addressing the trend. The U.K. chain Asda, for example, recently began selling a box of misshapen vegetables, capable of feeding a family of four, for £3.50 (about $5.80). Technology is also expected to play a key role in making healthier foods accessible. In the Netherlands, an app called Koken met Aanbiedingen (“Cooking with Offers”) helps customers prepare meals using ingredients that can be found on sale. Similarly, a crowd-sourced online map in Argentina called El Mapa Del Asado (The BBQ Map) provides the locations of retailers selling affordable meat.
It should come as no surprise that multicultural consumers are transforming Canada’s shopping scene. Propelled by an increase in population and expanding buying power, retailers and marketers need to learn how to connect with this diverse set of customers. By understanding what drives a multicultural consumer to buy, says Nielsen, marketers and advertisers can forge long-term relationships with the most dynamic and fastest-growing segment of the Canadian consumer economy. One insight Mintel provides is that foreign-born shoppers still show an active interest in experiencing dishes across cultures other than their own. They’re more likely to agree they like to experience other cultures through food (81% vs. 71% among those born in Canada), and agree they prefer to make ethnic foods from scratch.
ATTITUDES TOWARDS ETHNIC-INSPIRED FOODS I like to experience other cultures through food
71%
81%
BORN IN CANADA
NOT BORN IN CANADA
Food from a foreign brand are more authentic
38% BORN IN CANADA
45% NOT BORN IN CANADA
URBANIZATION OF CONSUMERS Clusters of consumers in urban centres is a trend that will have a significant impact on grocers and affect assortment, sales mix, space productivity, supply chain, format, staffing and store rentals, says Winder of the Retail Advisors Network. According to Nielsen, these urban consumers are younger and have higher incomes. They also have unique lifestyles and needs; for instance, they are less likely to own a car and want more portability than shoppers outside of the urban centres. The new urban format will challenge grocers with “the difficult task of running at least two different go-to-market strategies at the same time, which is hard for large companies to do well,” says Winder.
URBANIZATION EFFECTS ON SHOPPING Shopping trips per household
170 URBAN
164 SUBURBAN
163 RURAL
Basket Size
$47 URBAN
$53 SUBURBAN
$57 RURAL NIELSEN, HOMESCAN - NATIONAL ALL CHANNELS
LIGHTSPEED/GMI MINTEL
POWER TO THE PLANTS According to Mintel, consumers are increasingly prioritizing fruits, vegetables, nuts, seeds, grains and botanicals as they aspire to live healthier and cleaner lifestyles. This is leading more manufacturers to release formulations focusing on plants. According to Mintel’s Global New Products Database (GNPD), there has been a 25% increase in vegetarian claims—and a 257% increase in vegan claims—in global food and drink launches in the past six years. Several companies have introduced vegetable–based products to address growing consumer interest. Maple Ridge, B.C.based Hardbite chips, for example, currently offers several types of vegetable-based chips, including Eat Your Parsnips and 18 Carrot Gold. According to Mintel, the emphasis on plant products reinforces growing consumer interest—although many consumers are adopting so-called “lexitarian” lifestyles in which they choose vegetarian or vegan products for an occasional snack, drink or meal as opposed to a wholesale lifestyle change. Mintel predicts that technology will play a key role in the plant-based food trend, both in ensuring an ample supply of plants and in creating plant-enhanced products that also deliver on taste—an important aspect for the “lexitarian” audience. CG January / February 2017 Canadian Grocer
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Stroll more Aisles: 50 A yogurt revolution! 51 Steeping hot beverage sales 52 Chickpeas, please 53 Uncork wine sales
