STORE OF THE MONTH: MONTREAL’S PROVIGO LE MARCHÉ L’AVENUE P.8 GRAND PRIX WINNERS P.23 THE THREAT OF LIDL AND ALDI P.28
Meet our 16 Star Women in Grocery Award winners P.33
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Clockwise from top left: Naniss Gadel-Rab, Unilever Canada Mary Dalimonte, Sobeys Cara Keating, PepsiCo Foods Canada Shannon Skinner, Metro Ontario Michelle Scott, The Grocery Foundation
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CONTENTS July/August 2017 Volume 131 Number 5 FEATURES
AND THE WINNERS ARE... 23 Check out the winners of the 2016 Grand Prix New Product Awards
CHARTING A COURSE 26 Michael Graydon, CEO of Food and Consumer Products of Canada, on navigating today’s grocery industry
7 20 21 22 50
Front Desk Indie View Food Bytes Shopper Sense Checking Out
STORE OF THE MONTH
8 Provigo Le Marché L’Avenue A small downtown Montreal grocery store making a big impact
12 Colleen Dyck
This entrepreneur’s energy bars prove that great taste and quality ingredients are worth every penny
14 The Buzz IDEAS
15 How to engage your employees
Invested, happy employees are a boon for your bottom line
17 Millennial myths
The truth about the “Me Me Me” generation might surprise you
18 Celebrating Canada’s 150th birthday How three big retailers are marking the occasion
45 Shakeup in the snack aisle
Consumers are reaching for nutritious portable snacks
COVER IMAGE: JENNIFER ROBERTS; THIS PAGE: SANDI FALCONER
47 It’s all in the label
THE WAITING GAME
Non-dairy alternative “milks” are stirring up controversy
28 Are hard discounters Lidl and Aldi on their way to Canada?
48 The state of cold beverage sales
Here’s how grocers can fend off an attack
STAR WOMEN AWARDS 33 Introducing Canadian Grocer’s Star Women for 2017!
FOLLOW US ON @CanadianGrocer Canadian Grocer Magazine @CanadianGrocerMagazine
July/August 2017 Canadian Grocer
Congratulations to the 2017 STAR WOMEN in Grocery Award recipients
Kraft Heinz is a proud sponsor of the annual Star Women in Grocery Awards
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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
MAIL PREFERENCES: From time to time other organizations may ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2017 by Stagnito Partners Canada Inc., may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. Canadian Grocer, its affiliates and assignees may use, reproduce, publish, republish, distribute, store and archive such submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. ISSN# 0008-3704 PM 42940023 Canadian Grocer is Published by Stagnito Partners Canada Inc., 2300 Yonge Street, Ste. 1510, Toronto, Ontario, M4P 1E4.
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We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
WONDER WOMEN Now in its sixth year, the Star Women in Grocery Awards are more relevant than ever WHEN I FIRST STARTED WORKING at Canadian Grocer, almost 15 years ago, the Star Women in Grocery Awards didn’t exist. While there were plenty of accomplished women working in the grocery industry then, there was no real forum to shine a light on their achievements. So, in 2012, we created the Star Women Awards to right that wrong. Since those inaugural awards, we’ve named 92 Star Women, including the 16 that you’ll meet in this issue. I’m sure you’ll agree that this year’s recipients are an impressive bunch. Take, for instance, Cathy Weiss, a Save-On-Foods store manager in northern Alberta. After the 2016 Fort McMurray wildfire tore through her hometown, Cathy went above and beyond, not only looking after her staff but also the larger community, helping distribute food to people in need.
WE CREATED THE STAR WOMEN AWARDS IN 2012 TO SHINE A LIGHT ON WOMENS’ ACHIEVEMENTS IN GROCERY Barbara Ann O’Brien, a longtime employee of Dieppe, N.B.-based Bonté Foods, was instrumental in transforming the struggling meat company into the brilliant success story it is today. Then there’s Sarah Davis, who has ascended the ranks to become the first woman president at Loblaw, the largest grocer in Canada. (Read all of our 2017 winners’ stories starting on page 33.) We’re heartened that support for the Star Women Awards keeps growing. This year, we had a record number of nominations, making the
task of selecting the winners a challenging one. But we’re not complaining: having a generous stack of nominations confirms what we already know to be true— there are loads of exceptional women working in grocery. Of course, there’s still work to do to increase opportunities for women in the industry. We need to ensure strategies are in place to attract talent, close gender pay gaps and knock down barriers for women interested in leadership roles. Loblaw, Walmart and others have established programs that support women as they rise within their organizations. Here’s to seeing more of these initiatives in the industry. Congratulations to our 2017 Star Women!
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July/August 2017 Canadian Grocer
Location Downtown Montreal Number of Employees 100 Size 24,000 sq. ft. Specialties Lâ€™Avenue des Canadiens hot dog
July/August 2017 Canadian Grocer
STORE OF THE MONTH
Location Location Location Business is brisk at Provigo Le Marché L’Avenue in downtown Montreal, proving that bigger isn’t always better at the grocery store
By Danny Kucharsky Photography by Chantale Lecours
July/August 2017 Canadian Grocer
ONE OF THE FIRST THINGS SHOPPERS SEE when taking the escalator up to the entrance of Provigo Le Marché L’Avenue is a framed Habs jersey with the number 17 and “Provigo” on the back. It’s no wonder: not only is the new store just across from the Bell Centre, the downtown Montreal home of the Montreal Canadiens, but Provigo (owned by Loblaw since 1998) is one of the team’s sponsors. The store is on the second floor of the new 350-unit L’Avenue condo tower, in a neighbourhood bursting with construction cranes and half-built condo buildings. “Everything’s under construction here,” says Provigo’s group director Sylvain Jodoin, who is responsible for both Provigo Le Marchés and corporate stores. “That means there are going to be a lot of new residents. Sales will continue to go up—that’s the opportunity.” Soon after entering the store, shoppers are greeted by a whimsical 18-by-30-foot mural that showcases the best of Montreal. You’ll find depictions of a hockey rink, Notre-Dame Basilica, the Stanley Cup and a Montreal bagel, of course. Quebec products are also featured throughout the store, including Biodélices maple syrup and Dion spices. While the average Provigo Le Marché is 45,000 square feet, L’Avenue is condo-sized, measuring about half of that. Like all stores in the banner, however, you’ll find the same wall of cheese and displays of aged beef—just slightly smaller versions. Despite the petite footprint, Jodoin says the store has a substantial offering of 15,000 products, including more than 450 types of cheese (with 300 hailing from Quebec) and more than 20 varieties of mushrooms. In keeping with the diminutive dimensions, the shopping carts are also smaller and shelves have one or two facings instead of the three, four or five seen in larger stores. Extra products are put on the top shelves to help employees restock quickly. Jodoin says organic foods and in-store prepared meals are great sellers at the downtown location. A variety of prepared meals, or concocté par nos chefs, sell for $7.99 and the salad bar, including higher-end items like quinoa and tabouleh, is becoming more popular every day. Since the store opened in April, Jodoin says business at Provigo has improved every week and sales have surpassed targets. On average, customers may purchase less per visit but there are more transactions from clientele composed of downtown workers, residents, students and tourists. “At lunchtime, it’s full,” he says. To add to that, the Bell Centre is the second busiest arena in North America. Many of the people who attend hockey games, concerts or other arena events end up dropping by the store. Keeping the Bell Centre’s calendar of events close at hand, this Le Marché closes at midnight for its customers—the latest closing of any Provigo. Jodoin says converting former Loblaw stores in Quebec to the Provigo Le Marché banner, including the new L’Avenue location, has resulted in better performance for Loblaw, the ability to consolidate multiple flyers into one provincial flyer and the opportunity to introduce hundreds of new products. “We’re extremely happy with the results in Quebec.” CG
July/August 2017 Canadian Grocer
STORE OF THE MONTH
SYLVAIN JODOIN, GROUP DIRECTOR AT PROVIGO, ON HIGH-TECH PROMOTIONS AND BEING A NATIONAL GROCERY RETAILER WITH A QUEBEC SENSIBILITY. HOW DID YOU PROMOTE THE NEW STORE? We used geo-targeting. People are always walking with a phone in their hand. Everyone on Facebook within a 1.5-kilometre radius of Provigo Le Marché L’Avenue received a message inviting them to see the store. Social media is becoming more and more popular and we wanted to use it.
URBAN GROCERY Provigo Le Marché L’Avenue is the first Le Marché in downtown Montreal
WHAT ARE YOUR FAVOURITE IN-STORE ITEMS? I have a weakness for fruits and vegetables and the organic produce section; I also like the prepared meals zone with the salads and lunchtime foods. In the deli section, we’re launching ham that’s cooked in store, so we’ll be able to provide customers with even fresher product. RECENTLY, WHEN MORE POWER WAS GIVEN TO PROVIGO’S QUEBEC MANAGEMENT, SALES IMPROVED. WHAT’S YOUR VIEW? I’ve been working for Provigo for 31 years; I’ve never seen as strong a connection between Quebec and Ontario. The guys in Toronto are our colleagues; if we need a product in Quebec, we make the decision in Quebec—it’s no more complicated than that. If there’s an opportunity to do business, I’ll bring in any Quebec supplier. We’re a national company but we’re a Quebec company within a national company. July/August 2017 Canadian Grocer
PEOPLE Who you need to know
The Facts Who Colleen Dyck Position Founder and president of The Great Gorp Project What’s New? The July product launch of Gorp’s Protein Bar Ready Mix
POWERING UP Colleen Dyck fuels her energy bar company, The Great Gorp Project, with a passion for high-quality ingredients By Day Helesic Photography by Thomas Fricke
“HOW HARD COULD IT BE TO CREATE an energy bar and sell it commercially?” That’s what Colleen Dyck, founder and president of The Great Gorp Project, asked herself more than a decade ago. Plenty hard, it turned out, but she’d be the first to say the rewards have been worth the effort. In 2005, Dyck was training for a triathlon. She couldn’t find an energy bar to her liking on the market so she created her own ultra-nutritious, all-natural recipe. Her training friends loved them and requests to make more kept coming. Dyck thought she might have an idea worth developing. After years spent researching and refining the recipe at the Canadian Government Food Development Centre in Portage la Prairie, Man., Dyck launched Gorp Clean Energy Bars (GORP is a ’60s acronym for Good Old Raisins and Peanuts) in 2013. Breaking into the Canadian retail food market has been a hard-fought battle. “Entering the prepared food category is extremely involved,” says Dyck. “And the energy bar category is ferociously competitive.” But she persevered, first selling her bars in Winnipeg health food stores, then landing a national account at outdoor recreation store Mountain Equipment Co-op. Grocery soon followed with retailers under the Federated Co-op and North West Company umbrellas and Overwaitea Foods coming on board. Gorp bars are now sold in 600 supermarkets, health food stores, gyms, outdoor stores and gas stations across Canada. Friends in high places have helped get the word out, too: both the Winnipeg Jets and the Toronto Maple Leafs use Gorp bars to get through practices and games. Despite having superstar customers, the manufacturing operation remains modest. Dyck and her husband, Grant, own a large grain and oilseeds farm near Niverville, Man. Gorp bars are made at the farmhouse, where they also raise their four children. Around 4,500 bars are manufactured per production day in the 1,600-sq.-ft. provincially inspected basement facility. But with five full-time
30 SECONDS WITH:
COLLEEN DYCK HOW DO YOU BALANCE MANAGING A FAMILY, A FARM AND THE GREAT GORP PROJECT? I haven’t always done it well. I’ve slowly realized that the biggest source of stress in my life is when I don’t prioritize properly. I used to think that the more time I pour into my business is what would get me to the next place. But my family relationships suffered and made everything else exponentially stressful. When I pour myself into my family and my kids instead, and they get the best version of me first, my level of anxiety about my business actually goes way down.
