Canadian Grocer - November 2018

The secret’s in the sauce

A step inside Marché The big new world Adonis, Gatineau of payments

NOVEMBER 2018

GoldStars MEET THE 2018 GOLDEN PENCIL WINNERS: Tom Gunter and Mary Dalimonte

Congratulations Mary Dalimonte and Tom Gunter on your 2018 Golden Pencil Award!

from your friends at

CONTENTS November 2018 Volume 132 Number 7

COVER STORY

GOLD STARS

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OPINIONS

Meet the winners of this year’s Golden Pencil Awards: Mary Dalimonte and Tom Gunter

05 Front Desk 16 Shopper Sense 62 Checking Out PEOPLE

06 The Buzz

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

08 Evan Fraser

The Arrell Food Institute’s director is working to better the world’s food systems

FEATURES

IDEAS

11 Going to pot

AMAZING MARCHÉ ADONIS

Cannabis legalization is raising HR questions for Canada’s grocers

13 Global grocery

22 Step inside the growing

News and ideas from the world of food retailing

banner’s newest location in Gatineau, Que.

14 Longo’s net-zero supermarket

THE PAYMENTS REVOLUTION

The Ontario grocer’s new Stouffville store sets an example for energy efficiency

TECH

34 How to stay on top of

41 Look ma, no driver!

the rapidly evolving trends in payment technology

22

Autonomous delivery is making inroads in the grocery space

AISLES

55 The secret’s in the sauce Consumers are gobbling up innovative, ready-made cooking sauces

58 Sweet dreams are made of cheese

Six ways to make your specialty cheese sales soar

60 Get it while it’s hot

Nielsen data reveals the hot trends in hot beverage sales

61 Milk’s makeover

COVER IMAGE: MIKE FORD

Check out some of the premium milks hitting the market

FOLLOW US ON

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@CanadianGrocer Canadian Grocer Magazine @CanadianGrocerMagazine November 2018 Canadian Grocer

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Canada’s Favourite

Peanut Butter

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FRONT DESK

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MARKETING DIRECTOR Alexandra Voulu

Innovation was everywhere at the SIAL Paris exhibition

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FEEDING THE FUTURE

At SIAL Paris, we saw how innovation is being used to help tackle some of our big challenges WHAT WILL IT TAKE to feed the world’s population—estimated to swell to 8.6 billion by 2030—and help reduce our impact on the planet’s resources? It will take innovation— lots of it. That was one of the takeaways from the SIAL exhibition in Paris recently.

An interesting new feature at this year’s show, touted as “the world’s largest food innovation exhibition,” was the Future Lab: an immersive space dedicated to looking at the future of food through video, VR and new product innovation. The “Lab” raised questions such as what will be the cuisine of the future? And if large-scale farming of animals isn’t the answer, could alternatives like micro-algae or synthetic meat be the solution for feeding future populations?

The Lab also provided a space for a select group of startups to present their innovations. These included products made from unexploited yet sustainable ingredients like lupins from U.K. company Blooming Food, which turned the pulses into chips. To help tackle our plastic habit, Spanish startup Sorbos was pitching its fruit-flavoured edible straws (made from cornstarch and sugar).

Meaningful innovation was not limited to the Future Lab; it could be found in every corner of the sprawling show. Upcycled foods (products made from ingredients that would otherwise be tossed out as waste) were on display, as were products packed in eco-friendly materials such as frozen veggies in a biodegradeable paper-based bag.

Although these are small steps towards helping tackle our big issues, these innovative companies are certainly inspiring. We need to see more of them!

While we’re on the subject, be sure to check out our story on Evan Fraser, professor at the University of Guelph and director of the Arrell Food Institute (page 8). See how he’s also working to better our food future by making our systems safer, more sustainable and economically viable.

Happy reading!

Shellee Fitzgerald

Editor-in-Chief

sfitzgerald@ensembleiq.com

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November 2018 Canadian Grocer

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THE BUZZ

The latest news in the grocery biz

OPENINGS

Toronto’s Liberty Village neighbourhood is home to a new Organic Garage. The store, the fourth location for the independent grocer, opened its doors on Oct. 10. Among the 13,000-sq-ft. Liberty Village location’s features are a sustainable sushi take-out bar from Cali-Rolls, a fresh juice bar from Thrive Energy Lab, a kefir bar from deKEFIR as well as an 11-tap draft station for kombucha, cold-brewed coffee and other specialty beverages.

At one of its Toronto locations, RABBA FINE FOODS is piloting a new store concept that puts a greater emphasis on fresh produce and ready-to-go foods. The 6,000-sq.-ft. European-inspired market concept includes a new layout and lighting as well as wider aisles. Rabba, which operates 34 stores in the Greater Toronto Area, says it plans to eventually roll out the concept to all of its locations.

ANNOUNCEMENTS

Goodness Me! is opening its 10th store in Cambridge, Ont. in November. The natural food retailer also has locations in Mississauga, Hamilton, Waterloo, Burlington, Barrie, Brantford, Guelph and Waterdown. Earlier this year, Goodness Me! announced it had plans to open four more stores in the Greater Toronto Area and Southern Ontario.

DEALS

Empire Co., parent to Sobeys, announced in late September that it is acquiring Farm Boy, which operates 26 locations in Ontario. The deal, which values Farm Boy at $800 million, will strengthen Empire’s reach in Ontario and accelerate Farm Boy’s expansion in the province. Days after the acquisition was announced, Farm Boy revealed the opening of its second Toronto location this winter in the city’s Lakeshore and Leslie area. Farm Boy is also set to open a new store in Oakville, just west of Toronto, this fall.

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November 2018 Canadian Grocer

GIANT TIGER has opened a new 600,000sq.-ft. distribution centre just south of Ottawa. Dave Burnside, the company’s executive vice-president and chief purchasing officer, grocery, told Canadian Grocer the new facility will help Giant Tiger address gaps in its grocery offering, enabling it to boost its number of grocery SKUs (currently about 2,800) by as much as 10%. Giant Tiger has been aggressively expanding over the past few years and currently operates 245 stores in Canada.

VINCE’S MARKET debuted its fifth location at Newmarket, Ont.’s Upper Canada Mall in September. The small-footprint store, at just 1,100 square feet, is part of Oxford Properties’ new, 40,000-sq.-ft. food hall concept Market & Co., which also houses chains such as Sweet Jesus ice cream, Union Chicken restaurant and Village Juicery. Vince’s Market partner Giancarlo Trimarchi says the micro-store, with its emphasis on seasonal produce and prepared foods, showcases the “best of who we are.”

FARM BOY

At the new Organic Garage, customers can get their kombucha and cold brew coffee fix at an 11-tap draft station

THE BUZZ

COMINGS AND GOINGS THOMAS A. BARLOW, president and CEO of the Canadian Federation of Independent Grocers (CFIG), has announced he is retiring at the end of November. Barlow has held the top job at CFIG since 2013.

THOMAS SHURRIE, who joined CFIG in 2017 as senior vicepresident and COO, will step into the role of president and CEO in early December.

AWARDS

JOHN GOLDSTEIN, MARKET & CO., METRO

Canadian Grocer celebrated the 2018 STAR WOMEN IN GROCERY winners at a ceremony on Sept. 25 in Toronto. The winners (L to R): Tebbie Chuchla, Conagra Brands; Julie Bednarksi, The Healthy Crunch Company; Tammy MacPhee, Sobeys; Sierra Johnston, Save-On-Foods; Nicole Bleiwas, formerly of Flipp Corp.; Melissa Pryszlak, Metro Ontario; Lynn Caiger, Unilever Canada; Lyne Castonguay, Sobeys; Julie Sirois, PepsiCo Foods Canada; Josianne Légaré, A. Lassonde; Janet Jacks, Goodness Me! Natural Food Market; Jacqueline Craig, Save-On-Foods; Dana Somerville, Kraft Heinz Canada; Cynthia Beretta, Beretta Farms; Chris Yu, Galleria Supermarket; Cheryl Smith, Parmalat Canada; Caroline Nadeau, Coca-Cola Canada; Alicia Samuel, Longo’s. Not pictured: Annette Woodhead, Blind Bay Village Grocer.

Members of Groupe Messier (pictured here with Metro execs) won two of Metro’s 2018 Customer Devotion Awards

METRO recently presented its Customer Devotion awards, which recognize outstanding performance by Quebec grocers. Four winners received this year’s award: Yannick Lefebvre, franchisee-owner of Metro Plus Jonquière; Marie-Josée Bernard, franchisee-owner of Metro Morgan Ste-Catherine; and two awards were given to the members of Groupe Messier, owners of Metro Plus Messier Mascouche and Metro Messier Fort-St-Louis Boucherville.

The Retail Council of Canada has awarded DON BEREZOWSKI its 2018 Retail Secure Life­time Achievement Award for contributions to retail loss prevention. Berezowski is Walmart Canada’s director, environmental health and safety.

Thomas A. Barlow

Candace Woods

Nina Barton

BJ Hamilton

Dave Iacobelli

Metro has announced that CANDACE WOODS is its new director of marketing for Food Basics and Pharmacy. Woods has more than 20 years of marketing experience including at Nestlé Canada.

NINA BARTON has been named president of Kraft Heinz Canada, effective Jan. 1. Barton is currently president of global digital online growth at Kraft Heinz in Chicago. She will continue her global duties.

Barton replaces CARLOS PIANI, who will become head of strategic initiatives and mergers & acquisitions for Kraft Heinz.

BJ HAMILTON has stepped into the role of vice-president of sales at Ferrero Canada.

Hamilton, who was previously senior sales director, national accounts at the confectionery company, replaces FABIO ROMANO, who has headed to the U.S. to work on the company’s North American business.

DAVE IACOBELLI is the new general manager/president of Clorox Canada. Previously, Iacobelli was the vice-president, Canada and international sales at the company. Iacobelli replaces MIKE PILATO who left Clorox to take on the role of president, health food at Jamieson Wellness.

Mike Pilato November 2018 Canadian Grocer

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PEOPLE

Who you need to know

The Facts Who

Evan Fraser Position

Professor at the University of Guelph; director of the Arrell Food Institute; Canada Research Chair in global food security

FOOD FIGHTER

Professor Evan Fraser is working to better the world’s food systems

By Carol Neshevich Photography by Dan Bannister

PEOPLE

30 SECONDS WITH...

T

he “standout moment” that helped shape the way Evan Fraser thinks about food came on a hot July day when he was in his late teens, working on his grandfather’s fruit farm in Ontario’s Niagara region.