AISLES Products, store ops, customers, trends
Yogurt
LAYER ON THE FLAVOUR With flavours that range from berry to beet, could yogurt be the most versatile product in your store? By Rosalind Stefanac Photography by Erik Putz
WITH A FONDNESS FOR SNACKING AND A FOCUS on getting healthier, Canadians are turning to yogurt. Portable, natural and coupled with unconventional flavours, yogurt is inching its way up the list of mainstay grocery basket items, albeit at a more modest pace. Growth in the category may have slowed this past year, according to Nielsen’s latest numbers, but yogurt still holds its ground with an average 4% growth over the last five years (compared to 2% to 3% in the food industry overall). Nielsen’s VP of Consumer Insights Carman Allison says slower growth isn’t surprising given that Greek yogurt— which has seen a double-digit surge since launching—is becoming mainstream. “It’s still priced at a premium, but there’s more competition in Greek yogurt now and it’s no longer new,” he says. Allison says our penchant for yogurt, Greek and otherwise, is fuelled by a
50
January / February 2017 Canadian Grocer
AISLES consumer shift to cleaner eating. “Greek yogurt is perceived as healthy and it delivers by being high in protein and lower in fat while tasting great,” he says, noting a 2015 Nielsen global report on healthy eating trends that showed almost one-quarter (24%) of respondents saying they plan to buy more yogurt. “It’s about going back to basics. Even in [traditional] yogurt, lite and diet is trending down as people seek a more natural option.” But with traditional yogurt still making up 84% of consumption, Allison says price, flavour and format are key factors. “Drinkable yogurts are up 8% and we’re noticing a trend towards consumers buying yogurt in bulk to save costs,” he says. While plain yogurt still dominates (14%), followed by strawberry (9%), Allison believes there’s lots of opportunity for unique flavour combinations because consumers get bored eating the same yogurt day after day. To meet expectations, manufacturers like Astro are coming out with an array of flavours, including Greek yogurt with chocolate chunks or ancient grains. Savoury and non-dairy options are also gaining momentum. U.S.-based Blue Hill yogurt boasts unconventional flavours such as beet, butternut squash, parsnip and tomato. “We have such a diversity of backgrounds in Canada that it makes us open to a diversity of flavours and formats,” says Simon Small, VP of Marketing at Ultima Foods, makers of the iogo Nano yogurts for kids. Nano yogurts come in drinkable, cup, pouch and tube formats, and last fall the brand launched a series of vegetable/ fruit combinations including banana and squash, blueberry and beet, and peach and carrot. “Parents of young kids think that ingredient deck is fantastic and it tastes yummy too,” says Small. For the more mature set looking for flavour and nutrition, Jumpstarter from B.C.-based JillyV’s Food Products offers an organic yogurt rife with chia, oats and locally made sugar-fruit compotes that packs 10 grams of protein in under 300 calories. Founder Jillian Hull first made the concoction at home because she couldn’t find a yogurt that was healthy and satisfying enough to get her through the morning. Jumpstarter is geared to millennial women, but Hull says she is hearing from longhaul truckers who are eating it too. The company also plans to launch a half-size version with a snap-able spoon aimed at kids. “It has been fun to watch this market emerge and as consumers tell us what they want we can respond accordingly,” she says.
Beverages
Hot stuff, coming through: the state of hot drink sales WHEN YOU THINK OF HOT DRINKS, coffee may be the irst thing that comes to mind. After all, according to the Coffee Association of Canada, java accounts for $1.4-billion in grocery sales. It’s among a few other beverages that can warm up sales.