DO YOUR KIDS EAT GORP CLEAN ENERGY BARS? I have to limit them. When my youngest was three, he was downing two Gorp bars a day. I said, “Buddy, there’s a lot of fibre in those; you shouldn’t be eating that many!” I’m surprised the kids aren’t sick of them yet—they eat them every day.
WHAT’S THE BEST BUSINESS ADVICE YOU’VE EVER RECEIVED? My product wasn’t even on the market yet and my dad said, “Colleen, when you get this thing going, any time there’s something you can’t solve or you run into an issue, look in the mirror—the problem is going to be staring you in the face. Don’t forget, the fish stinks from the head down.” He meant be careful when you’re pointing fingers or blaming because if something’s not working, most of the time it’s your fault. As much as that’s hard to accept, it’s empowering: you know can fix it— you just have to find the way.
WHAT’S THE MESSAGE YOU’D GIVE TO TODAY’S YOUNG ENTREPRENEURS? Don’t wait to become confident before you act. Through action, you grow your courage.
employees and up to 20 casual workers, The Great Gorp Project plans to move into a new facility next year. Lauded for being tasty, filling and nutritious, the bars also have an unusual ingredient: sprouted brown rice protein. Dyck says it doesn’t cause bloating, or have the metallic aftertaste you sometimes get with whey- or soy-based bars. “Not a lot of bar manufacturers use it because it’s quite expensive. It’s a really clean taste and people appreciate that.” But because of the bar’s high-quality ingredients, it’s a challenge to fight the price war at retail. One bar retails for $3.25 and that’s not going to change anytime soon. “There are a lot of bars that cost 10 cents to make in raw ingredients,” says Dyck. “Our bar costs substantially more than that. I can’t offer the same sales to retailers that other bar manufacturers can.” In July, Dyck is launching a new product designed to address the price challenge. Gorp Protein Bar Ready Mix includes all the pre-measured dry ingredients for the Gorp bar in a onekilogram bag. Add your own honey and nut butter, roll it out, cool and then cut into bars. “You get 25 bars for under a buck a bar,” says Dyck. She has a lot riding on the launch: if Ready Mix takes off, she’s hoping the company will reach $1 million in revenues this year. Expansion into the U.S. market is the next push. In February, Dyck travelled to Los Angeles to showcase Gorp at the Oscars Celebrity Luxury Gifting Suite. There was only one problem— the product was a no-show. Two separate shipments had been held up at the border. In a heroic effort, Dyck and her team finally got through to a shipper who delivered the bars moments before the doors opened. Good thing: being at the Oscars resulted in more exposure for the company and more customers. “You never know where your venture is going to go,” says Dyck. “Now, when I look at the doors that have opened for us, I understand that you have to stick to your guns and just keep going.” CG July/August 2017 Canadian Grocer
THE BUZZ The latest news in the grocery biz
Shikatani Lacroix’s award-winning redesign of Calgary Co-op.
AWARDS CPMA’s Best New Product Award went to Mann Packing Co.’s Nourish Bowls, a single-serve warm meal with fresh veggies, grains and sauce that’s ready to eat in three to four minutes.
Shaun McKenna was named the new executive director of The Grocery Foundation. Former executive director Michelle Scott is retiring this fall. Thomas Shurrie was appointed senior vicepresident and chief operating officer of The Canadian Federation of Independent Grocers. George Weston Ltd. announced the appointment of Richard Dufresne to president. Dufresne is currently CFO at both George Weston Ltd. and Loblaw. Over the coming months, he will transition out of the CFO role at Loblaw. Darren Myers will join Loblaw Sept. 1 as executive vicepresident, finance. Myers will be appointed CFO at Loblaw Jan. 1, 2018.
July/August 2017 Canadian Grocer
Canada’s Quinta Quinoa won International Startup of the Year at the VitaFoods Europe Conference in May. The Ontario-grown quinoa has almost twice the protein and four times the mineral levels of standard quinoa and has been recognized as an innovative product by several other organizations including SIAL and the Ontario Farm Fresh Marketing Association.
DEALS Retail giant Amazon is pushing deeper into grocery, announcing it will acquire Whole Foods Market for US$13.7 billion. John Mackey, the natural food retailer’s co-founder, will continue to run the business.
OPENINGS H a r v e s t Wa g o n u n v e i l e d i t s n e w l y expanded store in Toronto’s Rosedale neighbourhood this June. The three-generation, family-owned store has grown from 2,200 to 5,000 square feet.
COMING SOON Farm Boy has announced it will open a fresh food market in Etobicoke, Ont. this fall, marking its 24th location in Ontario. Plans are also underway for more stores throughout the province and beyond.
CELEBRATING Parmalat Canada is celebrating the 70-year anniversary of its Lactantia brand of dairy products. Lactantia was established in 1947 and acquired by Parmalat Canada in 1997. The product line includes milk, butter, cream, cream cheese, margarine, spreads and milkshakes.
SHIKATANI LACROIX; CPMA; QUINTA QUINOA
COMINGS AND GOINGS
GOLDEN PENCIL AWARD The Food Industry Association has announced that Shelley Martin, Nestlé Canada CEO, Diane Brisebois, Retail Council of Canada president and Darrell Jones, president of Overwaitea Food Group, will receive this year’s Golden Pencil Award.
The redesign of Calgary Co-op was inducted into the Retail Design Institute’s “Class of 2016” this May at the 46th Annual Awards Gala & Fundraiser in New York City. Design firm Shikatani Lacroix redesigned Calgary Co-op grocery stores, transforming them into contemporary supermarkets that offer an immersive and playful shopping experience.
More Ideas on page: 16 Healthy Happy Home survey results 17 Debunking millennial myths 17 Highlights from CPMA 18 Grocers celebrate Canada 150
Retailers, suppliers, shoppers, insights
HOW TO ENGAGE YOUR EMPLOYEES Money may be a big motivator, but it can’t buy a happy workforce
By Rebecca Harris
EMPLOYEE ENGAGEMENT is a hot topic, but it isn’t one of those “fluffy human resource terms,” says Eddie LeMoine, a Calgary-based author and expert on employee engagement. “It has very positive results in productivity, cost containment and profitability.” A 2014 study by Queens University and Aon Hewitt found that organizations with the most engaged employees achieve 65% greater share-price increase, 26% less employee turnover, 20% less absenteeism, 15% greater employee productivity and up to 30% greater customer satisfaction levels. While definitions of employee engagement vary, for LeMoine it’s about inclusion and co-creation, and everyone working together on a common goal. “You’re trying to leverage the individual strengths of the employees and align them with the goals of the organization,” he says. Practically speaking, that means employers must have conversations with individual employees, identify what they’d like to do in the organization, July/August 2017 Canadian Grocer
and see where that can dovetail with company goals. “That’s when the magic happens,” says LeMoine. “That’s when employees become more productive, work harder and recommend their company as a place to do business.” For Newfoundland grocery chain Colemans, an important employee engagement tool is its “People of Potential” program, which identifies staff members who might be considering a career in the grocery industry. A cashier, for example, may want to receive training to work in a department. “If we see a person of potential, we may ask if they’re interested in becoming a meat cutter or a baker,” says Janet Joyce, director of human resources at Coleman Group of Companies. Employees who are selected to move up are then placed on a “trade” pay scale for training. Joyce says the scale has quick increases, which shows employees the opportunities that are available with the acquisition of specialized skills. “It could be the difference between topping out at $12.50 per hour and topping out at $17.50,” she says. “It’s aggressive and they can see they’re making their way along to a career. It’s worked really well for us.” Eddy Ng, professor and F.C. Manning chair in economics and business at Dalhousie University’s Rowe School of Business, says it’s critical to provide staff with a sense of purpose or meaning. “It’s not so much about the pay—that is very external,” he says. “It’s about intrinsic motivation—something you draw from within yourself. You feel that your job is part of something bigger and you see how your job fits into the big picture.” In a grocery environment, that could mean bakers knowing what percentage of store sales their products contribute to, or knowing that their breads have a reputation for being the best in town. A produce manager could also have influence over where and how their foods are sourced to meet increasing consumer appetite for
HONING IN ON HEALTH CANADIANS AREN’T JUST THINKING ABOUT THEIR HEALTH—THEY’RE TAKING STEPS TO IMPROVE IT
July/August 2017 Canadian Grocer
locally and sustainably grown produce. “They want to see that what they do is meaningful and has an impact,” says Ng. Rewards and recognition also go a long way toward boosting engagement. Colemans has a program called Culture Club, whereby store employees start off with a black name tag, and can move up to bronze, silver, gold, platinum and platinum plus if they contribute positively to the store’s culture. If an employee receives a glowing customer testimonial, scores 100% on a mystery shop, or has an innovative idea, they rise to the next level and their name tag will change colour. Each time an employee moves up, they receive a letter acknowledging their contribution and a $25 gift card. While everyone likes to be recognized, retailers also need to tailor engagement strategies to the different age demographics in their workforce. Today, store employees run the gamut from gen-Zers all the way to seniors. “You can’t use the same motivator for everyone and assume it’s going to work,” says Bruce Winder, co-founder and partner of Retail Advisors Network. “If you’re a baby boomer or a genXer you might be motivated by money, but also by empowerment, title and responsibility.” For younger workers, particularly students, flexible time or an education allowance might be more of an incentive. When it comes to recruitment strategies, generational differences should also be kept in mind. To attract younger workers, grocers need to shake the perception that working in a supermarket is just a job and not a career, says Ng. “They have to move away from saying, ‘We’re offering you a job at a grocery store’ to ‘We’re offering you a career as a professional baker or professional butcher,’” he says. “By making it more professional, it will appeal to millennials in the sense that they’re doing something interesting. They want to see their work as being meaningful as opposed to one that pays well.”
Quality and health are important to consumers New Nielsen research reveals that more than two-thirds of Canadians are making a conscious effort to improve their health. How does food play into their pursuit of this goal? Here are some highlights from the Healthy Happy Home survey:
of survey respondents said they prefer to cook at home to know what’s in their food
said quality is more important than price when it comes to food
WHAT YOU MISSED AT CPMA
Millennial myths THINK YOU HAVE A HANDLE ON MILLENNIALS? NEW RESEARCH MAY CHALLENGE WHAT YOU THINK YOU KNOW By Shellee Fitzgerald
GETTY IMAGES; FRESHII
THERE’S NO SHORTAGE OF ADJECTIVES to describe millennials: tech savvy, adventurous, entitled or, as Time magazine described them on its cover a few years back, “The Me Me Me Generation.” But is it fair or accurate to paint all millennials with the same brush? LoyaltyOne doesn’t think so. The marketing agency is aiming to set the record straight with its new report, Debunking the Millennial Myth: Data Over Demographics. “We felt the entire marketing world was, frankly, starting to get lazy, saying that if you’re born between this year and this year, you’re all going to act exactly the same, and you’re going to act a total 180 [degree turn] from how your parents are acting,” explained Melissa Fruend, partner at LoyaltyOne Global Solutions, when asked what prompted the research. “None of that is true.” The risk of not understanding millennials can have a serious impact. “If your communications are not appropriate for them, they’re going to tune you out,” says Fruend. Here are the three big millennial myths that are identified—and debunked—in the report:
MYTH #1: Millennials are marketers’ most valuable demographic REALITY: Although millennials are a much-coveted demographic, they don’t have the spending power of other groups. According to Statistics Canada, boomers account for about 46% of all income earned, while millennials bring in just 21%. The takeaway: Millennials are the earners of tomorrow and shouldn’t be discounted, but “more lucrative” opportunities remain with older demographics (gen-Xers and boomers). MYTH #2: Millennials have different needs and expectations REALITY: Sure, there’s an age gap between millennials and boomers and they access information differently, but the LoyaltyOne report found that many in both groups appreciate similar things, such as convenience and good customer service, when shopping. MYTH #3: Millennials are a cohesive group REALITY: According to the report, a preoccupation with the similarities millennials share as a cohort ignores their differences. For instance, while 45% of younger millennials (aged 18 to 24) rely on friends and family for purchase advice, only 28% of older millennials (aged 25 to 34) do. Bottom line: By targeting millennials as one unified group, you may miss reaching them altogether.