He’d been on his hands and knees pulling weeds all day when his grandmother, who was doing quite well in her second career as an investment advisor, pulled up in her Lincoln Town Car. “The window rolled down, and there was that little puff of air-conditioned air,” recalls Fraser, noting the contrast to the heat he was contending with weeding the strawberry patch. “Gran and I conversed and I discovered that she had probably made more money in just that afternoon on commissions from her clients’ investments than I was going to make all summer [working on the fruit farm].” At the same time, this was a summer when California cherry imports were selling for cheaper than it would cost local farmers to hire students to pick the cherries. As a result, many Ontario farmers weren’t even bothering to harvest their cherry crops.

From that episode, Fraser came to a few conclusions. “One, I didn’t want to take on the family farm, because frankly it’s easier to write and talk about farming than it is to try to make a go of it,” he laughs. “And secondly, the world is so full of these weird contradictions in our food systems, and it was a giant puzzle to try to think about these challenges and, ultimately, think about whether there were better ways of managing the world’s food production and nutrition than we were currently doing.”

Today, Fraser spends his days trying to figure out those “better ways.” After earning a BA in anthropology and an MA in forestry at the University of Toronto, he went on to get his PhD in resource management and environmental studies at the University of British Columbia.

He became a professor at the University of Guelph in 2010, where he currently holds the Tier 1 Canada Research Chair in global food security.

Fraser is also the director of the University of Guelph’s Arrell Food Institute, which was established in 2017. As Fraser explains, “The vision of the institute is to help promote a world where we move towards greater amounts of equity, safety, nutrition and sustainability in our food system, while still maintaining profitability and economic viability. That’s the ‘big’ mission.” But on a local level, he says, the institute also strives to keep Canada at the forefront of these discussions. This is particularly true when it comes to transformative technology like data analytics and artificial intelligence, he says. “Whether we like it or not, there is a digital revolution coming in the food business. Someone is going to be the leader in this, so why not Canada?”

Fraser stresses that partnerships— whether with government, industry, or other units at the university—are an important cornerstone of the institute’s work, “because we’re never going to solve all these problems in silos.”

The institute, for example, is currently involved in research on biodegradable food packaging, a project being led by the Bioproducts Discovery and Development Centre at the University of Guelph.

Not one to stick to the ivory tower of academia, Fraser also sits on the board of Maple Leaf Foods’ Centre for Action on Food Security, and is a scientific advisor on George Weston Ltd.’s Seeding Food Innovation fund. And for the last couple of years he’s been part of the Loblaw Food Council, a diverse group of Canadian chefs, registered dietitians, academics and other food experts who come together to predict food trends for the coming year.

Overall, Fraser is optimistic about the sustainable future of our food systems. “One of the big challenges facing humanity over the next hundred years is how to sustainably, equitably and nutritiously feed us all. I believe we’ll get there,” he says. “We have a ringside seat to one of the great transformations. It’s exciting. We’ve all got a part to play, and it’s not going to be easy, but it’s what we need to do.” CG

EVAN FRASER What are some of the most important trends in the food world today?

Well, there’s digitization … the application of sensors, data analytics and artificial intelligence to all aspects of the production-­ to-consumption continuum is a really big trend. Also, I predict—and I say this with great respect to my friends in the livestock industry—­ that the way we produce and consume protein is on the cusp of some really big changes. And managing that transition is going to be a big issue: how consumers, the processing and production sector, and the regulatory sector are going to react to [these changes] is totally uncertain, but change is definitely upon us.

What do you like best about your job?

I’ve got a lot of favourite parts, it’s a long list—but if I’m forced to choose one thing, I would probably say working with students is my favourite part of it all.

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

Mostly family-related stuff. I’m a scout leader, so I spend a lot of time camping with my son and the scouts, and I’ve done that for a long time. I go mountain biking with one of my daughters, and play a lot of games with my other daughter. And, of course, there’s lots of cooking and cleaning on the weekends, normal family things.

What’s your favourite food?

I’d probably go with freshly picked sweet corn and strawberries from Niagara, Ont. I have to go with my heritage here!

November 2018 Canadian Grocer

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© 2018 Penske. All Rights Reserved.

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IDEAS

Retailers, suppliers, shoppers, insights

RECREATIONAL CANNABIS

SHUTTERSTOCK/TUNATURA

Weed and the workplace Cannabis legalization: a cause for concern and confusion at workplaces

By Chris Powell

A

lthough recreational cannabis use is now legal in Canada, grocers are still trying to determine if even one toke is over the line when it comes to workplace use.

Canada became the first G7 nation to legalize recreational cannabis use on Oct. 17, making it the only drug approved for both recreational and medicinal use.

Yet, a recent Ipsos study suggests there’s a sizeable gap between management and employee perceptions of the policies governing its use in the workplace.

Nearly two-thirds (65%) of working Canadians surveyed by Ipsos said clear expectations around the use of cannabis in the workplace have not been adequately communicated by their employer.

That said, 55% of managers believe their employees clearly understand management’s expectations, with only 21% saying their employees do not.

Meanwhile, a pre-legalization report from the Conference Board of Canada found more than half (52%) of all organizations are either concerned or November 2018 Canadian Grocer

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IDEAS very concerned about the legalization of cannabis as it pertains to the workplace, expressing reservations about everything from workplace safety to impairment during working hours.

While many employers are “well on their way” to formalizing policies around cannabis use, others still “have a bit of work to do,” says Allison Cowan, director of total rewards, HR and labour relations research at the Conference Board of Canada in Ottawa.

Cowan predicts workplace issues surrounding legalization will be a learning process for employers, particularly as it pertains to safety. “You don’t really know what you don’t know,” she says. “There are all sorts of things that create safety incidents in work environments that people don’t always think about.”

Grocers contacted by Canadian Grocer indicated they are updating—or have already updated—their employee policies in the wake of cannabis legalization.

“Yes, we have updated our policy regarding alcohol and drugs in the workplace to reflect the changes in legislation,” said Catherine Thomas, senior director of external communication for Loblaw, in an e-mail statement. “It outlines our policy that colleagues are not allowed to consume recreational cannabis or alcohol at work or prior to work.”

Jennifer McCrindle, Sobeys’ manager, external communications, says the company has updated its alcohol and drug policy, but expects legalization will

have “little impact” on its operations.

According to McCrindle, the policy is built around the principle that its 120,000 employees shall be “fit for duty” at all times. That means “being able to perform assigned duties in a safe and productive manner without any limitations due to the use or after-use of alcohol, drugs or medications.”

Neil Kudrinko, owner of Kudrinko’s in Westport, Ont., says cannabis will be treated the same way as alcohol. “[Both] have no place inside the workplace and are strictly prohibited,” he says.

In a recent CanadianGrocer.com poll, 30.6% of respondents indicated they are very concerned about the impact of recreational cannabis use at their workplace, while 16.3% said they’re slightly concerned. However, nearly 45% said they are not at all concerned.

Benjamin Aberant, a partner in the labour and employment group at law firm McCarthy Tétrault in Toronto, says there are several issues for employers stemming from employee cannabis use, but workplace safety is the “foremost” concern.

“Canadian employers are required by occupational health and safety legislations to provide safe workplaces,” he says.

“There is a concern among employers that increased use of cannabis will result in higher incidences of impairment in the workplace.”

Cowan, meanwhile, speculates there could be several areas for concern stemming from cannabis consumption, from

individuals moving shopping carts around in the parking lot, to trucks backing up to the loading dock.

Employees themselves acknowledge legalization will have some impact on the workplace, with 55% of those surveyed by Ipsos believing it will lead to an increase in health and safety incidents, 40% saying it will produce more absenteeism, and 16% saying it will compromise work quality and productivity.

But policies regarding off-duty use, such as Loblaw’s stipulation that employees cannot use cannabis prior to work, remain somewhat murky. “As a general rule, employers cannot usually dictate what an employee does in their off-duty hours,” says Aberant. “The question is whether or not those off-duty activities have any impact on the workplace. Therefore, so long as a person is not actually impaired when they are reporting to work, employers generally cannot control an employee’s off-duty conduct.”

According to the Ipsos study, only 13% of employees say they’re somewhat/ very likely to use cannabis before going to work. That jumps to 26% for afterhours socializing with co-workers.

Theoretically, after-hours use should not impact an employee’s functionality at work. Experts say a cannabis high can last up to six hours, depending on how much is ingested, how it is ingested (smoked or eaten) and tolerance.

The latter, of course, might also be in short supply among employers.

Attack of the healthier snacks

There was lots to see and sample at the CHFA East show, staged in Toronto by the Canadian Health Food Assoc­iation recently, and snacks featured prominently—from bars (so many bars!) to protein balls to veggie crisps.

Among the products grabbing our attention were these snacks, which aim to please a sweet tooth or a meat tooth.

MEATBAR

by Greenspace Brands The makers of Meatbar want to be clear about one thing: this snack is not jerky. Made from seasoned 100% grass-fed beef, Meatbar is slow cooked and contains nothing artificial, plus it’s antibiotic and hormone free.

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COCONUT CHIPS

by Healthy Crunch Famous for its kale chips, Healthy Crunch is veering into coconut territory with this new line of snacks that are made in small batches and come in 14 varieties.

November 2018 Canadian Grocer

GLUTEN FREE BAR

by The GFB

SPICY TOMATO PORK BAR

by Chef’s Cut

The GFB prides itself on making tasty, nutrient-dense bars to please those avoiding gluten and those who aren’t. The bars feature new packaging that includes a cut-out window so consumers can glimpse the product inside.

Chef’s Cut uses 100% premium cuts of pork in its “real meat bars.” Sundried tomatoes, red peppers and parsley have been added to amp up the flavour in this bar that also packs a punch of protein (12 grams per serving).

IDEAS

GLOBAL GROCERY

News and ideas from the world of food retail CASINO’S HIGH-TECH PARIS SUPERMARKET

Le 4 Casino is no ordinary supermarket. The stylish store, located near the ChampsÉlysées in the heart of Paris, is filled with gourmet groceries and exclusive products; what it doesn’t have are cashiers. At the high-tech supermarket, described as Casino Group’s answer to Amazon Go, shoppers can scan and pay for goods via an app or at a self checkout. Other features of the store include a digital “Picking Wall” where shoppers can select a broad range of products for home delivery, and an augmented reality digital display outside of the store that greets passersby.

TALKING TABLES To help tackle the problem of loneliness, U.K. grocer Sainsbury’s is testing a new initiative to encourage more personal interactions in-store. According to the retailer, Talking Tables will be trialled at 20 stores in different formats, ranging from sign-posted tables in its cafés where staff volunteers can chat with customers (and non-customers, too) to more formal scheduled sessions created in partnership with community groups.