Hot beverage sales in Canada 52 weeks to Sept. 16, 2016 COFFEE - ROAST & GROUND COFFEE - EXTRA FINE GRIND
Latest 52 Weeks
52 Weeks year ago
$ (000’s)
$ Vol Unit Units Vol % Chg (000’s) % Chg 1 4 124,421.7 1,297,788.5 4 6 1,328.4 11,785.1
$ (000’s)
Unit (000’s)
1,242,696.2 123,453.3 11,141.9
1,271.5
99,100.6
8,527.4
COFFEE - FINE GRIND
104,597.5
6
8,903.9
4
COFFEE - OTHER COFFEE GRIND GROUPS
313,270.7
0
34,829.4
-1
312,468.3 35,309.3
COFFEE - REGULAR / ALL PURPOSE GRIND
738,953.2
5
69,146.3
0
702,256.7 68,968.9
1 COFFEE - WHOLE BEAN
129,182.0
10
10,213.8
9
117,728.6
COFFEE -INSTANT
159,917.4
5
33,795.3
4
152,927.8 32,472.4
9,376.1
INSTANT - CONTAINER - CAN
14,036.7
1
1,375.2
-2
13,925.3
1,402.3
2 INSTANT - CONTAINER - CARTON
12,204.4
32
1,951.1
33
9,255.8
1,466.2
INSTANT - CONTAINER - ENVELOPE
2,187.4
-12
737.5
-29
2,498.8
1,033.0
INSTANT - CONTAINER - JAR
115,866.4
5
27,565.2
5
INSTANT - CONTAINER - OTHER TYPES
15,622.6
-7
2,166.3
-10
16,737.8
2,411.4
INSTANT - FLAVOUR - FLAVOURED
19,517.0
3
3,900.0
4
19,029.0
3,737.9
INSTANT - FLAVOUR - UNFLAVOURED
140,400.3
5
29,895.3
4
133,898.8 28,734.5 141,730.2 30,084.8
110,510.1 26,159.4
INSTANT - HEALTH CLAIM - CAFFEINATED
148,801.7
5
31,417.4
4
INSTANT - HEALTH CLAIM - DECAFFEINATED
11,115.6
-1
2,377.8
-0
11,197.6
2,387.5
INSTANT – CAPPUCCINO
7,088.8
-2
1,476.3
2
7,268.4
1,450.9
INSTANT - EXPRESSO
4,150.7
14
805.1
16
3,634.4
693.4
INSTANT - OTHER TYPES OF COFFEE
148,677.9
5
31,513.9
4
COFFEE SUBSTITUTES
1,724.1
-6
283.0
-11
1,840.0
318.8
COFFEE WHITENERS
28,185.3
1
5,248.8
-1
27,894.0
5,277.8
57,239.7 10,237.7
142,025.0 30,328.0
3 HOT CHOCOLATE
54,271.9
-5
9,695.7
-5
FLAV. DRINK POWDER - ASPARTAME BASED
2,290.0
-11
516.8
-17
2,573.5
624.2
FLAV. DRINK POWDER - SUGAR BASED
51,981.9
-5
9,178.9
-5
54,666.2
9,613.6
HOT INSTANT TEA
2,531.3
8
376.3
5
2,349.3
359.1
TEA
232,916.4
1
49,136.2
-4
230,581.7 51,037.0
TEA - CAFFEINE PRESENCE - CAFFEINATED
164,775.2
0
31,315.4
-5
164,378.3 32,920.9
TEA - CAFFEINE PRESENCE - DECAFFEINATED
68,141.1
3
17,820.8
-2
66,203.4 18,116.2
TEA - FLAV. EARL GREY INCL. GRN. EARL GREY
16,644.9
3
3,025.4
-2
16,211.4
3,092.1
TEA - FLAV. - ENGLISH BREAKFAST
5,635.9
-3
872.5
-6
5,805.1
929.1
TEA - FLAV. - ORANGE PEKOE
77,403.9
2
13,740.8
-6
76,046.8 14,607.3 132,518.4 32,408.5
TEA - OTHER FLAVOURS TEA BAGS
133,231.6
1
31,497.5
-3
TEA - TYPE OF PRODUCT - LOOSE TEA
5,942.9
18
771.2
12
TEA - TYPE OF PRODUCT - REGULAR TEA
80,040.3
1
14,223.8
-6
79,311.8 15,204.1
TEA - TYPE OF PRODUCT - SPECIALTY TEA
146,933.2
0
34,141.2
-3
146,219.1 35,142.6
4
1. Coffee is holding its own. Sales in the category remain positive, particularly whole beans, where unit sales are up 9%; dollars 10%.