Consumers are putting their money where their mouth is
said they are willing to pay more for healthier food choices
54% of survey respondents said they’re willing to pay more for foods and drinks that don’t contain undesirable ingredients. This is driven by “enlightened eating,” where 47% said they follow a diet that limits specific foods/ ingredients, and “sensitive stomachs,” where 28% of households had a food allergy or sensitivity. SOURCE: NIELSEN GLOBAL HEALTH AND INGREDIENT SENTIMENT SURVEY Q1 2016 – CANADIAN RESPONDENTS
THIS YEAR’S CPMA TRADE SHOW AND CONFERENCE WAS CHOCK FULL OF INSPIRATIONAL SPEAKERS:
A WINNING WORKFORCE In a business session, employee engagement expert Eddie LeMoine said employers need to engage, enable and empower their workforce— and that means knowing your employees, growing them and inspiring them at work. Engaged workers are more productive and, ultimately, a boon for your bottom line.
PRODUCE INNOVATIONS CPMA president Ron Lemaire spoke about produce innovations that will put vegetables in play year-round, including condo greenhouses, growing produce in shipping containers, drones that act as pollinators and packaging made of mushrooms. As for trends, look out for healthy plant waters and Moringa, the next superfood.
FRESHII’S MATTHEW CORRIN Corrin said he founded Freshii to offer customers fresh produce in a quick-service environment. With a mission to make healthy food convenient and affordable, the brand’s customizable menu is a large part of the restaurant’s appeal. Freshii, he said, is for anyone who wants to eat clean—no matter if they want to lose weight, build muscle, follow a vegan diet, or just eat more fruits and vegetables.
P LL RESULTS HOW ABOUT THOSE HARD DISCOUNTERS?
is celebrating Canada’s 150th milestone with its Homegrown Tour, a series of pop-up parties held in six cities throughout Ontario. Reinforcing Metro Ontario’s commitment to local communities, local food and local talent, the tour highlights delicious Canadian-themed food and great Canadian music. The Tour’s culinary curator is celebrity chef Mike Ward, who has created Canadian-inspired menus for every stop. Look for pop-up parties in London, Toronto and Thunder Bay this summer. Tickets are free!
LOBLAW: #EATTOGETHER CAMPAIGN Loblaw is on a mission to get Canadians back together at the dinner table, because “when we eat together, good things happen.” Earlier this year, Loblaw released its Eat Together film. In conjunction with Canada’s 150th birthday, the President’s Choice campaign continues to celebrate the social power of food. Loblaw is declaring June 29 Eat Together Day and is calling on Canadians to post the meals they share with friends and family on social media.
Tell us how you’re celebrating Canada’s 150th! Email online editor Kristin Laird at firstname.lastname@example.org.
July/August 2017 Canadian Grocer
h rt e
Don’t know. I’ve heard about Lidl’s impact in the U.K., but Canada is a different market.
Somewhat worried, but competition just forces us to be better.
Very worried. We’re already competing in a tough environment, Lidl would add to our woes.
Idea Generator SHAPE-SHIFTING PASTA Researchers from MIT Media Lab’s Tangible Media Group have invented a programmable pasta that has the ability to transform from two dimensions into three. The prototypes are created using a 3D printer and special machinery that patterns cellulose onto films of gelatin, allowing the noodles to take shape when boiled. When the flat noodles are submerged
in water, they self-fold into traditional shapes such as macaroni and rigatoni. If this technique is adopted for commercial production in the future, pasta could be packed flat (similar to Ikea furniture!). And for CPG companies that are working to make food shipping and packaging more sustainable, this innovation could be especially exciting.
BALLOONS: GETTY IMAGES; PASTA: MICHAEL INDREASANO PRODUCTION
METRO ONTARIO: THE HOMEGROWN TOUR Metro Ontario
SOBEYS: WHAT NEWCOMERS BRING TO CANADA Recognizing the positive contributions of newcomer families in Canada, this campaign highlights employees who have immigrated to Canada to begin new lives, as well as recent stories of philanthropy. Look out for special edition products such as Canadian Flag Pizzas and Sensations by Compliments Celebrate Canada Angus Maple Leaf Beef Burgers (the patties are in the shape of a maple leaf!), available at Sobeys, Safeway, Thrifty Foods, Freshco and Foodland locations across Canada. This year, Sobeys also marks 110 years in business.
Not too bothered. We have a compelling offering that the hard discounters can’t match.
By Shellee Fitzgerald and Day Helesic
How do you feel about the threat posed by Lidl if it lands in Canada?
Here’s how the country’s three big grocers are marking the occasion
To much hype, Lidl has finally made its debut in the United States with the opening of 20 locations in June. The Germanbased grocer has ambitious plans to grow quickly and have 100 U.S. stores up and running by mid 2018. Some analysts say it’s only a matter of time before the European hard discounters, like Lidl and Aldi, look north to Canada. Should that happen, are you prepared?
IT’S CANADA’S 150TH!
We asked readers on CanadianGrocer.com:
TASTE THE FUTURE ANUGA MEAT ANUGA BREAD & BAKERY ANUGA FINE FOOD ANUGA HOT BEVERAGES ANUGA DAIRY ANUGA ORGANIC ANUGA CHILLED & FRESH FOOD ANUGA FROZEN FOOD ANUGA DRINKS ANUGA CULINARY CONCEPTS
STEALING AN APP TO FIGHT FOOD WASTE There’s an app for everything, including selling surplus groceries. Flashfood is a free mobile app that allows grocers to sell “perfectly good” food nearing its expiry date at a deep discount. App users can view and purchase the food from their mobile device and pick it up at the store on the same day. The idea is a win-win: consumers get cheaper groceries and retailers have another chance to sell food that would otherwise be thrown away and end up in a landfill. In Ontario, Farm Boy and Longo’s are testing the app at certain locations with Sobeys also reported to be interested.
SUPERMARKET SUPPER CLUBS U.K. grocer Waitrose is upping its grocerant game with the launch of a series of supper clubs. Described by the retailer as “next-level in-store dining,” supper clubs were held at the new Haywards Heath location this spring. Over eight evenings, the in-store café was turned into a fullservice restaurant where diners enjoyed a three-course meal prepared by chefs from Waitrose cooking schools.
FRESH STORIES French supermarket Les Magasins U has come up with a novel way to show consumers exactly where its fish comes from while reinforcing its freshness. The retailer recently launched La Route du Frais (Fresh Stories), which uses Snapchat to chronicle the journey of its fish from the time it’s caught at sea to when it arrives in store. Snapcodes on the fish labels allow shoppers to access the video via a mobile device. In typical Snapchat fashion, the video disappears after 24 hours. According to TBWA\Paris, which developed the campaign, Fresh Stories not only helps Les Magasins U show consumers the freshness of its product, but it shows the transparency of its supply chain and how it works with local businesses. CG
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INDIE VIEW Gary Sands
Raising the minimum wage is yet another obstacle for small business RECENT CHANGES TO MINIMUM wage in Ontario and Alberta, along with the installation of an NDP government in British Columbia (where we should expect similar moves) have demonstrated, once again, governments’ lack of a targeted approach when it comes to small businesses. Each small business sector is different and has unique challenges and circumstances. In grocery, for example, profit margins are lower than other retail sectors and there are extra costs for energy and food safety, as well as unique issues around transportation. Now, through the implementation of a $15 minimum wage in Ontario, there will be even more pressure on small businesses in the province. None of these factors are
taken into account by governments, nor do they comprehend the various fees, regulations and costs that grocers and other small businesses must contend with from all three levels of government. Instead, each level tends to view its latest regulation, policy or legislative measure only through the narrow lens of its own silo. The Ontario government’s recent announcement to hike the minimum wage by 32% within a year and a half is not only astounding, but short-sighted and counterproductive. Small businesses are the backbone of Canada’s economy. About 40% of employed Canadians work for companies with fewer than 100 employees. Small food
and foodservice businesses are already seeing payrolls climb. According to a report from Scotiabank published in the Globe and Mail, small businesses averaged a 1.4% increase in payroll growth versus a 0.9% increase among firms with more than 500 employees between 2010 and 2015. It seems like government has decided to set up a roadblock for business. But why on Main Street? This one-sizefits-all approach that imposes huge increases in labour costs will disproportionately impact small businesses compared to larger businesses. The government accepts that higher credit card swipe fees imposed by Visa and MasterCard disproportionately impact small business.