Sainsbury’s hopes the initiative will help those battling loneliness build a closer support network within their community.

FRANÇOIS DABURON, SAINSBURY’S, TESCO, CARLSBERG

Coles expands quiet hour As a result of “overwhelmingly positive customer feedback,” Australian grocery chain Coles is expanding its Quiet Hour initiative to 173 of its stores. Last year, the grocer partnered with Autism Spectrum Australia to trial Quiet Hour at two stores, which later expanded to 70 locations. During Quiet Hour lights are dimmed, in-store music is turned off, PA announcements are limited to emergencies and even cash register and scanner volumes are turned down to the lowest levels—all in an effort to offer a low-sensory shopping experience for shoppers on the autism spectrum.

So long, plastic rings!

Danish beer giant Carlsberg has abandoned the plastic rings that formerly held together multi-packs of its brew. Instead, its innovative new Snap Packs use an eco-friendly glue to stick the beverages together that consumers can easily pull apart.

Touted as a world first for the beer industry, Carlsberg says the move will reduce the amount of plastic used in tra­ditional multi-packs by up to 76%.

TESCO DIVES INTO DISCOUNT

To fend off threats by deep discounters like Aldi and Lidl, Tesco has unveiled its own discount banner.

Called Jack’s—a nod to Tesco founder Jack Cohen, who started the business a century ago—the stores will follow a “no fuss” approach, meaning a simplified product range (fewer than 3,000 products on offer versus some 35,000 found in a typical Tesco), no “fancy fixtures or fittings” or extras, just “good quality low prices.” So far, Tesco has opened two Jack’s locations with plans to roll out another 10 to 15 stores across the U.K. over the next six months.

November 2018 Canadian Grocer

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IDEAS

LONGO’S NET-ZERO SUPERMARKET With its energy-reducing innovations, the Ontario store is an example for the rest of the grocery industry By David Brown LONGO’S IS SET TO OPEN a super-efficient 40,000-sq.-ft. supermarket in Stouffville, Ont. in November. The store is being described as “Canada’s first near net-zero supermarket,” meaning it will use 35% less energy than average and produce 65% of its own energy, thanks to leading-edge efficient building design and the incorporation of renewable energy systems and operating technologies.

Some of the energy-reducing innovations include CO2 refrigeration with heat ejectors; a combined cooling, heating and power system; high-efficiency building envelope (the boundary between the interior and exterior of a building); LED lighting; advanced heat recovery; and

solar photovoltaics on the roof, carports, cart corrals and building façade. Longo’s is working with Neelands Group Limited and S2E Technologies Inc. to build the store. (Others contributing to the project include FCML, SNC-Lavalin, Studio Intersekt and Hammerschlag & Joffe.)

Longo’s has long focused on more efficient stores that reduce both greenhouse gas emissions and operating costs, says Dave Mastroieni, vice-president of central procurement and facility management at Longo’s. “Grocery stores are heavy users of energy,” he says. “Any initiative that helps us reduce that is beneficial in the long run.”

The store is estimated to cost more

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than $11 million to build—about 30% more than a typical store—but the Federal Government is contributing about $1.4 million through Natural Resources Canada’s “Energy Innovation Program.”

“Longo’s Stouffville supermarket will demonstrate first-of-its-kind netzero energy solutions, making it one of the most sustainable supermarkets in Canada,” said Jane Philpott, MP for Markham–Stouffville, in a statement.

Ottawa hopes the new store can be an example for the industry of how grocery stores can reduce greenhouse gas emissions and achieve clean and efficient energy consumption. While netzero supermarkets have been attempted in other countries, the challenges are greater in Canada’s extreme climate.

“What is unique [about the Stouffville store] is all the different technologies working together,” explains Mastroieni.

“Because each piece of this technology has been used somewhere in the industry … but nobody has really put everything together in this climate to make it work in unison.”

Mastroieni says the new store will reduce between 1,500 and 2,000 metric tons of greenhouse gas emissions per year—the equivalent of taking 274 to 366 cars off the road annually.

Longo’s will continue to push to get closer to net zero in future stores, looking at innovations like better battery storage, geothermal energy and windmills. It’s also working to reduce energy consumption in existing stores.

Solar panels have been installed at seven stores as well as at head office, and could be added to others, as could more CO2 refrigeration. LED retrofits are also underway. There’s significant upfront capital costs to install the most advanced LED systems, but they help reduce maintenance costs of traditional systems, save energy, and provide a better in-store experience for both customers and employees, says Mastroieni. CG

What’sNew NeW products iN grocery

Ship Shape Charcuterie preparing the perfect charcuterie board has never been so simple! this holiday season, help your customers build a delicious spread of cured meats with piller’s charcuterie trios. available in three varieties, these sliced variety packs feature piller’s signature shaped salamis and specialty meats. Be sure to stock the entire line of charcuterie specialty items to complete your deli offering.

Longing for Leeks in Belgium, the soil is ideal for growing leeks, yielding leeks with dark-green leaves, a straight shape and a ‘white’ stem with a length of at least 15 cm. Leeks are a multifunctional vegetable that consumers can enjoy both hot and cold. encourage them to blanch, stew, or stir-fry, and have leeks be the star of the dish. Belgian leeks are available year round.

The Perfect Catch green ocean seafood has partnered with the icelandic seafood industry for a sustainable line of raw, boneless and skinless frozen fish certified by ocean Wise. this is fish from the purest and most plentiful fishing grounds in the world. Featuring five wild-caught species: cod, haddock, plaice, saithe, and Wolffish — and one land-based farmed species, arctic charr.

With no additives, no preservatives, and inner vacuum packed to preserve quality, green ocean seafood is fish with nothing to hide exactly what consumers are looking for.

Surviving Winter allow consumers to venture off the beaten path this season with Muskoka Brewery. this survival sampler pack includes six one-of-a-kind beers, each as unique and refreshing as the region itself. each pack displays a “Freshest by” date as beer is best consumed when it is fresh. this easy graband-go pack gives consumers the opportunity to discover a new favourite and share with friends. the Muskoka Brewery survival sampler includes: Muskoka cream ale, detour isa, craft Lager, Mad tom ipa, shinnicked stout and brand new hibernating grizzly, an effervescent grisette.

Special promotional feature in Canadian GroCer–noVemBer 2018

SHOPPER SENSE

Carman Allison

DON’T MISS THE E-COMM BOAT It’s not too late to embark on an online strategy, but decisions need to be made now E-COMMERCE IS reshaping the global retail market. Since the turn of the 21st century, online shopping has boomed as internet access and smartphones have quickly become an intrinsic part of life in Canada. While global behemoths are well known, the rise of e-commerce is providing exciting opportunities for companies of all shapes and sizes, from major bricks-and-mortar players through to cottage industries. E-commerce has opened up a whole new shopping world,

reason for the slower uptake of online FMCG has been the logistical challenges associated with ensuring fresh and perishable products arrive to the consumer in top condition, especially in expansive countries like Canada. However, with increasing consumer demand for convenience coupled with better technology, online FMCG growth is accelerating approximately four times faster than offline sales across the globe.

Although a highly unlikely scenario, if the current growth rates for online and offline FMCG remains constant, online sales will exceed those from bricks-and-mortar stores by 2037. There is a greater likelihood of convergence between offline and online commerce with concepts such as click-and-collect and alternative delivery solutions being introduced by businesses. What is becoming increasingly clear is that for most FMCG brands, future success will be determined by how successful they are online.

Most major FMCG players already have e-commerce as a key pillar of their growth strategy and are actively scaling investments to increase their online offerings and geographic coverage.

In doing so, they are rethinking and reshaping brand strategies; however, many are still uncertain what form their strategies should take and how to best execute them to reach consumers. In this evolving space, e-commerce success

For retailers and manu­ facturers in Canada that have yet to embark on their e-commerce journey, future success means making decisions now providing consumers with access to greater assortment and value opportunities while helping to satisfy their increasing demand for convenience.

Today, fast moving consumer goods (FMCG) e-commerce in Canada accounts for about 2.1% of sales; however, by 2020 that number is expected to reach 5.3%.

Globally, e-commerce shows no signs of slowing, and by 2020 it is likely to be worth in excess of $4 trillion worldwide!

Yet despite the global buzz, e-commerce currently contributes less than 7% of the global FMCG market. One key

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November 2018 Canadian Grocer

requires more than simply trying to take offline capabilities online. Companies are setting ambitious financial targets and testing and innovating in the online space; profits can initially be hard to come by, but for most, the eye is on the long-term prize.

For retailers and manufacturers in Canada that have yet to embark on their e-commerce journey, future success means making decisions now. The good news for brands lacking a strong e-commerce presence is that it’s not too late. In Canada, there is still opportunity to ramp up online shopper penetration, as well as the frequency and amount that current online shoppers spend. For nearly all FMCG companies, the question is no longer one of “bricks versus clicks.”

Rather, the formula for winning involves developing an omnichannel strategy.

Regardless of whether FMCG companies are multinational or local, all should be looking to develop omnichannel strategies to sustain and maximize growth in the future. Simply replicating an offline strategy will not suffice; a tailored online approach is essential, including product pictures, clear descriptions and ideal shelf positioning, whether physical or digital— think eye-level in bricks-and-mortar, but think “first page” of online search results.

It involves creating different product portfolios for online platforms as well, which may include a wider range of product sizes and flavours.

Retailers should also look to enhance the scope of their online offerings by expanding in-country coverage for delivery; providing quicker, more convenient delivery options; and offering products that are difficult to find offline. CG

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

IS YOUR MILK

100% CANADIAN

OR

100% AMERICAN?

Proudly providing 100% Canadian milk to Canadian families.

I-D FOODS 70

I-D Foods Corporation,

one of Canada’s largest distributors of specialty foods, is celebrating its 70th anniversary. Achieving enduring success is no easy feat, but I-D Foods has a winning formula: organizational strength, excellence in service, and a true passion for the business. That mission has helped I-D Foods reach a major milestone this year: its 70th anniversary.

Imported Delicacies (the precursor to I-D Foods) was founded in 1948 by Henry Gamer, whose first imported product was Bahlsen biscuits from Germany. Philip Issenman entered the company’s history books when he bought the company in 1971. After studying at Harvard and getting his MBA in Marketing at Columbia University, Issenman was working in mergers and acquisitions for about a year when he came across Imported Delicacies.

“It involved food and travel; all the things I love to do, so I jumped into it,” says Issenman, who serves as chairman and president of I-D Foods.