2. Shoppers are known to judge a product by its packaging. Unit sales for instant coffee in cartons are up 33%; dollars 32%.
3. Hot chocolate is getting a cool reception from Canadians, especially when it cotains aspartame. Unit sales are down 5%.
5,050.7
690.3
4. Chock it up to the popularity of companies like David’s Tea and Teavana? Unit sales for loose tea are up 12%.
NIELSEN: NATIONAL, ALL CHANNELS, ALL SALES (EXCEPT N.L.)
January / February 2017 Canadian Grocer
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AISLES Pulses
Chickpea champions These chic-peas are main ingredients by Lisa Bucher // Photography by Erik Putz
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January / February 2017 Canadian Grocer
AISLES Alcohol “Any opportunity to get our brand in the hands of consumers in our domestic market is a win for the winery,” says Pillitteri sales manager Courtney Dobias. Jeff Doucette, general manager of Toronto research firm Field Agent Canada, says the addition of wine to grocery shelves presents both a challenge and an opportunity. “It’s a much more complex category than beer, but it also opens up a lot of really interesting opportunities for total communication around a meal or wine pairings,” he says. Here are some simple tactics retailers can use to uncork better wine sales:
MATCH YOUR PRODUCTS WITH YOUR CUSTOMER
GRAPE EXPECTATIONS How to sell vino in the grocery store By Chris Powell
LOBLAW COS. LTD.
FIRST CAME SUDS, NOW COMES MERITAGE. LAST OCTOBER A LITTLE less than a year after stores were given permission to sell beer, the Ontario government granted 70 grocery stores a license to sell wine. If beer sales are any indication, shoppers and retailers alike will be happy with the change. Ontario grocers received about 532,000 cases of beer from the LCBO between December 2015 and early August 2016, with net sales of around $24 million, according to government figures. Just like their craft beer counterparts, many wineries, such as Niagara-on-the-Lake, Ont.-based Pillitteri Estates Winery, are keen to get their products on grocery shelves. Pillitteri has already introduced the Harvest Collection—a line of six wines available exclusively at grocery.
Grocers granted licenses to sell wine range from discount chains like Food Basics to more upscale operations such as Longo’s and Loblaws—each of which attracts a different clientele. “Those are two different types of shoppers,” says Doucette. “When I’m in a Farm Boy store I’m looking for something completely different from what I’m looking for in a No Frills. They need to be smart with their products.” While a discount chain would likely find greater success with fast-moving brands such as Wolf Blass, Doucette says upscale chains would likely attract buyers for pricier wines.
MAKE THE IN-STORE EXPERIENCE ATTRACTIVE Doucette says grocers should strive to offer an in-store experience which mimics that of the LCBO. “Playing in that higher-end space as a food retailer, you’re going to have to emulate what people have come to expect when they go into an LCBO store. It’s almost a luxury experience.”
ONCE UPON A WINE… Doucette says wine’s rich history lends itself to storytelling, whether it’s about the history of the grape or how a particular wine can enhance a meal. A chain like Loblaws, for example, could offer a weekly “Galen’s Pick” accompanied by a story about why it was selected. “It could be a simple story like, ‘I love this wine and I serve it a lot when we’re serving pasta,’” says Doucette. “It’s simple, but it’s the added touch that grocers can bring.” CG
NEW ON SHELF! DON’T BELIEVE THE HYPE? LET US HELP YOU DECIDE IF THESE PRODUCTS ARE RIGHT FOR YOUR STORE
Almondmilk pudding
Double fruit jam
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LAKEVIEW FARMS’ Almondmilk Pudding comes in three flavours: chocolate, vanilla and dulche de leche. It’s a great snack option for shoppers with a lactose sensitivity or who are simply looking for a new dessert with a unique flavour profile.