So why, one asks, would a similar idea be ignored when considering wage increases? While the field on which small business plays is far from a level one, retailers recognize that competition can be influenced by changing demographics, consumer demands and also spending habits. It should not, however, be altered by arbitrary labour legislation changes and nonsensical minimum wage hikes within a time period that will negatively affect small business owners. That said, government sometimes does the right thing. When Ontario was establishing a new distribution system for beer and wine that allowed grocery stores to bid for licences, the government accepted Canadian Federation of Independent Grocer’s argument that the challenges faced by small grocers were greater than those of the larger chains. For that reason, they created two “pools” for licence bidding: a Class A category for chains, and a Class B for independents. Why don’t all provinces adopt a similar framework for minimum wage increases? What is so difficult about having a small business category? Government should be creating incentives for small business, not disincentives. It’s time to take the roadblocks off of Main Street; it’s where most of the business community in Canada lives. Let’s keep it that way! CG
Gary Sands is the senior vice-president of public policy and advocacy at the Canadian Federation of Independent Grocers and the chair of the Small Business Matters Coalition. Reach him at firstname.lastname@example.org
July/August 2017 Canadian Grocer
FOOD BYTES Joel Gregoire
GREAT EXPECTATIONS What consumers want from the grocery store is evolving. Grocers need to adapt IT’S AS TRUE NOW as in the past: grocery is a cutthroat business and there’s no reason to think the future will be any different. Margins will continue to be tight, options for consumers will be plentiful and innovation in the segment will undoubtedly accelerate. In short, grocers will need to adapt to succeed. Adaptation is good in that it offers opportunity for fresh ideas grocers can leverage. But where to start? Though there’s no single solution, we can look at how consumer expectations are evolving. For its Grocery Retailing Canada 2016 report, Mintel asked consumers what they’d like to see more of in grocery stores. Based on the responses, it was clear that shoppers want to “try before
they buy.” Consumers were most interested in being able to sample cooked versions of frozen meals, followed by pop-up booths in store that allow for sampling different centre-store products. While sampling has been a supermarket mainstay for decades, the finding illustrates that investing in activations in-store is essential in upping the consumer experience. In-store boutiques for categories such as tea are an extension of sampling, as they provide more catered services related to specific products and brands with the ultimate aim of moving volume. The use of sampling as a traffic driver is important in the centre store with more than half (54%) of shoppers surveyed stating they “prefer
to get in and out of the grocery store quickly rather than browsing the aisle.” In other words, the opportunity to experience foods is key in making the centre store a destination rather than an obligation based on the need to stock up. Integrated technological solutions can help lure younger shoppers to the centre aisles. Nearly half of 18- to 24-year-olds (47%) surveyed said they were interested in an app that tells them where the items on their grocery list are located in the store. Furthermore, 41% of this group said they’d like to receive in-store offers by logging on to store Wi-Fi, while a third (33%) are interested in scanning bar or QR codes with their mobile phones to access
WHAT CONSUMERS WANT “Which of the following would you like to see more of in grocery stores, if any?” 40
20 15 10 5
Ability to sample cooked versions of frozen meals/entrées
Pop-up booths in-store that allow for the sampling of different centre-of-store products*
0 SOURCE: LIGHTSPEED/MINTEL, SEPTEMBER 2016 BASE: 1,900 INTERNET USERS AGED 18+ WHO ARE GROCERY SHOPPERS IN HOUSEHOLD
An app that tells you where the items on your grocery list are located in the store
Ability to receive information about in-store offers by logging in to store Wi-Fi
Ability to scan bar codes or QR codes with mobile phone to access more detailed product information
detailed product information. As homes and cars get smarter, it stands to reason that the next generation of consumers will also want to shop at smarter stores offering a more tailored and efficient experience. As augmented reality evolves— think Pokémon GO—look for mobile devices to become more integrated at retail. Amazon is, perhaps, on the forefront of marrying the latest technology with the in-store experience. The company bills its Amazon Go concept store as offering “the world’s most advanced shopping technology.” Its main value proposition is the elimination of the check-out line. Linked to their phones, consumers can grab products off the shelf and walk out, having their account billed automatically. Forgot your wallet? No problem! Just don’t forget your smart phone. The net “benefit” is Amazon’s opportunity to reallocate store employees to enhance other elements of the shopping experience. The vision doesn’t have to be a store with fewer employees, but one where employees offer more specialized expertise and added value. No one can predict the future with absolute accu r a c y, b u t g r o c e r s a n d manufacturers can evolve by meeting shoppers’ demands. Leveraging technology to invest in a more personalized shopping experience is one such path of evolution. CG
Joel Gregoire is senior food and drink analyst at Mintel, the world’s leading market intelligence agency. Based in Toronto, Joel researches and writes reports on Canada’s food and drink industry. @JoelDGregoire
*(eg booth with variety of pasta sauce or coffee flavours)
July/August 2017 Canadian Grocer
SHOPPER SENSE Carman Allison
FINDING THE SILVER LINING IN SLOW GROWTH Slowing growth in retail isn’t all bad news. Along with the challenges are opportunities, too AS THE CANADIAN retail landscape
they’re making fewer shopping trips. So far in 2017, Canadian consumers have made 2.3billion trips, down 7% from 2012. Millennials made the fewest trips, with just 116 annually, while the Greatest Generation made 193 trips. The popularity of warehouse clubs is contributing to the trend. At these outlets, consumers purchase larger-sized items (reducing cost per use), which results in a slower purchase cycle and fewer opportunities for retailers to engage with consumers.
evolves, the road is filled with unique challenges for both manufacturers and retailers. The greatest challenge in 2017? Slow growth. This year is already shaping up to be difficult with less than 1% growth. Let’s take a look at the stumbling blocks facing the fast-moving consumer goods (FMCG) industry.
DEFLATIONARY PRESSURES Deflationary pressures have eroded retail growth. While consumers see lower prices as a win, this has translated to a potential $819-million loss across Canada in the past year alone. Throughout 2016 and 2017, regular prices have dropped 1.5%; it’s definitely a buyer’s market.
E-COMMERCE Online shopping is proving to be more than a fad; it’s become a lasting option for time-strapped con sumers. And while we’re still in the early stages of e-commerce for FMCG, there’s no doubt online is changing the growth story. In Canada, only
DECLINING TRIPS Even though Canadians are “winning” at the register,
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.0
some retailers have jumped on the trend, with many not yet offering consumer e-commerce sites. With the Internet in the palm of consumers’ hands, they are no longer restricted to Canadian retailers and have unlimited access to global products that fit their needs and budgets.
AREAS OF OPPORTUNITY With all this talk of doom and gloom, it’s imperative for retailers to find areas of opportunity to ensure they are reaching their goals. Growth opportunities must be strategic, as consumers are not flocking to take advantage of lower prices and consumption isn’t increasing.
Connectivity at its best While e-commerce is a challenge, it represents an opportunity for retailers as online and digital outlets create
LOWER PRICES ARE FUELLING THE SLOWDOWN Consumers are winning with lower prices 3.7
Total: +0.5% Regular: -1.5% Feature: +3.2%
-0.5 -0.9 Jan. 9 Feb. 6 Mar. 5 Apr. 2 Apr. 30 May 28 Jun. 25 Jul. 23 Aug. 20 Sep. 17 Oct. 15 Nov. 12 Dec. 10 Jan. 7 Feb. 4 Mar. 4 Apr. 1 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017
July/August 2017 Canadian Grocer
Wellness awareness? Canadians’ desire for a healthier lifestyle is another opportunity for retailers to offer better-for-you items. In fact, 54% of Canadians say they’re willing to pay more for food and drinks that don’t contain undesirable ingredients. It’s worth noting that health and wellness expands beyond food aisles and plays an important role in adjacent departments such as overthe-counter (OTC) solutions. Within OTC, energy and nutrition products, medical and nutritional supplements, and natural health supplements accounted for more than $1 billion in sales in 2016. With all three categories growing (20%, 12% and 4%, respectively), retailers with health solutions on shelf are ahead of the game in meeting consumer demand. Becoming an ally in consumers’ efforts to live a healthier life won’t go unnoticed as Canadians grow more and more health conscious. CG
NIELSEN MARKETTRACK—ALL CHANNELS, TOTAL TRACKED SALES INCLUDING FRESH RANDOM WEIGHT—4 WEEKLY PERIODS
new touch points along the shopper journey. Retailers able to provide an exceptional e-commerce experience will benefit from giving consumers an option to shop at their favourite local stores, while also creating additional touch points and engagement along the path to purchase. Today, e-commerce channels in Canada capture 1.9% of the market; however, by 2020 the dollar share is projected to rise to more than 5%.
Carman Allison is vice-president of consumer insights at Nielsen in Toronto. @CarmAllison. A copy of the report cited in this column is available to Nielsen clients at answers.nielsen.com
AND THE WINNERS ARE … Thirty-one new and innovative grocery products win at the 2016 Canadian Grand Prix New Product Awards Potato chips that look like French fries.
RETAIL COUNCIL OF CANADA
By Shellee Fitzgerald
A juice packed with protein and fibre. And sushi you can conveniently eat like a sandwich. These are just some of the innovative products that were celebrated at the 2016 Canadian Grand Prix New Product Awards at a gala event in Toronto this May. Racking up four awards, Arla Foods was the big winner for 2016. The Ontario company won three Grand Prix trophies for its Castello Decorated Cream Cheese Spread. The hand-decorated cheese won in the Deli Meats and Cheeses category, as well as for Innovative Packaging, and Innovation and Originality. Arla also nabbed a trophy in the Dairy category for its Lactose Free Creamy Cheese Spread. “We are very proud to receive these awards,” says Nancy Strauss, Arla Foods’ marketing manager. “It takes our entire
team to bring new cheeses to the market, so this award is recognition for that hard work.” For its Au Pain Doré Origine Pastries, Quebec-based Bridor won in the Bakery Fresh category as well as the coveted All Canadian product award. Marie-Eve Boyer, Bridor’s brand manager, says her company’s pastries are European-inspired but offer a North American twist. Riviera, a big winner at the 2015 Grand Prix Awards with its yogurt packed in small glass jars, returned in 2016 to win the coveted Overall Consumer Value award for its Riviera GMOFree Set-Style Yogourt. Kathleen Hébert, marketing project co-ordinator at family-owned Riviera said winning this year’s award was “an immense honour that reinforces our ultimate mission of staying on top of food industry trends by understanding what matters most to consumers.” Presented by the Retail Council of Canada, the Grand Prix Awards celebrate the best, most innovative grocery products to hit the market. Turn the page to see the 2016 winners by category. July/August 2017 Canadian Grocer
Bridor Au Pain Doré Origine Pastries BEVERAGES
A. Lassonde Oasis Active CONDIMENTS & SAUCES
Max + Marcus Gourmet Products Max + Marcus Dijon Mustard CONFECTIONERY & SHELF STABLE DESSERTS
Theobroma Chocolat by Vigneault Chocolatier Organic Chocolate 80g packaging “resealable’’ DAIRY (Milk, Yogurt, Cheese & Spreadables)
Arla Foods Arla Lactose Free Creamy Cheese Spread DELI MEATS & CHEESES
Arla Foods Castello Decorated Cream Cheese Spread DESSERTS (Fresh, Refrigerated or Frozen)
Fontaine Santé Organic Sorbet FROZEN OR REFRIGERATED PREPARED FOODS & ENTREES
MEAT, EGG & SEAFOOD (Fresh, Refrigerated or Frozen)
Mito Sushi Maki2GO SNACK (Savoury)
Calbee North America Calbee – Whole Cuts
Private Label – Food
Save-On-Foods Western Family Wraps CONDIMENTS & SAUCES
Sobeys Sensations by Compliments Spirited Mickie
Patience Fruit & Co by Fruit d’Or Artisan Blend Non-Food
Carlton Cards Twirly Treasures HEALTH CARE – OTC
InQpharm North America bmiSmart I-REMOVE HOUSEHOLD PRODUCTS
Sun Products Canada Sunlight 4 in 1 Powercore Pacs PAPER, PLASTIC & FOIL
Kruger Products SpongeTowels Ultra Strong Minis PERSONAL CARE
Gebr, Weyersberg – King’s Crown King’s Crown Ultimate Beard Box
CONFECTIONERY & SHELF STABLE DESSERTS
Federated Co-operatives Limited Co-op Gold Buttercrunch Toffee Chocolate DESSERTS Fresh, Refrigerated or Frozen)
Federated Co-operatives Co-op Gold Sorbetto FROZEN OR REFRIGERATED PREPARED FOODS & ENTREES
Private Label – Non-Food
Canadian Tire Corporation FRANK + Full Circle Program (14 Products, 3 Refills) Kitchen Compost Collector & Dust Whisperer Microfiber Duster PET NEEDS
PetSmart Only Natural Pet Food Special Awards
Bridor Au Pain Doré Origine Pastries OVERALL CONSUMER VALUE
MEAT, EGG & SEAFOOD (Fresh, Refrigerated or Frozen)
INNOVATION AND ORIGINALITY
Walmart Canada Your Fresh Market – Kansas City Style BBQ SHELF STABLE PREPARED FOODS & ENTREES
Metro Brands Irresistibles Organics Whole Grain Quinoa Metro Brands Irresistibles Vegetable Chips
July/August 2017 Canadian Grocer
Sobeys Compliments Super Squeeze Real Fruit Purée and Vegetable Juice Snack
Costco Wholesale Kirkland Signature Pepperoni Pizza Hand Stretched Crust 4 Pack
Riviera Riviera GMOFree Set-Style Yogourt
Arla Foods Castello Decorated Cream Cheese Spread INNOVATIVE PACKAGING Arla Foods
Castello Decorated Cream Cheese Spreadcial Awards
Arsanal Kale C hi The Healthy Crunch Companyy ike to ccongratulate ate all would like Star Women Awards Winners
Private Label – Food Private Label – Food
Good source of PROTEIN – 10g NO sugar added 2 portions of fruits High source of ﬁbre Gluten-Free
Proud winner of the new product award in the B e v e r a g e c a t e g o r y.