From the mid-’70s to mid-’80s, Issenman built the business through a number of acquisitions, including Henri Jonas & Co. established in 1870, the specialty food division of

years of excellence Rose & Laflamme, the R.H. Melville Company in Vancouver, and Superior Foods in Winnipeg. In 1977, Issenman changed the company’s name to I-D Foods Corporation.

In 1990, First National Brokerage was founded (now known as First National Sales & Marketing); I-D Foods invested $15 million in the expansion of its warehouse operation in Laval in 2008; and opened a new 70 000 sq. ft. warehouse in Calgary in 2016.

Today, I-D Foods has 275 employees, and more than 60 brands in its portfolio.

Tantrum, distributor of Red Bull energy drink in Quebec in the family of I-D Foods companies, employs another 75 people. Tantrum, the largest Red Bull distributor in Canada, is owned by John Issenman.

I-D Foods began distributing Maille 60 years ago and consequently building the Dijon mustard category in Canada to where Maille now represents 20% of total national mustard sales in Canada.

Tabasco, GoGo Squeez, Cape Cod Potato Chips, Nando’s and Stash have been added along the years, as well as a number of house brands such as

St.Regis, The Great Jamaican, M’Lord, Haiku and Caf-Lib, some of which are gaining great traction in the United States.

For I-D Foods, staying on top of consumer trends is one of the keys to success. For example, eight years ago, the company began catering to the growing Asian and South Asian markets. It created its own brand of Asian food called Haiku, and put more emphasis on the Blue Dragon line of Chinese food.

Since then, it’s added Patak’s line of Indian food and sauces, and Nando’s piri piri sauce. Joseph Leitan, Senior Brand Manager, oversees the Asian category for I-D Foods and has played a pivotal role in the creation of I-D Foods’ Asian portfolio.

Today, I-D Foods sees a big opportunity in the move towards natural and better-for-you products. “These products are resonating with millen-

From left to right: Phillip Gattola, Chief Financial Officer, David Abrams, Director of Business Development and US, Marie-Ève Brunet, Director of Sales, Eastern Canada, Diane Dault, Vice-President of Sales, Quebec, Philip Issenman, Owner and CEO, Fulvio Bussandri, Chief Operating Officer, Gilles St-Aubin, Vice-President of Marketing and Procurement

SPECIAL PROMOTIONAL FEATURE

nials, who are sensitive to what they’re eating and to the environment,” says Gilles St-Aubin, Vice-President of Marketing and Procurement at I-D Foods.

“So, we’re definitely seeking to add more brands in that segment.” The brand Made Good has just signed up with I-D Foods.

Working With P.A.S.S.i.o.n.

Underlying the success of I-D Foods is P.A.S.S.I.O.N.—the acronym that spells out I-D Foods’ values. “The first letter is ‘P’ for passion and the last letter is ‘N’ for never give up, so we are stubborn in trying to be successful,” says Issenman.

Another key value is “ownership,” a unique factor that sets I-D Foods apart. The company has an entrepreneurial mindset: Brand Managers “own” their lines and make all the decisions that are necessary for brand success. “They’re not only responsible for marketing them,

they’re responsible for sales, pricing, margins, supplier relationships, and so on,” says St-Aubin. “And because of that, it creates something unique within our organization.”

To be best in class, I-D Foods is committed to serving both its suppliers and retail partners.

“Suppliers are attracted to I-D Foods because we deliver results,” says Fulvio Bussandri, Chief Operating Officer at I-D Foods. “What gives us traction is that internally, we work collaboratively between sales and marketing. Externally, we give our many retailers added value, including known brands, that offer reasonable margins to sell to the consumer, and that have a high turnover for the business.”

SPECIAL PROMOTIONAL FEATURE

Another important ingredient in I-D Foods’ recipe for success is an eye for the future. In 2019, I-D Foods is going live with a new SAP computer system, which the company has been working on for the past three years.

The new system will allow I-D Foods to align with major retailers and suppliers that are also running SAP. “We need to put in a system that is robust enough to work with us as we grow the business,” says Chief

John Issenman, owner of Tantrum, exclusive distributor of Red Bull in Quebec

Financial Officer Phillip Gattola.

“It will give us the tools to make better management decisions, it will improve our profitability because it will allow us to have a minefield of data, and it will allow us to be more flexible and more responsive to our suppliers and retailers.”

I-D Foods is also focused on “muscle-building” to position the company for ongoing success. In the last several years, I-D Foods hired Roy Husch, Director of Sales and Operations for Western Canada; and Doug Fraser, Director of National Accounts, and Jason Ketis, Director of Operations, Ontario.

Diane Dault, I-D Foods’ longtime VP of Sales, is retiring in January.

She is transitioning responsibilities to Marie-Eve Brunet, an 11-year employee who will become head of sales for Eastern Canada. “This exemplifies the experience and muscle building on our team, and transferring of responsibilities to a younger generation,” says Issenman.

Although Issenman will eventually hand over the reins, he is positive about the future of I-D Foods. “The passion of our team ensures that I-D Foods is well poised for continual growth and that our company legacy will carry on,” he says.

I-D Foods’ hot sauce category led by Tabasco and Nando’s.

70

CANADA’S LARGEST INDEPENDENT SPECIALITY FOOD DISTRIBUTOR

With 70 years of EXPERIENCE as an independent full-service importer and distributor of specialty food, we know a thing or two about what it takes to satisfy and surpass the evolving needs and tastes of today’s consumer.

I-D Foods has been servicing retailers in all channels from coast to coast, helping manufacturers bring their products to market faster and smarter. We operate a unique network throughout the country, including offices and warehouses in Montreal, Toronto, Calgary and Vancouver, reaching more than 10,000 customers in all channels.

We execute and deliver. We aim to be your “Best-in-Class” partner.

www.idfoods.com ● info@idfoods.com

By Shellee Fitzgerald Photography by Jessica Deeks

AMAZING MARCHÉ ADONIS

The 12th store in a growing banner serves up an unparalleled shopping experience 22

November 2018 Canadian Grocer

STORE PROFILE

November 2018 Canadian Grocer

23

STORE PROFILE

i Above: Michel Cheaib and Abdallah Baradhy of Marché Adonis; Fresh pistachios and pastries are among the store's specialties

24

T’S AN EARLY MORNING IN SEPTEMBER, AND inside the grocery store there’s a flurry of activity as produce tables are being tidied, delicate pastries are carefully arranged in display cases and kitchen staff prepare ready-to-eat meals. In a room at the back of the store, a gigantic pita oven is hard at work spitting out fresh flatbreads—dozens of them—while at a nearby table, Middle Eastern pizzas are being prepared. It’s all just a typical morning at Marché Adonis as staff prepare for the day ahead, a process they’ve been fine-tuning since the store opened in March.

The store, located in a busy commercial centre in Gatineau, Que., is the 12th location in the Marché Adonis banner, part of Metro, and the first one to be located in Western Quebec. (Others are located in Montreal, Laval and Quebec City, with two stores in Ontario—Mississauga and Scarborough.)

“There was a strong demand for the Gatineau area so we’re here,” says Michel Cheaib, executive vice-president of Marché Adonis, whose family started the chain soon after arriving from Lebanon in the late 1970s. “It’s also next to Ottawa [just over the bridge, in fact] so you get people coming from Ottawa, too.”

The store’s Middle Eastern heritage figures largely

November 2018 Canadian Grocer

throughout the aisles and the company’s website likens shopping at Adonis to discovering a Middle Eastern zouk—a grocery store “with a thousand treasures.” Indeed, wander the aisles and you’ll find an array of specialties such as freshly made hummus, tabbouleh salads, Armenian lahmajoun pizza and manakeesh (topped flatbread also known as Lebanese pizza), while the ready-meal counter serves up favourites like shish-taouk, shawarma and falafel. There’s also an impressive selection of pastries including baklavas and maamouls (stuffed with nuts or dates), and a sizeable cheese counter with fresh cheeses like baladi, halloum and tresse (a salty, stringy cheese) as well as a large nut section and an olive bar where 20 varieties of olives are on offer. Of course, halal options are plentiful.

“It’s totally different from any other grocery store,” says Cheaib. As an example, he singles out one particular specialty: “We have fresh pistachios in our stores that you rarely find in other places.”

Fresh pistachios, distinct from the dried variety most of us are familiar with, are widely used in Middle Eastern cooking and are currently finding new popularity among foodies.

And then there’s the aforementioned pita oven.

The state-of-the-art contraption is a standout feature

in the Gatineau store, occupying much of a large room behind the “pâtisserie” department. Staff oversee the entire pita-making process, from preparing the dough to bagging the final product when it comes off the conveyer belt. Large glass windows allow shoppers to observe all the action in the pita room, adding a touch of theatre to the shopping experience. Abdallah Baradhy, store manager and long-time Adonis employee, says on weekends the oven produces about 200 racks of pitas—both traditional white and whole wheat versions, as well as a sugar-free option, which he says has become a popular item with shoppers.

At 41,000 sq. ft., the latest Adonis store has come a long way from the small 1,000-sq.-ft. shop that started it all in Montreal 40 years ago. All that extra space provides lots of room to cater to more mainstream tastes and those of the banner’s expanding customer base.

“In the beginning our customers were mainly from the Middle East and those with a Mediterranean background, but now we do cater to everyone,” says Cheaib, noting that this means making more local and specialty items available. On this day, there are stacks of maple syrup and products made from it, along with a display that includes all the fixings for poutine—we are in Quebec after all.

And, of course, there’s all the typical grocery items with familiar brand names, from Kraft Dinner to Nestlé Drumsticks and everything in between. »

Freshly prepared foods such as shawarma, salad, made-to-order crepes and inhouse baked pitas (in three varieties) are all part of “the Adonis experience”

The Facts Location

Gatineau, Que. Size

41,000 sq. ft.

Specialties

House-made pitas; big selection of ready-meals; local and organic items; pâtisserie; Middle Eastern specialties

November 2018 Canadian Grocer

25

STORE PROFILE

At the Gatineau store, shoppers can choose from a large selection of fresh cheeses and deli items; a variety of pizzas are made in house each day

26

Large, meticulously maintained meat, fish and produce departments also deliver on “the Adonis experience,” which is all about freshness and quality. The store maintains control over these attributes by preparing food in house. All of the ready-meals sold at Adonis, for instance, are prepared by the store’s chefs and kitchen staff; and even in the produce department, all fruit for platters is cut fresh every day on site. “We don’t buy from a third party,” says Cheaib. “We do it all ourselves.”

Over the past seven years, Adonis has expanded from four to 12 stores. Cheaib credits Metro, which acquired a majority interest in Adonis and its Phoenicia wholesale business in 2011, for enabling the acceleration of the banner and helping promote it in Quebec and Ontario.