SMUCKER’S Double Fruit jam packs twice the fruit in half the calories. These spreads are available in 390 mL jars, and come in four varieties: strawberry, raspberry, apricot and blueberry. We can totally eat a cup of this instead of a piece of fruit, right? January / February 2017 Canadian Grocer
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BOTTLE NECK N’ NECK A misstep by Heinz may have laid the groundwork for French’s to become Canada’s condiment upstart, but there are still battles to be fought in the ketchup wars SO YOU THINK CANADA’S KETCHUP WARS are over? Not likely. The upstart French’s ketchup has made great strides in market share since Heinz closed its ketchup plant in Leamington, Ont., and moved production to the U.S. French’s, on the other hand, began making its ketchup using Canadian tomatoes from that same Leamington plant. French’s success is a matter of Canadian pride and loyalty, with a little bit of vengeance thrown in. Heinz was criticized for its move from Leamington. Interestingly, French’s ketchup is bottled in the U.S., but using Canadian tomatoes—it even says so on the label. The Heinz bottle’s neck label used to say “Proudly Prepared In Canada”, but that’s been discontinued. French’s upped the ante, striking a deal with Select Food Products of North York, Ont., to bottle French’s ketchup. It will still use the Leamington plant, now oper-
54
ated by Highbury Canco Corp., to produce the paste from Leamington tomatoes. The ketchup wars went public earlier this year when an Orillia man’s Facebook post lamented the loss of Leamington’s Heinz plant. He was shocked that the company could stop using Canadian ingredients. The next day, he picked up French’s ketchup—made from tomatoes grown in Leamington and processed in the same plant Heinz once operated. His post hit a nerve with Canadians, and cries went out to boycott Heinz. Denunciations of Heinz in the Ontario legislature followed, as did threats to boycott Loblaw, which delisted French’s ketchup because they said it was harming sales of President’s Choice ketchup. The University of Windsor switched over to French’s, as did fast food chain A&W. The outcry and the change of heart were
January / February 2017 Canadian Grocer
STRIDES WERE TAKEN IN THE KETCHUP WARS THIS YEAR, BUT THE BATTLE ISN’T OVER YET. THE RACE WILL CONTINUE INTO 2017
George Condon is Canadian Grocer’s consulting editor. He’s based in Toronto. condug@sympatico.ca
immediate. French’s was back on Loblaw shelves, and Heinz filled stores with large displays of ketchup, often at promotional prices. According to news reports, Heinz made for a good villain. In 2013, it was bought by Warren Buffett’s Berkshire Hathaway fund and Brazilian private equity group 3G Capital Management. True to form, the new owners began cutting costs and closing plants across North America. But the Leamington plant quickly found a buyer in Highbury Canco. And while Heinz now manufactures its ketchup in the U.S., the company has contracts with the Leamington factory to make Heinz tomato juice, pasta sauce and other products. French’s and Heinz aren’t the only players in the ketchup wars. In April, Primo launched what it called an all-Canadian ketchup. The tomatoes are sourced from Leamington, and the ketchup is made at a plant in Ontario. For now, French’s is enjoying a high. It may make ketchup with Leamington tomatoes, but the condiment itself isn’t manufactured at the plant—that is, until Select Food begins to bottle it in early 2017. It’s not clear whether ketchup giant Heinz lost much market share, but Brooke Gilliford, country manager for The French’s Food Company, says the push its ketchup received in the first few months has been sustained. She says that from nowhere to 9% national market share and levels of over 25% in some Ontario retailers is rewarding. She also notes not everyone is yet aware that for every bottle of French’s Ketchup sold the company donates one meal to Canada’s food banks. That will be over 1.5 million meals this year. Sure Heinz is No. 1, but if the Canadian support continues maybe French’s Ketchup will someday have a neck label that reads: “Proudly Made in Canada.” CG
PABLO IGLESIAS
George Condon
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