@HealthyCrunch #HappyCrunching unching m www.healthycrunch.com
Charting a C
MICHAEL GRAYDON ON AN EVER-CHANGING GROCERY INDUSTRY AND HOW FCPC IS NAVIGATING ITS CHOPPY WATERS ASK MICHAEL GRAYDON what he likes
most about his job and he’ll tell you it’s the diversity. “No day is the same as yesterday; it’s ever-changing and I love it,” he says. From dealing with government on myriad issues impacting the industry to building relationships with retailers, Graydon’s days have been full since becoming CEO at Food and Consumer Products of Canada (FCPC) last September. But he’s well used to steering the ship; he previously held top jobs at the B.C. Lottery Corporation as well as a casino development company. He’s also racked up grocery experience, completing a stretch at Sobeys. We caught up with Graydon to talk about relationships, industry disruption, and what’s next for FCPC. Here are edited excerpts from our interview.
How would you describe the current relationship between retailers and manufacturers? It’s unfortunate that it’s probably at a very low ebb. When I reflect back some 15 years ago when I was at Sobeys, the manufacturer-retailer relationship was a lot more progressive than it is today. I think there has been a significant transition from working together to find ways to drive sales and grow the business to becoming purely a procurement relationship. We’ve got to find a way to turn this around and create a better environment of growth. It certainly needs to be
win-win. I’ve always been of the mind that strong retail results in strong manufacturing but strong manufacturing can also result in strong retail. When you get into the transactional environment we have today, you see a lack of innovation, investment and growth. It’s unfortunate, but I do believe there are opportunities for that to change. I’m hopeful—and it’s part of my mandate here at FCPC—to try to facilitate a change in perspective so we can get to this win-win.
What issues do you think both sides could be working on more collaboratively? Food waste is a great opportunity. There are some examples from around the world where the elimination of food waste is within reach. When you look at the amount of product that gets thrown out, it’s unacceptable; we’ve got to find solutions. I think both manufacturing and retail have taken some real responsibility. Now we just need to start to work together a little more efficiently.
What are the big disruptors in the industry right now? Obviously, e-commerce has been a significant disruptor in retail outside of grocery but I think, as you start to see the momentum of organizations like Amazon, it’s going to have a significant impact on grocery also. The second disruptor is consumers’ desire for
transparency. As an industry, we have to respond very effectively to meeting that consumer need. We’re about to implement a new program here in Canada called SmartLabel. It’s a digital label that offers full disclosure of everything that’s in that product by scanning a code [via a smartphone]. Given this next generation of consumers’ desire to utilize technology to get answers, we have to be in aisle, and in a position to respond in real time. SmartLabel was developed by Grocery Manufacturers Association and we’re licensing it here in Canada. It’s working famously in the United States; the number of SKUs is growing and the number of retailers getting involved is expanding significantly. The third thing is the United States itself. The piece that worries me the most is the potential change to corporate tax policy [under the new government]. If you have corporate taxes in the United States reduced to 15% and there is no responsive measure from Canada, competitiveness for manufacturers exporting to the United States is going to be very difficult.
What are your goals for FCPC? There’s a lot going on in the federal government right now with the Healthy Eating Strategy, the new Canada’s Food Guide, front-of-pack labelling and advertising to children. That the industry hasn’t been consulted on the Food Guide is unfortunate because I think there’s a tremendous amount of information we could bring to the government that could help. We’re working hard to influence outcomes around this and to advocate for outcomes we believe are in the best interest of consumers and our manufacturers. Long term, we’re working hard to try to influence change in the relationship with retail. I think it’s critical that we do it, even for retail’s own sustainability. CG
By Shellee Fitzgerald Photograph by Nikki Ormerod
July/August 2017 Canadian Grocer
THE WAITING GAME By Chris Powell Illustration by Sandi Falconer
July/August 2017 Canadian Grocer
European hard discounters Lidl and Aldi are making aggressive moves stateside but havenâ€™t yet set their sights on Canada. If they do, how can grocers here fend off an attack?
IT WAS A STUNNING CLAIM, one that likely sent the eyebrows of more than a few grocers gathered at the Retail Council of Canada Store 2016 conference shooting skyward. James Bacos, managing partner of retail at the German office of global management consultancy, Oliver Wyman, told the gathering that, in 10 years, as many as half of the large grocers in Europe might not exist. Their would-be killers? The German hard discounters Aldi and Lidl. Knocking out competitors with a lethal combination of low prices and premium private label products, Aldi and Lidl have proven irresistible to European shoppers. The discount retailers have grown their combined network from 8,000 stores in 2003 to more than 20,000 today. After steamrolling their European counterparts, they are now setting their sights on North America. Lidl opened 20 U.S. stores this June (with a goal of 100 stores open by summer 2018) and has clearly signalled its intention to go “mango a mango” with American established grocery giants by opening in close proximity. “They make a habit of locating their stores very close to the major centres of supermarket sales,” says David Rogers, president of the Chicago consultancy DSR Marketing Systems. “Aldi’s pattern is to go across the street from Walmart, and Lidl is copying that. They want to feed off existing sales and awareness.”
Lidl is following the path forged by Aldi, which opened its first U.S. store in Iowa in 1976, and now operates 1,600 stores in 35 states. Aldi is in the midst of an aggressive expansion strategy—the latest salvo in what Rogers describes as a “blood war” between the two companies—with the objective of increasing its U.S. store count to nearly 2,000 by 2018. For now, the hard discount threat remains confined to the United States. Neither chain has commented publicly on possible expansion into Canada, although, in the early aughts, Lidl had plans to enter the market, even establishing a head office in Mississauga, Ont., before abruptly backing away with no official explanation. “They’re a very secretive company, as is Aldi, but I suspect they got a little worried about the size of the market and that it’s very dispersed,” says Rogers. “You’ve got six major urban areas, but they’re spread over three thousand miles.” Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, agrees that Canada is a tough market to enter, given both its geography and its established discount retailers. Canadian grocers also operate on razorthin margins that all but the hardiest newcomers might find unfavourable. (Pre-tax profits for the sector hover just under 1.5%.) “To come into the Canadian market, you have to be a really good operator,” he says. Target’s ill-fated entry into Canada should also serve as
July/August 2017 Canadian Grocer
a cautionary tale for potential newcomers, Barlow adds. “It’s something that happens both on the supplier and the retailer side—thinking that the market here mirrors the U.S.,” says the one-time Coca-Cola executive. “I can tell you that we may look the same and talk the same, but the market dynamics are significantly different.” DSR’s Rogers acknowledges that Canada has a more evolved discount sector than the United States, with operators including No Frills, FreshCo and Food Basics. But, he says, these chains have “gone soft” in recent years, even moving slightly upmarket with their continued emphasis on fresh. For their part, Canadian grocers remain wary of the impact hard discount grocers could have on their business. In a recent survey on CanadianGrocer.com, nearly 36% of respondents admitted to being “very worried” about the possibility of Lidl arriving in Canada, while an additional 26% admitted to being “somewhat worried.” Their concern isn’t unwarranted. According to an April report from the Boston Consulting Group (BCG), How Discounters Are Remaking the Grocery Industry, these stores are becoming an alternative for today’s consumers, and might soon account for half of all grocery sales in many markets. Where hard discounters’ business was once cyclical, rising and falling in tandem with consumer confidence, they are now a firmly entrenched alternative to mainstream grocers. Says the BCG report: “Their customer base has grown beyond low-income shoppers to include savvy, high-income consumers who are increasingly asking a fundamental question: “Why should I pay more?” Discount is also a hugely under-represented sector in Canadian grocery, accounting for only around 3% of the total market, according to some reports (compared with 40% in Denmark and a whopping 60% in Turkey). According to the BCG report, discounters are growing share through a variety of tactics: opening bigger stores with more innovative features; expanding their fresh and organic product assortment; improving the customer experience through extended hours and faster checkout service; and developing private label products that are not only cheaper, but capable of beating out name brands. Bill Bishop, founder of the Chicago consultancy Brick Meets Click, says developing a strong private label offering is crucial to competing with Aldi and Lidl, should they arrive in Canada. “You could argue that Loblaw has [signature private label brand] President’s Choice but the premium private label products coming out of Aldi and Lidl are exceptional,” says Bishop. “It’s the main thing they do differently.” Indeed, Aldi captured an industry-leading 40 awards— including 15 innovation awards—at the Food & Drink Own Label Awards in the U.K. this year. And a recent report in U.K. trade publication The Grocer stated that private label accounts for 95.2% of Aldi’s sales in canned goods, and 84.9% of Lidl’s—far surpassing the market average of 39%. With approximately 250 stores across Canada and a strong private label offering in President’s Choice, No Frills, Loblaw Companies’ 39-year-old banner, would be serious competition for European deep discounters, notes Bishop. “No Frills has a very strong reputation, and that prepares Loblaw Companies to defend itself against the hard discounters,” he says. “Knowing the way Loblaw works, and how smart and
July/August 2017 Canadian Grocer
relentless it can be, the company will be able to take some additional costs out if needed, drop its prices and make the business even more effective.” Bishop adds that No Frills’ strength in key competitive areas such as meat and produce would enable it to compete with any challenger. He notes, however, that both Aldi and Lidl have built exceptional procurement systems that enable them to bring international products to their stores more easily. The hard discounters likely pose a more serious threat to Canada’s traditional grocery retailers, says Bishop, who would be forced to compete with chains whose price difference on some items can be as much as 25 to 30%. The European hard discounters also excel at promoting deep discounts for a limited number of products, which helps drive store traffic. A mango that typically sells for 99 cents, for example, might be promoted at 39 cents. “Their price reductions are not 5, 10 or 15%, they’re more than 50%,” says Bishop. He says one way for mainstream grocers to combat hard discounters would be to reduce prices on 300 to 400 “top of mind” items. “You need to find ways to reduce price on some products, so it’s not a glaring differential between what’s in your basket versus the hard discount basket,” he says. DSR’s Rogers says Aldi and Lidl stores tend to carry only about 1,600 SKUs, compared with 30,000 to 50,000 for a mainstream grocer. Established grocers need to be “very competitive”—pricing items within 5%—on duplicate products, while promoting their superior product assortment and things such as customer service and better fresh foods. “Basically, you’ve got to give [some items] away and make your money on the other things you do,” he says. The BCG report also states that cutting prices by 5% requires a reduction of about 20% in operating costs. This can be achieved through reducing the total loss of unsellable food, reducing supply chain complexity, negotiating more favourable pricing with suppliers and striving for more efficient use of labour. Bishop says the hard discount retailers continue to place a strong emphasis on dry goods, opening up an opportunity for incumbents to successfully compete with a strong fresh food offering. “In order to blunt the appeal of their logistical efficiency, you need to have more differentiated fresh food,” he says. “Some of the better retailers in Canada, like Longo’s, have done really well.” Perhaps some indication of what might happen if Lidl and Aldi were to enter Canada comes from Australia, which frequently draws comparisons with Canada because it has a similar population spread over a huge swath of land. Aldi entered the Australian market in 2001 and now controls nearly $12.2 billion of the country’s $91 billion grocery industry, with some experts predicting it could grab as much as one-fifth of market share within five years. And there have been casualties. Aldi’s arrival contributed to the 2011 demise of the discount chain Franklins, leaving mainstream grocery chains including Woolworths and Coles vulnerable to Aldi’s deep discounting strategy. “There was no price competitor left when [Aldi] beat up Franklins,” says Rogers. For now, Canada’s grocers will just have to wait and see how things unfold south of the border, and ready themselves for battle should Aldi and Lidl turn their attention north. CG
ear Âˇs 2017 Star Women to all of this y
Sarah, We celebrate your leadership in delivering the best in food, health and beauty, as well as your commitment to our Loblaw purpose â€“ Live Life WellÂŽ. Congratulations on winning a Star Women Award.