On a call with analysts last year, Metro CEO Eric La Flèche confirmed that Metro would complete its acquisition of Adonis but that it would continue to operate as a separate division. “It’s a good formula and we want to keep it growing,” he said, adding that Adonis was in a good position to grow by a couple of stores each year for “the foreseeable future.”

When pressed for details on future store openings, Cheaib laughs off the question with an “I can’t say right now,” then quickly adds, “I do suggest you stay tuned, though.” CG

November 2018 Canadian Grocer

CHEERS TO 30 YEARS OF BREWING. AGAIN. Original look. Original taste. It has been 30 years since our storied revival, and we are proudly celebrating our rich brewing tradition with a series of Special Edition Heritage Cans.

Must be legal drinking age. Please drink responsibly.

CONGRATULATIONS TO

MARY DALIMONTE Retired Senior Vice-President, Merchandising & Commercial Programs, Sobeys Inc. In recognition of your outstanding leadership, innovation, and dedication to the grocery industry.

2018 Recipient of the GOLDEN PENCIL AWARD

GOLDEN PENCIL WINNERS

the GOLDEN TOUCH

By David Brown Photography by Mike Ford

One has spent an entire career helping shape two of the country’s large grocery chains. The other is a CPG veteran who has worked at some of the biggest companies in the business. On Nov. 19, both will be recognized with the industry’s highest honour when the Food Industry Association of Canada presents the Golden Pencil Award. Read on to see why this year’s winners, Mary Dalimonte and Tom Gunter, are so deserving of this accolade.

First handed out in 1957, the Golden Pencil Award recognizes individuals who have made significant contributions to improving the Canadian food industry as well as their communities.

November 2018 Canadian Grocer

29

Mary DALIMONTE

GOLDEN PENCIL WINNERS

30

Senior vice-president, merchandising & commercial programs (retired), Sobeys MARY DALIMONTE’S PARENTS left Italy

for Canada in the 1950s, bringing with them the hard-work ethic so common in immigrant families searching for a brighter future.

“They came here with nothing, and they built a life for their family and for their children and did it through determination, drive and courage,” she says.

She inherited her parents’ work ethic along with their passion for food. No matter how busy everyone was, they always made time for family; good food—carefully selected and lovingly prepared—was at the centre of most family gatherings. “Food is love,” she says.

Dalimonte retired earlier this year after 40 years in the grocery business.

She started with Loblaw as a part-time cashier while still in high school and stayed on while studying at York University. After graduating in 1979, Dalimonte joined Loblaw full time and embarked on an upward career path that touched most parts of the business. In 2008, she made her one and only employer change, joining Sobeys, where she led the launch of its innovative Urban Fresh concept. When she retired, Dalimonte was senior vice-president, merchandising and commercial programs.

Like many successful business leaders, Dalimonte points out the importance (cont’d on page 32) of the people she’s

WHEN TOM GUNTER reflects on his long

and successful career in the food industry, some common themes emerge.

Making time to connect with people— this is a big one. Colleagues, co-workers, even competitors. Help them out and forge real relationships, he says. Another one is the importance of seeking change and challenge as an opportunity for growth. “If I was giving people advice today, I would say don’t get too comfortable in any role or company for too long,” says Gunter.

The learning and experiences from other people and organizations brings fresh perspectives, he explains, providing new ideas for old problems and different ways of thinking that can lead to breakthroughs and progress—always moving forward, never getting stuck.

Gunter spent the first 10 years of his career at Scott Paper before joining the food industry for good with Frito-Lay in 1990. He took on increasingly senior roles with Frito-Lay, Molson, Conagra and Fiera Foods. In each place, he can recall lessons learned from new challenges.

His time at Frito-Lay, for example, included an extended stint running direct-to-store deliveries in both the United States and Canada. You gain an incredible amount of people experience in delivery, he says, working with everyone from road sales (cont’d on page 33)

Tom GUNTER

Executive vice-president and general manager (retired), Fiera Foods Company and former president, Conagra Foods Canada

31

GOLDEN PENCIL WINNERS

(Mary Dalimonte, cont'd from page 30) worked with, explaining how her management philosophy created a virtuous cycle of performance for both herself and her teams. “I’ve always said teach them, train them, coach them—they will take care of the customer,” she says. “Our businesses are built on people and the stronger you make your employees, the more you invest in them, the stronger the business.”

So, along with a relentless dedication to the basic building blocks of business, Dalimonte says she and her teams were committed to treating with respect anyone they came across—from peers, to subordinates, customers of course, and vendors. “You have to take care of the vendors,” she says. “Negotiations can be hard, but at the end of the day, vendor-­ retailer partnerships are built on trust, integrity and a collaborative approach where both win.”

Her own determination to learn, grow and innovate kept her connected to the kitchens, markets and shopping aisles of the food industry throughout her career. If a challenge presented itself, Dalimonte knew how to find a solution. “You go to the stores,

you talk to the people, you talk to the employees.

That is where the answers are.”

That philosophy meant regular field trips for herself and her team, from food conferences in Italy to hidden gems a short drive away: “Little markets, little independents where there was great passion and offers that built loyalty with consumers. It was about getting them [her team] to open their minds and say, ‘We can do this and better.’” Eventually employees would start making their own great discoveries and bring them back to the office. “When your people are dragging you to places and bringing in their own bags of things saying, ‘You have to try this,’ that is pretty satisfying.”

Even after 40 years in the industry and now retired, Dalimonte’s love and enthusiasm for food and the grocery industry is evident as she recalls those trips. Passion is what drove her and, she believes, it was instrumental to her success. “If your passion is shining through, you will always inspire as a leader,” she says. “It is all about inspiring others; it creates great things.”

YOU'VE H AD TOO SMALL A N D TOO BIG NOW W E HAV E T HE

PER F ECT S I Z E AV A ILA B L E N O W

CA NDY M I X 1 8 5 g S EL ECT ED VA RIETIES

ASSO R E T D M IX 90 CO UNT.

$

23*MIL LIONS

O F N AT I O N AL BRAN D E X PL O S IO N

M I X C A N DIE S

RE SE A L A B L E B A G

2 ND *

LAR GEST CO N F ECT IO N E RY BRA N D

SU PE R IOR Q U A L IT Y

* Nielsen Data: National C&G – 52 weeks –Licorice , Novelty and Bagged/Pegged Candy-January 2018.

(Tom Gunter, cont’d from page 31) employees, to dis­ trict managers, to warehouse and logistics. “You get some very rich experiences in the DSD business,” says Gunter. “When I left Frito-Lay, there weren’t many HR situations that I hadn’t dealt with.”

When he was considering joining Conagra, an executive at the company told him the road ahead would be difficult. “Don’t come in here expect­ ing everything to be rosy, we have a lot of heavy lifting to do,” he was warned. He took the job anyway. “It was probably one of the most gratify­ ing 10-year runs that I had because I was able to help retool the business,” he says. “We turned it around and four years into that, they made me pres­ ident of the Canadian division.” During his tenure, they launched Healthy Choice frozen entrees and Orville Redenbacher ready-to-eat popcorn, and also acquired the Del Monte Canadian business.

After a career in publicly owned business, Gunter joined Fiera because he wanted to learn more about working in a family-run business. “My first year there it was like going back to school,” he says.

“It’s not like a big company where you have a lot of people to delegate to.” Loyalty matters more, and people moved quickly and boldly. “It changes how you operate as a leader.”

Along the way, Gunter took the time to speak regularly as a guest lecturer at universities and was an active member of Food and Consumer Products of Canada (which just honoured him with the 2018 Award of Distinction) and the Grocery Foundation.

These days, Gunter is retired, but not really retired. He has created a new firm, T.A.G. Market­ place Consulting, and is working with Burnbrae Farms as a senior advisor. And he’s still building new relationships and mentoring young profession­ als through his position on the board of Toronto food business incubator Food Starter.

The difference now is that he’s his own boss, work­ ing on his own schedule. “My whole goal is to not be commuting every day,” he says. That’s meant more time to read, play tennis and sing in a rock band— they practice every Monday, and play four or five gigs a year just for dinner and drinks, he says. CG

PAYMENT TECHNOLOGY

THE

PAYMENTS REVOLUTION Big changes are afoot in the payments landscape,

and grocers will need to stay on top of the trends to keep customers satisfied

By Rebecca Harris Illustration by Drew Shannon

“H

ow will you be paying?”

It’s a question shoppers at the checkout have been asked for decades, and the options used to be pretty straightforward: cash, credit or debit. Now, with the emergence of digital technologies, the once-sleepy payments sector is bursting with activity. There’s a vast array of new ways to pay for goods—from mobile wallets to social media networks—and keeping on top of the trends is imperative for retailers.

“Payments matter now,” says Justin Ferrabee, chief operating officer of Payments Canada, a nonprofit organization that owns and operates Canada’s payment clearing and settlement infrastructure.

“They didn’t really matter for a very long time.

Although we had improvements with debit cards and credit cards … payments didn’t really change.

In addition, payments weren’t thought about as part of the experience of shopping—it was just something you had to do and it was fine. And that’s starting to change.”

Like almost every other trend driving change in retail, it’s all about convenience. “The innovation that’s happening in payments is the drive towards convenience, to make payments easier, and to reduce the friction … And digitization is enabling things to change,” explains Ferrabee.

Echoing those sentiments, Andrew McFarlane, managing director at Accenture’s Canadian financial services practice, says two overarching trends

34

November 2018 Canadian Grocer

are the “experience economy” and the growing use of mobile. “The customer experience is changing completely now to being a model where [consumers] expect [businesses] to take the hassle and drama out of any of the experiences and, therefore, push the payment to the background as well,” he says.

On the mobile front, McFarlane points to the extraordinary growth of mobile payments in China.

In the more tech-advanced coastal cities in China, he says, up to 90% of consumer payments are now mobile based. “The large Chinese payment processors and other businesses offering solutions will continue to grow and look to expand their reach globally,” says McFarlane. “Therefore, I think the use of mobile as a form of payment will continue to evolve. It will definitely be the main disruptor within the payments space going forward.”

WILL CANADIANS EMBRACE NEW PAYMENT OPTIONS? Research shows consumers have a big appetite for new payment methods. Recent Payments Canada surveys, conducted by Leger Marketing, found that 55% of Canadians are willing to give up cash and coins; 43% are interested in invisible checkout payments such as those offered by Amazon Go; and 33% are interested in payments via social networking apps such as Alipay and WeChat Pay, which are popular in China. One in six Canadians has uploaded an e-wallet app and 70% who had downloaded a mobile app reported making at

FEATURE

November 2018 Canadian Grocer

35

PAYMENT TECHNOLOGY least one purchase with their mobile devices.

The survey also found that businesses stand to lose out if they don’t integrate faster, more convenient payment technologies. More than half of respondents (53%) said they had abandoned a purchase either in store or online because of “friction” at checkout, which Payments Canada defines as anything that slows down a payment.

On the flip side, companies that have been embracing customer-facing technology, including mobile-first initiatives and payments, have reported revenue growth and profit margin increases above 5% for the past three years, according to PwC Canada.

“So, it’s clearly paying off,” says Anita McOuat, national leader – technology, media & telecom (TMT) & consumer markets at PwC Canada. For retailers, “it’s about giving the customer options to pay the way they want to pay,” she says.

Payment processor Moneris saw a 32% increase in contactless transactions (which includes “tap” cards and mobile wallets) in Q2, and 40% of the overall transactions it processes are now contactless. “Our research shows 55% of Canadians prefer contactless because it’s quicker and consumers know it is a safe transaction,” says Patrick Diab, vice-president, product and client solutions at Moneris. “With the younger demographic, between 18 and 34, that number jumps to 67%. That’s a generation that wants a quick checkout using tap and go. Whether that tap is happening with a card, a watch or a phone, it’s becoming more and more popular.”

PAYMENT TECHNOLOGIES GROCERS NEED TO KNOW ABOUT

1 Mobile wallet

A mobile wallet allows users to store their credit or debit card information in digital form through an app on their mobile devices. To accept mobile wallets such as Apple Pay and Google Pay, retailers’ POS terminals need to be contactless and NFC-enabled (which stands for “near field communication,” referring to a technology where devices in close proximity to each other can communicate).

Mobile wallets have been slow to catch on in Canada, but the global trend points towards growth.

A new study from U.K.-based Juniper Research estimates the global number of “mobile contactless” users will exceed 760 million by 2020, up from an estimated 440 million in 2018. Growth over the next five years will continue to be dominated by the major “OEM players:” Apple Pay, Samsung Pay and Google Pay, according to the research firm. It forecasts that OEM pay systems (meaning systems coming from the “original equipment manufacturer” as opposed to a third-party app) will reach 450 million users globally by 2020, with Apple Pay accounting for half of all users globally.

Taking a page from mobile payments leader Starbucks, retailers in the grocery space are creating their own digital wallets made available exclusively

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November 2018 Canadian Grocer

to their customers. In 2016, Walmart rolled out Walmart Pay—available through the Walmart app— at all of its U.S. stores. And late last year, Target introduced its “Wallet” in the Target app.

By using retail apps, shoppers are given added value with additional in-app features. With Starbucks, for example, “you can see your points balance and you can be rewarded for your loyalty,” says McFarlane. “So that’s really personalizing the user experience. And the payment is just moving to the background … You don’t even think about having to have cash to make the payment.”

2 Social platforms and QR codes

In China, cash is no longer king: the majority of consumers use digital platforms that combine social media and commerce. WeChat Pay, which has 800 million monthly active users, is a mobile payment option incorporated into WeChat, a messaging and social media network. Alibaba Group’s Alipay, which has more than 500 million active users, added a social networking function in 2016.

For Canadian retailers, accepting WeChat Pay and Alipay can be a way to tap the spending power of Chinese tourists and international students. For example, earlier this year, Toronto-area ethnic grocer Galleria Supermarket began accepting the two payment methods at all five of its Toronto-area stores to better serve its growing Chinese customer base.

“Mobile payment definitely provides better service and convenience for our customers,” says Chris Yu, marketing and merchandising manager at Galleria Supermarket. “Chinese customers are familiar with WeChat Pay and Alipay, so they feel more invited when they shop in our stores, and feel we care about Chinese customers.”

For Moneris’s Diab, what’s notable about these two platforms is their use of QR code technology, which means merchants don’t need hardware such as a card or chip reader. “It’s a very secure method of payment and the cool factor about it is any device that has an internet connection can display a QR code—you don’t need NFC technology,” says Diab. “My opinion is that QR code payments are here to stay. And in the future, we’re going to see more and more of these QR payments.”

3 Invisible checkout

The debut of the first Amazon Go store in Seattle earlier this year opened the retail industry’s eyes to the concept of the “invisible” checkout. At Amazon Go, there are no checkout lanes or cashiers: customers launch the app as they enter the store, pick up their items and simply walk out the door. Sensors and cameras keep track of it all, and purchases are automatically charged to the shopper’s Amazon account as they leave the store.

PwC’s McOuat says Amazon Go is a potential “major disruptor” in grocery. “We haven’t seen it widely rolled out, but I think all grocers are aware the

THE CREDIT CARD FEE CONTROVERSY The cost of accepting credit cards has long been a sore point for grocers operating in a low-­margin industry.

According to the Retail Council of Canada (RCC), Canadian merchants pay among the highest costs in the world for processing credit card pay­ments.

Merchants pay more than $5 billion annually, with interchange—the amount paid to banks—accounting for 80% of that figure.

There is a tiny sliver of good news: starting in 2020, Visa and MasterCard will reduce fees to an average annual rate of 1.4%, down from 1.5%.

However, in a recent statement, RCC said the reduction is “far less than merchants reasonably have expected,” and leads to a savings of only $100 for every $100,000 in credit card sales.

technology exists and Amazon has it, and so they’re thinking about how they’re going to respond.”

Payments Canada’s Ferrabee says while it’s early days for Amazon Go and it’s still imperfect in many ways, “Amazon is a perfecting machine and they’re going to get better and better at it ... If I were a grocery retailer, I would be looking at this as one of my top three things to consider, as far as making [the experience] better and easier, and building a relationship with my customer so I don’t lose them to an Amazon Go or equivalent.”

That said, the Amazon Go concept brings up a key challenge for grocery retailers: cost. “The amount of technology investment that’s required to make things like Amazon Go a reality could be prohibitive for retailers,” notes McOuat. “The grocery industry is challenged right now in terms of pressure on margins and pressure in the packaged goods sales category, so in terms of funding that technology, that will be a challenge.”

On the other hand, eliminating the checkout could generate cost savings. “The mobile phone effectively becomes your point-of-sale retail device,” says Accenture's McFarlane. “So your cost from a retail perspective can come down significantly and you can deploy your staff better.”

The key challenge for any company bringing in a new payment technology is safety, says McFarlane.

“That’s critical, and it goes without saying that anything they do in future technology has to be as safe and secure as what they’re using today.” CG

2018 STAR WOMEN IN GROCERY WINNERS FROM LEFT TO RIGHT Tebbie Chuchla, Head of marketing, Conagra Brands Julie Bednarski, president and founder, The Healthy Crunch Company Tammy MacPhee, district operator, PEI, Sobeys Sierra Johnston, store manager, Save-On-Foods Nicole Bleiwas, formerly with Flipp Corporation as vice-president of insights & marketing Melissa Pryszlak, director, logistics and engineering, Metro Ontario Lynn Caiger, senior category and shopper insights team lead, Unilever Canada Lyne Castonguay, executive vicepresident of store experience, Sobeys Julie Sirois, director of business development, PepsiCo Foods Canada Josianne Légaré, senior vicepresident of sales, A Lassonde Janet Jacks, founder, Goodness Me! Jacqueline Craig, director, risk management & food safety, Save-on-Foods Dana Somerville, vice-president and head of brand build, innovation and R&D, Kraft Heinz Canada Cynthia Beretta, founder, Beretta Farms Chris Yu, manager, marketing & merchandising, Galleria Supermarket Cheryl Smith, general manager, cheese & tablespreads, fine cheese & yogourt, Parmalat Canada Caroline Nadeau, vice-president of sales, Coca-Cola Canada.

Alicia Samuel, director, IT and business solutions, Longo’s MISSING FROM PHOTO Annette Woodhead, former owner, Blind Bay Village Grocer For full details on the awards, and more photos of the event, visit canadiangrocer.com

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THE 2018 STAR WOMEN WINNERS SHONE at the Star Women Awards Breakfast held on Sept. 25, 2018 at the International Centre, Mississauga. “We are thrilled to celebrate with the winners this morning,” said Kathryn Swan, Group Publisher, Canadian Grocer, “and that so many of their teams are here to support these fantastic women in our industry.”

The sold-out crowd was treated to an animated discussion by the Star Women panel which included Cynthia Beretta of Beretta Farms, Lyne Castonguay of Sobeys, Jacqueline Craig of Save-on-Foods, Josianne Légaré of A. Lassonde, and Cheryl Smith of Parmalat, and was moderated by Tony Chapman.

Now in its 7th year, the Star Women Awards recognizes women who have demonstrated leadership, innovation, collaboration and dedication to the grocery industry. “It is important that we recognize the contribution from women on both sides of the business,” said Jennifer Litterick, President, Canadian division & North American Grocery, EnsembleIQ. “The Star Women Awards is and always has been, about inclusion and bringing retailers and suppliers, men and women together, so we can learn and grow as an industry.”

Keynote speaker Jennifer Lee of Deloitte Canada, drew our attention to the rise of insight-­ driven organizations, and how well they are positioned to win with consumers and the shifting retail model.

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Autonomous delivery

Look ma, no driver!

UDELV

Autonomous delivery is making tentative inroads in the grocery space, bearing a promise of transforming last-mile delivery. But there are still some hurdles to clear before it becomes reality By Chris Powell THE DRIVERLESS vehicle navigates its way along city streets and through subdivisions, several online grocery orders safely stowed in the compartments running along its sides.

It is a testament to human ingenuity, using a roof-mounted LiDAR (light detection and ranging) unit that constantly emits laser beams to generate a 360-degree view of its surroundings; radar sensors that determine the distance between it and obstacles; and cameras capable of detecting traffic lights, road signs and moving objects such as pedestrians and cyclists.

Unlike traditional delivery vehicles, it doesn’t exceed the speed limit, run amber lights, or make unsafe lane changes. It’s also fully electric, so there are no toxic fumes being spewed into the atmosphere.

As the order nears its destination, the waiting customer receives a text notification and heads outside to find the vehicle—car-shaped, but not really a car—waiting at the curb. The customer enters a custom code generated when they placed their online order (or perhaps they scan with their phone) to unlock the compartment and remove their groceries.

It might sound like something out of

science fiction, but versions of this future are already playing out across Europe and the United States, with companies conducting a series of test-and-learn pilots in the autonomous delivery space.

Companies such as Tesla and Ford have generated a slew of headlines around self-driving passenger vehicles, but several firms, many bearing futuristic names like Udelv, AutoX, Nuro and Starship Technologies, are working to address the commercial implications.