Sarah Davis, President
MEET OUR 16 OUTSTANDING WOMEN IN GROCERY FOR 2017 Canadian Grocer’s sixth annual Star Women Awards recognize women who have demonstrated expertise, innovation, vision and leadership in the grocery business. From retailers to distributors to foundation and CPG professionals, these are the women who are making a real impact and changing the food retail landscape. Nominated by the grocery industry and chosen by Canadian Grocer editors and former Star Women winners, this year’s Star Women are some of the best and brightest in the industry.
Marie Chevrier Founder and CEO
SAMPLER While studying marketing at the University of Ottawa, Marie Chevrier worked with experiential marketing firm, Mosaic, handing out product samples on the street and at events. “That experience made me realize how untargeted some of those strategies can be,” she says. Chevrier thought the existing model of product sampling—a cornerstone of CPG and food marketing—was outdated, wasteful and needed improvement. So in 2013 she launched Sampler, a digital tool that uses technology and data to put the right samples in the hands of the right customer at the right time. In just three years, Sampler has worked with more than 200 CPGs and won awards from Mondelez, Kimberly-Clark, Unilever and Kraft Heinz. “Those are four big CPG companies that are investing in innovation and running competitions to get access to game-changing ideas,” she says. “To win those awards has been a good indication that we are solving a really big problem for CPG companies.”
By David Brown and Rebecca Harris
Join us in celebrat ing our 2 017 winners at the STAR AWARDS WOMEN B RE AKF AST in Toron to o n S e pt. 21 . Visit Can adiangro cer.com for info and tick et s.
Alberta Clapp Director, Research and Development
CONAGRA BRANDS When Alberta Clapp graduated from the University of Guelph with a degree in nutrition and food science, she wasn’t sure where she wanted to work. “I never wanted to be a dietitian, telling people July/August 2017 Canadian Grocer
what to eat,” she says. After taking a job in nutraceuticals for a few years, she joined Conagra where she is now a senior leader, responsible for driving new product and category innovation. Clapp oversees an international team charged with ensuring Conagra is meeting the evolving needs of the market—she may not be telling people what to eat, but she’s making sure Conagra gives them what they want to eat. Clapp and her team are reformulating sauces to remove sugar while adding flavour as well as introducing more authentic ingredients such as onions, garlic and wine. Clapp has nearly 18 years of technical industry experience, but it’s her willingness to build relationships both with the people on her team and teams from across the company that set her apart. “It’s something I seem to be good at,” she says. “I enjoy the people side of things.”
the in-store experience. “Innovation is all about vision, inventing and changing the game,” she says. “If you’re not innovating, you’re not growing.” Dalimonte is also involved in the Network of Executive Women and Women in Food Industry Management, and is passionate about mentoring young professionals.
acquisition of Shoppers Drug Mart. “Listening and trusting in the expertise of colleagues working on these projects led to open and honest dialogue, which built strong, integrated and collaborative teams that ensured the projects were successful,” says Davis. On top of overseeing day-to-day operations at Loblaw Companies, Davis is chair of the President’s Choice Children’s Charity and the Women@Loblaw network, which focuses on professional development, networking and access to company leadership.
Sarah Davis President
Senior VP Merchandising and Commercial Programs
SOBEYS Mary Dalimonte has accomplished a lot in her 40-year career in the grocery business, but she’s quick to credit her team. “Anything we accomplish, we accomplish together,” she says. Dalimonte held senior roles at Loblaw before joining Sobeys in 2008 as general manager of Sobeys Urban Fresh format, playing a key role in its development. In her current role, Dalimonte was instrumental in developing a new concept store, Sobeys Extra, which features expanded fresh, grocery and HMR offerings combined with in-store experts and services. Overseeing the team responsible for bringing new retail methods and products to Sobeys, Dalimonte drives an agenda of innovation and elevation of
July/August 2017 Canadian Grocer
Naniss Gadel-Rab Channel and Customer Development Director
UNILEVER CANADA Naniss Gadel-Rab’s career at Unilever started in the Middle East 19 years ago. Taking her to eight countries across two continents, she finally arrived at Unilever Canada in 2007. She’s been integral to many of Unilever’s marketing programs and has often earned praise and international recognition for her role in in-store programs. Under Gadel-Rab’s leadership, the Canadian arm of the
I like to think that I’m a great coach. I can help people be the best that they can be and that has helped me create a really strong team.” —Barbara Ann O’Brien, Executive VP, Bonté Foods
NANISS GADEL-RAB PHOTOGRAPHED BY JENNIFER ROBERTS
In Januar y 2017, Sarah Davis was appointed president of Loblaw Companies, becoming the most senior woman in the leadership ranks of a major Canadian grocery retailer. Davis first joined Loblaw in 2007 as controller, and served as chief financial officer from 2010 to 2014. She was then appointed chief administrative officer, responsible for supply chain, human resources, information technology, process and efficiencies, real estate and strategy. Davis has overseen some of the most transformative programs in the company’s recent history, including the implementation of SAP, the creation of Choice Properties REIT and the
Congratulations to UNFI Canadaâ€™s own Star WomDn In Grocery Award Winner
Melinda Zoccoli! Congratulations Melinda, from our proud supplier partners!
is proud to recognize
Shannon Skinner and Natalie Voizard
Congratulations to all winners of Canadian Grocersâ€™ 2017 Star Women in Grocery Award! 36
July/August June 2017 Canadian 2017 Canadian Grocer Grocer
for their leadership, innovation, dedication and contribution to the grocery industry.
company has demonstrated solid results. Gadel-Rab says it’s very important to have superior execution at retail. “The store is the point of truth; we want to have the best experience for consumers at the point of truth.” Aside from her impressive marketing contributions, Gadel-Rab has also worked hard to improve diversity and inclusivity within the company. “Diversity and inclusion make Unilever a better place to work,” she says. “It provides a risk-free environment where every voice is heard, all ideas are welcomed and people are not afraid to speak up.”
Natasha Gunn Director, Consumer Global Insights
GENERAL MILLS CANADA As General Mills’ director of global consumer insights, Natasha Gunn has been innovating to create more cost-effective and intuitive ways of learning about consumers. Working with a research partner, she implemented an in-house research tool that can survey hundreds of consumers in a matter of days for a fraction of what it would usually cost. Rather than use traditional focus groups, which can be intimidating for participants, Gunn created a “Lifeology” board game to get to know consumers better. With the help of those insights, General Mills’ portfolios for South Asians and natural/organic consumers have more than doubled in the past year. Gunn and her team’s insights also provided the foundation for purpose-based campaigns for Nature Valley and Honey Nut Cheerios. “A powerful insights team is really the voice of the consumer,” says Gunn. “Virtually every great idea is built around a meaningful consumer insight.”
Director, Community Investment
VP, Customer Development
PEPSICO FOODS CANADA
With a passion for helping people and a strong business acumen, Renée Hopfner plays a big part in ensuring Canadians “eat better, feel better and do better”— Sobeys’ mission since 2013. In 2014, Hopfner helped launch Sobeys’ Better Food Fund, which supports Canadians’ access to wholesome food, basic cooking skills and nutrition education. “I view my role as a way to look for innovative partnerships that align back to our business, and that make a transformative difference in the lives of Canadians,” says Hopfner, who joined the company (then Canada Safeway) in 2005. In a partnership with WE Charity, Hopfner was instrumental in developing the Home Cook Heroes program, which provides students with nutrition literacy and cooking skills. Last fall, Hopfner rolled out a program with Special Olympics Canada, providing people with intellectual disabilities access to nutrition guides, cooking classes and fresh food. She also coordinated Sobeys’ fire relief efforts in Northern Alberta last year.
Cara Keating has held progressively senior roles since joining PepsiCo as a national account manager 13 years ago. Late last year, she was promoted to VP of customer development—the first woman at PepsiCo Foods to have the role. Prior to that, Keating was area VP for Ontario—also the first woman in that role—where she led a team of 700 people delivering more than $650 million in sales. From 2012 to 2015, Keating led PepsiCo Canada’s WIN (Women’s Inclusion Network). She expanded WIN to PepsiCo Beverages, establishing a framework and structure while growing membership by 58%. Keating is currently a member of the board of directors of Forward Together, an industry-leading professional develop ment conference for women. “One of the accomplishments I’m proud of is being the first woman in a number of senior roles and I want to make sure I’m not the last woman in these senior roles,” she says.
I’ve had really great leaders and coaches throughout my career, people who have taken the time to invest in and develop my potential. That’s why I’ve been able to get where I am today.” —Elaine Lukowski, VP, Home and Entertainment Merchandising, Loblaw Companies July/August 2017 Canadian Grocer
I view my role as a way to look for innovative partnerships that align back to our business, and that make a transformative difference in the lives of Canadians.” —Renée Hopfner, Director, Community Investment, Sobeys
Barbara Ann O’Brien Executive VP
MICHELE SCOTT PHOTOGRAPHED BY JENNIFER ROBERTS
VP, Home and Entertainment Merchandising
McKEEN METRO GLEBE
As a senior director of Loblaw brands from 2012 to 2016, Elaine Lukowski was responsible for developing products and strategic initiatives for its private label brands including PC Black Label and PC Organic. “It was anything new and next,” says Lukowski. “It was looking at consumer trends to see where we needed to innovate to match where the customer was going.” In just one year, Lukowski’s team doubled the number of new PC Organic SKUs launched. Then last year, at just 32 years of age, she was promoted to the role of VP of home and entertainment merchandising, leading a team of 60 on a business with revenues nearing $1 billion annually. Lukowski attributes her success to an ability to build relationships and work collaboratively with people across the organization. She also puts special emphasis on the mentorship that she has received. “I’ve had really great leaders and coaches throughout my career, people who have taken the time to invest in and develop my potential,” she says. “That’s why I’ve been able to get where I am today.”
Rebecca McKeen has the grocery business in her blood. In 1910, her great-grandfather opened a grocery store in Ottawa, and in 1955, her grandfather opened the current location of McKeen Metro Glebe (then McKeen IGA). Her father took over the business in 1989, and in 2013, McKeen became owner/executive director. This devoted retailer has successfully furthered the store’s focus on local products. Through a partnership with Eastern Ontario Local Food Network, McKeen helped develop an interactive display that promotes local foods and educates consumers. She also spearheaded a campaign with labelling company Localize. Local products are given label tags that indicate where the product was made and where the ingredients come from. Among staff, McKeen is known for her enthusiasm and positivity. “I like to think of myself as a director and not a manager,” she says. “I make sure everyone has the knowledge and tools to run their departments like their own businesses, and I’m there to help pull everything together.”