In recent months, they’ve announced delivery partnerships with companies ranging in size from local/regional chains November 2018 Canadian Grocer

41

TECH to corporate giants such as Kroger and Domino’s Pizza. In September, the Oklahoma grocery chain Buy for Less announced that it had teamed up with San Francisco’s Udelv on a pilot delivery program, while AutoX—business slogan: “Automate your everyday”—has announced partnerships with the San Jose, Calif.-based farm-to-table delivery service GrubMarket and Los Altos, Calif. family-owned grocer DeMartini Orchard.

AutoX users place their order through a dedicated app, with the groceries picked and stored in a temperature-­ controlled environment. When the car arrives, the customer simply taps the “Unlock” button on the app to retrieve their order from the trunk. AutoX vehicles are also equipped with “mobile shop shelves” in the right rear window,

are currently spending more than $100 billion a year to get parcels into the hands of customers.

And e-commerce is only going to grow, with a recent report from New York-based 451 Research forecasting it will account for 17.3% of global retail sales by 2022, fuelled largely by the growth of mobile, or “m-commerce.” That’s a lot of deliveries.

Autonomous delivery is expected to help facilitate that growth: McKinsey predicts autonomous vehicles, including drones, will account for nearly 100% of deliveries of business-to-consumer items by 2025. The consulting firm says a combination of droids/bike couriers and autonomous vehicles will handle those duties in large urban areas with populations of a million or more.

The grocery industry could be one of the primary beneficiaries of self-driving delivery. “The reality is that the burden of last-mile has a significant impact on margin for a [grocery] retailer,” says Sylvain Perrier, president and CEO of Mercatus, a Toronto company specializing in end-to-end solutions for grocery retailers.

Udelv CEO Daniel Laury is blunter, calling autonomous delivery vehicles—or ADVs—a “no-brainer” when it comes to improving the delivery experience. “Delivery is one of the largest costs for merchants, and for consumers it has generally been a frustrating experience,” he says. “By introducing autonomous technology, we’re able to reduce overheads for merchants, meaning savings can be passed on to the customer.”

Laury says ADVs could one day make delivery as ubiquitous as in-store shopping, while at the same time removing complications for retailers around operating, managing and maintaining truck fleets. The convenience factor for consumers, he says, is “huge,” particularly for people who work long or off hours or have difficulty leaving their home.

“With ADVs, groceries will be coming to you instead of you going to the grocery store—at any time of the day or night, to any location, and all of it at an extremely low cost,” says Laury.

Brick Meets Click’s Bishop, meanwhile, says ownership of a fleet of autonomous delivery vehicles would enable grocers to

With ADVs, groceries will be coming to you instead of you going to the grocery store—at any time of the day or night, to any location, and all of it at an extremely low cost enabling customers to pick up a snack or add to their list.

One state over, in Scottsdale, Ariz., Fry’s Foods—a division of the U.S. grocery giant Kroger, which operates 2,800 stores in 35 states—has partnered with Nuro, a robotics company co-founded by former Google engineer Dave Ferguson, to conduct a test of its technology.

Some experts believe these tests could radically transform the grocery industry.

“Autonomous vehicles have tremendous potential to change the game,” says Steve Bishop, managing partner of Brick Meets Click, a retail consultancy in the Chicago suburb of Barrington, Ill. Indeed, autonomous delivery vehicles are expected to address one of the fundamental challenges of e-commerce: last-mile delivery. In its 2016 report Parcel Delivery: The Future of Last Mile, consulting firm McKinsey said companies

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November 2018 Canadian Grocer

take control of their entire online offering, from ordering through to fulfillment (which is typically outsourced to thirdparty vendors). “The ownership of the entire process, with vehicles designed to transport groceries, should result in better quality control and improve the shopping experience,” he says. “At scale, this should help a retailer with their online profitability while providing less costly delivery options to shoppers.”

Perrier agrees, saying that entrusting last-mile delivery to another company remains an “extremely great concern,” for grocers still trying to adapt to the new online marketplace.

He predicts stores will employ autonomous vehicles to make what he calls “micro-­deliveries” to customers within a three- to four-kilometre radius of a given store, stripping out one of the primary costs of last-mile delivery: labour.

According to one report, drivers and fuel constitute 70% of the cost of lastmile delivery. “If [grocers] could do it without the labour component … it would save them so much of the cost burden,” says Perrier.

Yet for all their promise, autonomous delivery vehicles still must clear several significant hurdles before they’re whisking grocery orders to people’s door. That includes everything from obtaining the necessary government approval (“I’m not sure that [Toronto mayor] John Tory would allow autonomous vehicles to roam the streets of Queen St. West,” says Perrier) to thorny issues around liability should the driverless vehicles careen into other vehicles or pedestrians. “We’re still trying to figure out Airbnb,” says Perrier. “[So] I would hate to be the underwriter on insurance if that thing went awry and hit an oncoming school bus.”

Bishop says the capital investment required to build and maintain a fleet of autonomous delivery vehicles could also be prohibitively expensive, especially for an industry already operating on notoriously thin profit margins.

For now, Perrier says widespread adoption of autonomous delivery vehicles isn’t among the primary concerns for a legacy industry still coming to grips with online shopping. “It hasn’t even hit the edge of the piece of paper yet,” he says. “The cool factor will drive things forward, but I always caution retailers: don’t get distracted by the shiny things you see out there.” CG

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Satisfy customer demand by offering authentic Italian foods in the grocery store

Special promotional feature in Canadian GroCer–noVemBer 2018

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in italy, food is a passion and many producers strive to remain true to the tradition of quality and taste for which italian food is world famous.”

Authentic Italian products draw consumers looking for quality fare Consumer statistics show that there is an ever-increasing demand for quality, authentic foods in Canada. Given that Italy has a long tradition of producing foods of the highest quality, retailers can benefit by offering authentic Italian food products in their stores to satisfy growing customer demand.

When it comes to Made in Italy products, the substantial growth in imports speaks volumes. In the 10 years between 2007 and 2017, Canadian imports of Italian foods have increased by 70% from $702 million to $1.2 billion. From olive oil to coffee, pasta to chocolate, fish to tomato sauces, confectionery and beyond, Canadians increasingly seek Made In Italy food products to their grocery carts.

“Italian food has always been popular but people are now beginning to realize there is a difference between Italianish (made in other parts of the world) and authentic Italian maintaining the historical essence of these foods and ingredients that Italians are so passionate about,” says Anthony Morello, president of Aurora Importing and Distributing, which provides the greatest number of leading authentic Italian brands in Canada. “We see a real thirst for knowledge from the Canadian consumer to want to know more about traditional Italian products, especially during festive entertaining seasons.”

Joe Mannara, President of Concord Premium Meats (which carries Marcangelo authentic products—the number one imported brand of Italian deli meat to Canada), says consumers find something special about opening up a product developed, sliced and packaged in Italy. “For that moment when you’re sipping your wine and opening up that package of freshly sliced prosciutto, you feel like you’re in Parma or Tuscany,” he says.

Adding authentic Italian to your product offering doesn’t have to come at the expense of other domestic brands either, adds Mannara. “When it comes to deli meats, the category has expanded [with Italian imported items] and we’ve added millions of dollars of sales to the Canadian market in this category.”

As the importers/distributors of products like Pan Ducale Cantuccini (a crunchy biscotti from Abruzzo) for more than 25 years, Excelsior Foods prides itself on providing authentic Italian foods that adhere to traditional, tried-and-true recipes.

“In Italy, food is a passion and many producers strive to remain true to the tradition of quality and taste for which Italian food is world famous,” says Daniel Violante, Vice-President Sales and Marketing at Excelsior Foods. “We want to bring our clients an authentic—and delicious—Italian taste experience and sourcing from masters of the craft is one way to do this.”

The Italian Trade Commission (ITC) has been partnering with Canadian retailers on a continuing basis [Page 2] to promote authentic Italian foods and increase the knowledge and appreciation of Made In Italy Foods in Canada.

“Made In Italy foods have unique qualities that add value to discerning customers and hence to retailer shelves nationwide.

These qualities, which are ever present both in the properties of the foods and their distinct flavours, are the result of a tradition of craftsmanship, the highest production standards and ideal climactic conditions. Together, these factors enhance all authentic Italian foods, separate them from imitation products and reward Canadian palates one bite at a time.” says Matteo Picariello, Italian Trade Commissioner.

Retailers can find out more about the opportunities available with the Made In Italy campaign at: 416.598-1566; toronto@ice.it (Toronto) and 514.284.0265; montreal@ ice.it (Montreal). And be sure to follow @ITAToronto for additional information and content.

Special promotional feature in Canadian GroCer–noVemBer 2018

ENTERTAIN WITH AN ITALIAN ACCENT Explore our Made in Italy feature and discover an unbeatable selection of Italian cheeses and charcuterie.

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Partnerships prove fruitful on Made in Italy promotions

Retailers see phenomenal results in collaborating with the Italian Trade Commission The Italian Trade Commission (ITC) has partnered with retailers across the country to promote authentic Italian foods and increase the knowledge and appreciation of Made in Italy foods in Canada.

Back in September 2016, the Commission joined forces with Longo’s on a Made in Italy program that ran for six months. “We thought this program resonated well with Longo’s because we are a family-run business with Italian roots,” says Rob Koss, Director Consumer Promotions, Planning and Community Outreach at Longo’s. The campaign proved so effective, in fact, the grocer is doing it again this November, and continuing the promotion online at Grocery Gateway for an entire year.

Koss says with the help of the ITC, Longo’s was able to create a “full 360-degree promotion” of all things Italian, which was hugely successful. In addition to signage and booths showcasing product, the grocer leveraged its Loft cooking classes to introduce shoppers to Italian-themed menus using only authentic products. Various Longo’s stores also hosted Italianthemed events, including one with an accordion player that prompted shoppers to start dancing. “This campaign definitely brought something different to the daily grocery,” he says. “We had more than a 30% lift in authentic Italian products and half of that came from brand new SKUs.” For its online promotion on Grocery Gateway, Longo’s will offer pairing suggestions of authentic Italian food and wine.

“Our stores don’t currently sell imported wines but we do have a great selection online,” says Koss.

“

We are proud to partner with canadian retailers to satisfy this growing demand, by improving the visibility and increasing the offerings of authentic made in italy foods.”

This year, Urban Fare in B.C. has also partnered with ITC to promote authentic Italian products across its five stores in Vancouver and Kelowna. “We’re halfway through now and customers are loving it,” says Urban Fare’s Marketing Manager Nash Huntley. “Each of our stores has a licensed restaurant and our executive chef has been creating authentic Italian recipes to feature every week.”