In the late 2000s, Bonté Foods was not a thriving company. Then Barbara Ann O’Brien was promoted to vice-president. A longtime employee of Bonté Foods, O’Brien had been with the deli meat manufacturer since graduating university. “Barbara led what was once a struggling company in the late 2000s to the award-winning success story it is today,” says Michael Whittaker, president of Bonté’s parent company, Trucorp Investments. Under O’Brien’s leadership, profitability increased by a whopping 800% in four years. Between 2013 and 2016, gross margins improved by 4.5%; meat sales increased 67%. She pressed the company to launch natural meat products with no artificial preservatives as well as a halal line, and in 2015, all meat products were converted to gluten free. Today, the company has almost 200 SKUs, twice what it had four years ago. “I like to think that I’m a great coach,” she says. “I can help people be the best that they can be and that has helped me create a really strong team.”
Michelle Scott Executive Director
THE GROCERY FOUNDATION In a few months, Michelle Scott will leave the grocery industry, retiring to July/August 2017 Canadian Grocer
Our team at Sobeys Inc. congratulates Mary Dalimonte Senior Vice President, Merchandising and Commercial Programs for her 2017 Star Women in Grocery Award! Passionate about food, Mary has contributed great leadership and innovation to the grocery industry for more than 40 years. Spanning the functions of banner operations, private label, merchandising, commercial programs and new store concepts, Mary and her team’s focus on the customer experience has helped launch many successful programs for our customers.
Renée Hopfner Director, Community Investment for her 2017 Star Women in Grocery Award! Committed and passionate about our responsibility to give back to the communities we proudly serve, Renée Hopfner drives the mission of the Sobeys Inc. Better Food Fund. Partnering with local communities and national organizations the Community Investment team and our generous employees are helping more Canadians – regardless of income, age or ability – have access to wholesome food, basic cooking skills and nutrition education.
T hank you for your dedication, leadership and innovation in grocery, Mary and Renee!
Niagara-on-the-Lake to focus on her golf game and her family. The executive director of The Grocery Foundation for the past six years, Scott has made invaluable contributions to the Foundation’s mission of reducing childhood hunger. Not only has she overseen improvements to the breakfast voucher program and the annual Night to Nurture gala, but this year she took the Toonies for Tummies program national. Prior to her foundation work, Scott spent 11 years with Canadian Council of Grocery Distributors where she enhanced both national and regional conferences, as well as the Canadian Grand Prix New Product Awards program. Commenting on her retirement, Longo’s president and CEO Anthony Longo called Scott a true friend of the grocery industry. “I joined The Grocery Foundation to give back to an industry that has been so good to me and my family,” says Scott. “I look forward to watching this organization continue to evolve to the benefit of our most valuable resource—our children.”
transition process in the shift from using a third-party warehouse in Quebec to an in-house location in Ontario. By reducing transportation time, Metro is able to replenish products several hours faster in some markets, ensuring customers can find the items they’re seeking. Overseeing a staff of 25, Skinner provides a supportive leadership model. “My leadership style is fuelled by my passion for the grocery business with a strong focus on our end goal of customer satisfaction,” she says.
“By looking at the data, you can improve the decisions you’re making,” she says. Following a stint at Air Miles, she arrived at Metro in 2010 as a senior director of loyalty, just as the Metro & Moi loyalty program was getting off the ground. Voizard was instrumental in building that program’s incredible success; today, more than half of Quebec households are Metro & Moi members. For Voizard, customer data not only leads to great promotional programs but to great business strategy. She’s imparted this philosophy to senior leaders across the company who have boosted their use of customer data to shape everything from merchandising to real estate and operations.
Natalie Voizard Senior Director, Customer Experience
METRO Natalie Voizard is a leading executive who uses customer data to improve the in-store experience at Metro in Quebec. Interestingly, Voizard’s career started not in grocery, but in publishing. The first woman to be named circulation director for Reader’s Digest Canada in the mid ’90s, Voizard saw the enormous potential of database marketing.
Cathy Weiss Store Manager
SAVE-ON-FOODS THICKWOOD Cathy Weiss is known for an approachable style of management and a commitment to her team. This was never more evident than when much of Fort
Shannon Skinner Director, Business and Store Services
METRO ONTARIO Shannon Skinner has deftly led Metro Ontario through large-scale technical transitions and improvements that have increased efficiencies across the company. In 2016, when the province granted retailers licences to sell beer and wine, Skinner oversaw the successful implementation of the merchandising and operations processes for sales in this new category. This year, she headed up the data management system for regionalization programs, which brings customers more local food in store. She was also behind the
I like to think of myself as a director and not a manager. I make sure everyone has the knowledge and tools to run their departments like their own businesses, and I’m there to help pull everything together.” — Rebecca McKeen, Owner/Executive Director, McKeen Metro Glebe July/August 2017 Canadian Grocer
McMurray, Alta., was devastated by a wildfire in May 2016. As manager of Save-on-Foods Downtown Fort McMurray, Weiss made sure her employees were safe and informed throughout the store shutdown and evacuation of the city. She was constantly in touch with displaced staff to offer news about the state of the store and the community. When the evacuation order was lifted, Weiss helped put together thousands of food hampers for people in need. With the downtown store closed for renovations, Weiss moved over to Save-On-Foods Thickwood as store manager. She makes it a priority to engage employees through activities such as staff events outside of work and making lunch for employees every week. “I think my biggest strength is that I listen, encourage and empower everyone,” she says. “I want to see everyone succeed.”
Melinda Zoccoli Associate Director, LCL Companies UNITED NATURAL FOODS INCORPORATED UNFI’s Melinda Zoccoli is celebrating her recent promotion to associate director of the organic and natural food distributor’s business with Loblaw. Her earlier success with another retailer,
Metro, has likely contributed to her advancement at UNFI. Despite having a preferred vendor agreement with another supplier, Zoccoli became an advisor to Metro’s key decision-makers, providing advice, insights and planograms during an expansion of its natural and organics offering. “They trusted my knowledge about what was on trend and how consumers were shopping for naturals and organics,” she says. Her good work meant significant new business for UNFI: sales to Metro rose by 14.9% in 2015 and another 11.1% in 2016 after the expansion. Zoccoli’s ability to be direct without alienating those around her combined with deep knowledge, experience and expertise in naturals and organics have earned her the respect of both colleagues and clients. “I’m able to gain the trust of a customer so that we can quickly begin working together in mutually beneficial ways.” CG
QUALITY PRODUCTS COME FROM QUALITY PEOPLE.
CONGRATULATIONS BARBARA ANN ON YOUR LEADERSHIP, PASSION AND DEDICATION.
Congratulations to Cathy Weiss for her innovation and inﬂuence, and for the outstanding leadership she demonstrated to the community and to our team during the Fort McMurray wildﬁre. Congratulations to all the winners of the 2017 Star Women in Grocery Award.
Loblaw would like to congratulate Elaine Lukowski on being awarded the Star Women in Grocery award for 2017.
For 125 years, Del Monte has stood as the freshest name in fruit. After all, we’re fruit fanatics. Especially fresh cut fruit. That’s why we’re also supply-chain fanatics, cutting locally to maximize freshness and extend shelf life. It’s why we’re quality fanatics and food-safety fanatics. Any way you slice it, Del Monte keeps fresh cut fresh.
FRUITFANATICS.COM ©2017 Del Monte Fresh Produce N.A., Inc.
Stroll more Aisles: 47 The rise of alternative milks 48 New products to keep customers going 48 The state of cold beverage sales
AISLES Products, store ops, customers, trends
Nutritious portable snacks
SHAKEUP IN THE SNACK AISLE Consumers are ditching chips and chocolate for healthier snacks on the go By Rosalind Stefanac
THE WAY WE EAT IS CHANGING: that fewer and fewer of us are sitting down for three square meals a day is the new reality. Itâ€™s no surprise, then, that global spending on snacks has increased by 2% year over year, according to Nielsen, and that 45% of consumers are eating snacks as a meal replacement. A 2015 report from Mintel, Snacking Motivations and Attitudes U.S., notes that half of adults snack two to three times per day and 33% of snackers said theyâ€™re choosing healthier options than they did the year prior. In Canada, Mintel notes that we have the highest per capita consumption of snack bars (including granola, performance, cereal and meal replacement bars) in the world. Its most recent Canadian report (June 2017) shows 46% of consumers think snack bars are better than chocolate bars, and while nuts, chocolate and berries top the list of preferred ingredients, 30% say superfoods (such as quinoa) are appealing, too. Protein is a key consideration for 18- to 34-year-olds, while fibre is the bigger ask for the 55-plus set. July/August 2017 Canadian Grocer
AISLES Nutritious portable snacks
SNACKS TO SAVOUR!
HANDFUEL VITALIZER Hazelnuts, dried fruit, sunflower seeds and gluten-free grains are mixed together to deliver a snack jam-packed with nutrients and vitamins.
THREE FARMERS PEA POPS Three Farmers wants snackers to “ditch the chips and grab the pea pops.” Available in three bold flavours, Wild Ranch, Dill Pickle Pow and Sriracha Slap, these snacks are both nutritious and delicious.
DEL MONTE SMOOTHIE KIT These cool kits take the prep out of smoothie making. Just add liquid and ice to the cut fruit and veggies and blend. The kit includes a convenient portable cup.
July/August 2017 Canadian Grocer
“We’re also seeing consumers, especially millennials, putting a high value on portability,” says Joel Gregoire, senior food and drink analyst at Mintel. “They’re looking for nutritious snacks that give them energy and fill the gap between meals.” Manufacturers are taking note. “The growing consumer demand for convenience and healthy portable products has been a major factor in the development of our newest product lines,” says Dionysios Christou, VP marketing, Del Monte Fresh Produce. The company’s Fresh Cut Grab-N-Go fruit and vegetable line comes in non-spill, resealable containers that fit conveniently into a car cup holder. There’s also a new range of on-the-go, preservative-free Smoothie Kits with flavours such as Super Fruit, ‘C’ Your Vitamins and Antioxidant. Since the mixtures are pre-measured, consumers simply add their favourite beverage, or ice, and blend. “The demand for fresh portable food items continues to surge as on-the-go consumers become more aware of their health and the types of quick, healthy options available to them,” says Christou. With the health-conscious, busy millennial in mind, new Toronto-based company Handfuel launched a line of grab-and-go, gluten-free trail mixes last year. The snacks are made with premium ingredients and are big on flavour. The Vitalizer, for example, contains hazelnuts, dried fruit, gluten-free grains and sunflower seeds. The products come in 190-gram resealable pouches and will soon be available in 40-gram single-serve options as well. “We did test marketing to figure out what we could do that was different and realized people want clean food that they feel good about putting into their bodies,” says company founder Cole Richman, noting that all flavour combinations for Handfuel products were designed by a health and wellness chef. “The millennials are a big part of our customer base, but we’re also targeting parents looking for healthy, on-the-go snacks for their kids,” he says. Targeting the health-conscious parent, Naturipe Farms offers triple-washed single-serve blueberry and blueberry/ grape snack packs to add to a lunch box or to take to the office. Dole offers fresh strawberries in the same format.
With the boundaries between snacks and meals shifting, analysts say we’ll see a foray into some pretty innovative snack territory in the future. “We’re seeing a real blurring of lines in terms of the range of products for snacks and I expect that trend to intensify,” says Frank Jiang, Euromonitor’s Canadian research analyst. “The younger demographic wants variety, innovation and unconventional flavours.” Jiang says that, given the rising popularity of ethnic foods, we can expect to see more savoury flavours cropping up in snack bars, and even in yogurt. “In the next few years, we may see sesame seeds and olive oil in a wider range of snack food, too,” he says, adding that he expects even more superfoods (Ancient grains, chia etc.) to appear in yogurts as well. “We’re definitely going to see a crossover of flavours.” Saskatchewan-based Three Farmers is already proving that forecast accurate by turning high-fibre chickpeas into addictive crunchy snacks that aim to give traditional potato chips some stiff competition. The products come in trendy flavours such as sea salt and lime, barbecue, and balsamic and cracked pepper. “We launched our chickpeas three years ago with great success,” says Elysia Vandenhurk, co-owner, chief operating officer and trained Red Seal chef. “Most people know hummus and that it’s made of chickpeas so they’re willing to try it as a healthy snack. But what really captures them is that Saskatchewan grows 80% of Canada’s chickpeas and that it’s one of our top exports.” Last fall, the company added green peas to the lineup with the launch of Pea Pops. Vandenhurk says there are even more legume-based snacks in the pipeline. “We’re looking at other crops we grow in Saskatchewan because we feel it’s innovative and on trend with healthy snacking,” she says. “I don’t think this trend has hit its peak yet.” While millennials are the target market expected to drive healthy portable snacking over the next few years, analysts warn that manufacturers and retailers shouldn’t neglect the boomers, either. “Canada has an aging population,” says Mintel’s Gregoire. “One of the challenges will be finding ways to make snacks that are appealing to them, too.”
AISLES Alternative milks
IT’S ALL IN THE LABEL Non-dairy milk alternatives are becoming more popular at North American grocery stores. But their rise in status has stirred up some controversy
By Laura Pratt
THESE DAYS, YOU’LL FIND a lot of “milks” to choose from at the grocery store. While some non-dairy alternatives such as soy, rice and almond beverages have been around for 20 years or longer, there’s been a recent profusion of new products including cashew, hemp, macadamia nut, quinoa, oat, flaxseed, pecan and coconut “milks.” According to Nielsen, sales of soy, rice and alternative milks increased by 5% in Canada in 2017. Market research firm The NPD Group reports that consumption of dairy alternatives grew to 21 annual eatings per capita in 2016, up from 19 in 2013, while Statistics Canada reported that, from 1996 to 2015, the per capita consumption of cow’s milk decreased by more than 21%. At Summerhill Market, a premium grocer in midtown Toronto, non-dairy alternative beverages occupy a fifth of the 15 metres devoted to dairy products, having expanded by 25% since 2015. Owner Christy McMullen says the quality and taste of the products have vastly improved. “Almond milk is the bestseller and pea milk is the up-and-comer,” says McMullen. “The
category’s also growing with the addition of almond milk creamers and more flavours like dark chocolate.” Some consumers turn to plant-based beverages because they follow a vegan lifestyle; some because they’re unhappy with industrial dairy farming practices; and some are allergic to, or have an intolerance to, cow’s milk. Then there are the health benefits: unsweetened almond milk, for instance, is low in calories and naturally rich in vitamins and minerals, while pea milk comes in at eight grams of protein per serving, and has 50% more calcium than dairy milk. Millennials are also big consumers of non-dairy milks, says Greg Steltenpohl, CEO of Califia Farms, a producer of almond milk beverages. “Millennials are on a quest for great-tasting, clean-label beverages that contribute to wellness and are good for the planet,” he says. “There’s a lot of innovation in the category,” agrees Michele L. Silbey, senior marketing manager at Nutpods, a Seattle-based manufacturer of dairyfree creamer. “There’s been growth in the types of milks available, including cashew, pea protein and combinations
of nuts.” She adds that “barista blends,” milks that work well for specialty drinks, are also growing. Ryan Dennis, director of communications at health food grocer Nature’s Emporium, notes that some consumers are simply looking for the next trend. “It’s a movement of curiosity; a social currency,” he says. “Food’s a part of that.” Each of Nature’s Emporium’s three stores devotes at least six metres to alternative milk products. Some factions of the U.S. dairy industry have taken issue with the rise of non-dairy milks. Chris Galen, senior vice-president of communications for Arlington, Va.-based National Milk Producers Federation says U.S. dairy farmers are upset because of alternative milk producers’ presumed appropriation of a legacy product and label. After spending decades cultivating cow’s milk’s reputation for being a consistent, wholesome and nutritious milk product, some believe non-dairy milks should not be labelled as “milk” at all. In January, the Dairy Pride Act, a bill that aims to remove the word “milk” from the labels of plant-based beverages, was introduced in the House and the Senate. If passed, it will compel the U.S. Food and Drug Administration to enforce the legal definition of milk as the “lacteal secretion” obtained by the “milking of one or more healthy cows.” For their part, makers of non-dairy milks call this conflict nonsense, stirred up to detract from the dairy industry’s current struggles. “The [U.S.] milk lobby seems to want to point fingers at the plant-based milk industry as being the source of their problems,” says Michele Simon, executive director of San Francisco-based Plant Based Foods Association. “Our reaction to that is that there’s room in the marketplace for everyone.” In Canada, it’s a non-issue; alternative non-dairy beverages cannot be labelled “milk.” The government’s Food and Drug Regulations states that milk “comes from the lacteal secretion obtained from the mammary gland of a cow.” Grocers continue to respond to consumers’ ever-changing preferences, and for that reason, the non-dairy beverages category—no matter the words on the label—is poised for continued growth in the North American market. CG July/August 2017 Canadian Grocer
AISLES Cold beverages
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Grab a cold one! JUDGING BY HOW MUCH MONEY THEY SPEND on cold beverages, Canadians sure are a thirsty bunch. And they’ve got plenty of options for quenching that thirst. Take a look at this data from Nielsen to see how categories like carbonated water, energy drinks and flavoured soft drinks are performing.
Cold beverage sales in Canada 52 weeks to April 29, 2017
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Latest 52 Weeks, ending April 29, 2017
$ Sales (000’s)
$ Vol % Chg
Units Vol % Chg
1 CARBONATED WATER
CARBONATED WATER - FLAVOURED
CARBONATED WATER - NON-FLAVOURED
2 CORDIALS & SYRUPS
DRINK POWDERS & LIQUIDS - COLD
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FLAT WATER - FLAVOURED
FLAT WATER - FORTIFIED
FLAT WATER - REGULAR
FLAVOURED DRINK MIXES
3 FLAVOURED SOFT DRINKS
FLAVOURED SOFT DRINKS - DIET
FLAVOURED SOFT DRINKS - REGULAR
ICED TEA MIXES
JUICES & DRINKS - SHELF STABLE
LEMON & LIME JUICE
LOW ALCOHOL BEVERAGES - CIDER
Summer Fresh Snack’n Go Salads
LOW ALCOHOL BEVERAGES - MALT BEVERAGES
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LOW ALCOHOL BEVERAGES - OTHER LOW ALCOHOL BEVERAGES
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RTD ICED TEA CANS
RTD ICED TEA CANS - FLAVOUR - OTHER FLAVOURS
RTD ICED TEA CANS - FLAVOUR - WITH LEMON
RTD ICED TEA CANS - FLAVOUR - WITH PEACH
RTD ICED TEA CANS - FLAVOUR - WITH RASPBERRY
1. Fizzy water rules. Carbonated water is experiencing double-digit growth in both dollar sales and units.
2. Canadians are keeping it cordial. Sales of cordials and syrups are up 31% in dollars and 23% in units.
3. Flavoured soft drinks fall flat. Whether diet or regular, it’s same old, same old for this category.
4. Cheers to low-alcohol beverages! Dollar sales in the category are up 24%, while units are up 18%.
SOURCE: NIELSEN, NATIONAL, ALL CHANNELS, ALL SALES, EXCLUDING N.L.
July/August 2017 Canadian Grocer
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SIAL STANDOUTS Thousands of products were on display at SIAL Canada, including these noteworthy Canadian goods TOUTED AS NORTH AMERICA’S largest food innovation trade show, this year’s edition of SIAL Canada featured a record number of exhibitors (more than 1,000) from 50 countries. With thousands of items on the trade-show floor, product themes ran the gamut from convenience to health to free-from to indulgence. Among the Canadian goods, I was surprised to find two that I think are unique in our country. One was a dried Atlantic Sea Cucumber product from Hackett’s Cove, N.S. Sea cucumber, a marine animal found on the sea floor, has been a delicacy in China for hundreds of years. Recently, it’s gained popularity in North America for its taste, supposed medicinal properties and versatility in recipes.
July/August 2017 Canadian Grocer
The second unique product was a retail pack of Yorkshire pudding from Childs Foods of Saint John, N.B. I’ve seen similar packs of Yorkshire pudding in Europe but this was my first sighting of an allCanadian product. Ever yone knows Yorkshire pudding is traditionally served with roast beef, but Childs suggests the puddings also go well with chicken, pork and duck, and are a great accompaniment to soups and chowders. A Canadian product that I am convinced is unique in the world is Salted Caramel Whiskey Dessert Sauce from Gourmet Inspirations of Winnipeg. The company suggests drizzling it on cheesecake, ice cream and chocolate cake. Gourmet Inspirations also has a line of fascinating finishing sauces including Creamy Peppercorn
HELD THIS YEAR IN TORONTO, SIAL CANADA IS NORTH AMERICA’S LARGEST FOOD INNOVATION TRADE SHOW George Condon is Canadian Grocer’s consulting editor. He’s based in Toronto. email@example.com
Whiskey, Sweet and Spicy Lemon and Chocolate Port. They are to be heated, then served, and are made from all-natural ingredients with no preservatives. For those interested in alternatives to potato chips, look no further than Three Farmers and Left Field Foods. Hailing from Saskatchewan, Three Farmers has a line of crunchy, roasted chickpeas called Pea Pops in flavours such as Dill Pickle Pow, Sriracha Slap and Wild Ranch. More traditional “chip” flavours such as sea salt and lime and barbecue are packaged in larger format bags. The products are nut free, gluten free and are a source of fibre, potassium and iron. Three Farmers also manufactures Camelina oil, which has Omega 3 and Omega 6, a high smoke point, and is perfect for dips, dressing and marinades. C a l g a r y ’s L e f t F i e l d F o o d s also impressed with its line of air-puffed potato snacks called Spokes. They are not fried, have no preservatives or GMOs, are gluten free and are made in a peanut-free facility. Also free of trans fat, cholesterol, soy and dairy, Spokes come in flavours such as barbecue, mango habanero, sea salted caramel, salt and vinegar, dill pickle and plain. The last brand that caught my eye is Kookie Kutter. The Sackville, N.B., manufacturer makes products from three popular bakery chefs: Mrs. MacGregor’s Shortbreads, originally from Pictou, N.S.; Mrs. P’s old fashioned oakcakes from Halifax; and Kookie Kutter’s own ginger snaps, chocolate chip snaps, and cinnamon & honey snaps. This brand is a virtual one-stop shop for bakery snacks. With thousands of products to see, what a pleasant surprise that it was Canadian goods that hooked my curiosity and grabbed my attention the most. CG
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