In addition, Urban Fare stores are decorated with Italian flags and employees are donning Italian-themed t-shirts to really get into the spirit. While the interactive, colourful product displays have been a hit with shoppers, the biggest draw has been a contest for a “foodie” tour of Italy valued at $6,500 that ITC is

helping to facilitate. “We’re promoting that on all our marketing and advertising efforts and it’s creating a lot of buzz,” says Huntley. “It’s a really effective tool to get customers talking about this program and getting them into our stores.”

At Fortinos, authentic Italian products were brought to life during a three-week promotion last year that featured various in-store events. Customers took part in the cracking/cutting of large Parmigiano Reggiano wheels and a 10-pound Panettone flown in from Italy. “We also had various vendors do in-store demos to educate our customers about products and the various regions they come from,” says Peter Weicker, VicePresident of Marketing and Merchandising at Fortinos (part of Loblaw Companies).

Another initiative the grocer launched in conjunction with the promotion was a fill-on-demand cannoli program with products imported from Italy. “We’ve grown a number of our authentic Italian brands now and they make up a significant portion of our Christmas program,” says Weicker.

ITC partnered with Loblaw Companies from September to December 2017, introducing several new vendors and a high number of new SKUs to 100 stores nationwide. The promotion resulted in substantial growth, with five million purchases of authentic Italian products over the year following the joint initiative.

Results like these, in addition to a study on consumer trends and preferences commissioned by ITC, show Canadians are discerning consumers and demand quality foods with ever-growing intensity. ITC is proud to partner with Canadian retailers to satisfy this growing demand, by improving the visibility and increasing the offerings of authentic, Made in Italy foods.

Special promotional feature in Canadian GroCer–noVemBer 2018

Tips to Showcase authentic Italian Foods Here’s how to ensure your Made In Italy products get optimal play in the grocery store:

Provide designated areas: Create anchors to draw customers with visually appealing displays of Made in Italy products. “Make it easy for your customers to “shop Italian” by creating a special destination within the store,” says Daniel Violante of Excelsior Foods.

“The sky’s the limit on what you can offer here— from biscuits to pasta, oils and vinegars, sweets and spreads.” Ensure these sections have proper signage, update the selection often and use it as a place to try new things.

Taste, taste, taste: Take advantage of vendors who are willing to come in store to do samplings and educate customers about the product ingredients and the regions they come from. “Let customers try it and let them love it and then they’ll put it in their baskets,” says Fortino’s Peter Weicker. “Sampling definitely works.”

Educate your staff: If your staff is conducting the sampling, ensure all employees are knowledgeable about the products and have sampled themselves so they can talk about the the flavour first-hand. “Being able to tell the story of a product and what makes it special will have an immediate impact on the consumer,” says Violante. “Importers/distributors like us are always happy to share our knowledge to help make this happen.”

Teach your customers: In addition to talking to shoppers about the superior qualities of authentic Italian products, show them how to look for Made In Italy label designations that ensure products are truly authentic.

Tag onto the holidays: Create simple solutions by pairing authentic Italian products in grab-and-go formats that customers can use for entertaining. “Products like Panettone and Torrone have been exploding in recent years not because they are new, but because we are educating, sampling and providing easy to use methods that can allow anyone to be the hero host of their festive party,” says Anthony Morello, of Aurora Importing and Distribution.

Work with the ITC: If you’re curious about adding new authentic Italian products to your grocery shelves, the Italian Trade Commission can be a great source in connecting you with vendors and putting together a successful promotion program to launch in your stores.

Special promotional feature in Canadian GroCer–noVemBer 2018

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AISLES

Products, store ops, customers, trends

Cauliflower “steak” cooked with Good Food for Good’s Tikka Masala sauce

COOKING SAUCES

GOOD FOOD FOR GOOD

The secret’s in the sauce Thanks to globally-inspired flavours and “freefrom” innovations, consumers are gobbling up readymade sauces

By Lara Brighton

A

s you stroll through Stong’s Market in Vancouver, you’re not likely to miss the ever-expanding selection of ready-made cooking sauces featuring interesting international flavours and new “free-from” recipes. Stong’s isn’t unique in this respect: whether it’s an Indian-inspired, gluten-free tikka masala sauce sweetened with dates, a vegan Italian-style alfredo sauce using a cashew nut base, or a Middle Eastern lahmajoun pizza sauce, grocers across Canada are giving more and more shelf space to unique ready-made cooking sauces.

Recent consumer data from Nielsen shows that baking and cooking sauce sales were up 5% over last year in Canada, accounting for nearly $76 million in sales, while pasta sauce sales grew by 2% to reach nearly $292 million. According to Carson Bonina, manager at Stong’s Market, this growth isn’t surprising. “The demand for convenient, ready-made food has been on the rise for several years now,” says Bonina, adding that ready-made cooking sauces are no exception.

November 2018 Canadian Grocer

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AISLES Today’s globally-inspired, made-fromscratch-style sauces enable consumers “to purchase exotic and healthy sauces, and still be able to cook and finish the meal themselves,” adds Bonina. “These customers are often short on time, but still want to try new and exotic dishes.”

According to Isabel Morales, manager of consumer insights at Nielsen, when it comes to ready-made cooking sauces, “There are more bold flavour combinations at the store level.” Many of these are international in origin, she says, the most popular ready-made sauces today being inspired by Thai, Indian, Middle Eastern and Caribbean dishes.

Tebbie Chuchla, head of marketing at Conagra Brands, says Canadian consumers are now seeking unexpected and ethnic flavours. “Consumers are moving toward more gourmet and multicultural flavours. In fact, 74% of Canadians like to experience other cultures through food and 72% believe flavour and spice-inspired meals help break the monotony of meal time,” she says. To meet this need, Conagra has created its new VH Fusion Flavours line, which marries sweet with spicy through offerings such as Honey Sriracha and Pineapple Jerk.

Morales believes Canada’s changing cultural landscape is driving the growing popularity of bold-flavoured cooking sauces. “Millennials are a generation [that is] more ethnically diverse than ever before in Canada. As they continue to grow their spending power and become heads of households, they are looking for, and purchasing, a wider variety of flavours,” she says.

This all sets the stage for food companies like Toronto’s Saha International Cuisine—the manufacturer of the earlier-­ mentioned Middle Eastern lahmajoun pizza base marinade as well as other globally-inspired ready-made cooking sauces—to see demand for its products growing. Launched in 2010 by Rahul Jain and chef Robert Heidenreich, Saha was founded to give Canadian consumers a taste of the most celebrated street foods from around the globe. Today, the company offers about a dozen varieties of Caribbean, Thai and Middle Eastern curries, marinades and cooking sauces.

Jain and Heidenreich are not only on trend flavour-wise, but they also hit on an important trend with their ingredients: all of their ready-made cooking sauces are free from gluten, artificial

56

November 2018 Canadian Grocer

ingredients/flavours, additives, preservatives and saturated fats.

The “free-from” focus of many of today’s ready-made sauce lines is no doubt playing a big role in the success of these products. Canadian consumers are more health conscious and ingredient savvy than ever, eager for clean foods made from simple ingredients. Jain says today’s consumers “rightfully demand high-quality products that deliver great taste, variety and health, and are compatible with their dietary choices, personal beliefs and lifestyles.”

Mississauga, Ont.-based Good Food for Good offers a similar combo of international flavours and a focus on clean ingredients. Founder Richa Gupta was inspired to start her sauce company out of a desire for great-tasting cooking sauces that were both healthy and convenient.

Her sauces—which use mostly organic ingredients and have no added sugar or preservatives—include ready-made butter chicken, tikka masala, coconut curry, and Mexican taco and enchilada sauces.

Gupta notes that many traditional packaged sauces “have almost the same amount of sugar as a handful of candy per serving,” so she uses natural sweeteners such as dates for her products. “The new wave is all about no-compromise convenience, where consumers are not expected to give up quality for flavour.”

Kailey Gilchrist, founder and owner of Nona Vegan—a Toronto-based sauce company that offers dairy-free, vegan creamstyle Italian cooking sauces in Alfredo, Carbonara and Cheesy flavours—says consumers are “frequently searching for ‘free-from’ labels in order to make a meal suiting everyone’s dietary restrictions.”

Created using a cashew nut base, Nona Vegan sauces have won multiple awards including the Best of Fest Award at the Toronto Mac and Cheese Festival and the Favourite Artisanal Product from the Toronto Vegetarian Association Awards.

“Folks want their loved ones to be able to enjoy delicious food regardless of their dietary preferences,” she says.

Some grocers are even investing in their own sauce lines. Brad McMullen, president and co-owner of Toronto’s Summerhill Market, says his store has been creating its own cooking sauces in-store for some time now. “The main consideration is offering variety and taste using fresh ingredients.” For an independent, he says, “it’s a lot of effort to create, test and maintain consistency,” but it is worth it, as sauce sales directly relate to meat sales at Summerhill.

Indeed, cross-merchandising is key to effectively promoting and selling readymade cooking sauces, so it’s important to ensure sauces are displayed close to the foods they’re meant to accompany.

In-store sampling is another huge way to boost sauce sales. “By giving customers samples, you take the fear out of the possibility that they will purchase something they do not like,” says Bonina.

Nona Vegan’s Gilchrist, who often partners with grocers to offset costs associated with sampling, adds that by offering a sampling station near the products, you create a footpath to the products themselves. “Customers get to see where our sauces live [in the fridge] in store as well as why they live there. People love to know that it’s a fresh product.”

This new generation of ready-made cooking sauces can offer exciting globally inspired flavours, high-quality, clean ingredients and the convenience of not having to make sauces from scratch.

Is it any wonder today’s multicultural, health-savvy, busy Canadian consumers are gobbling them up? Perhaps it’s time for Canadian grocers to get saucy and invest more space, time, and resources into their ready-made cooking sauce stock and sales strategies.

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AISLES that will be assembled and ready for pick up by the time they’re finished shopping, suggests Jo-Ann McArthur, president of Nourish Food Marketing. “Or provide a DIY card if they want to assemble it themselves,” she says. “Cheese, like wine, can be intimidating, so the more you can guide them the better.”

SAMPLING SELLS Tasting is believing, and research shows that those who try will feel more obliged to buy. “But don’t leave unidentified cheese to dry up on plate,” says Chiasson. “Have someone there who is enthusiastic about the product, and offer recipe options too.” If you must leave cheese samples unattended, make sure they’re displayed with toothpicks, kept at the proper temperature and clearly labelled.

SWEET DREAMS ARE MADE OF CHEESE

Six ways to make your specialty cheese sales soar

By Rosalind Stefanac NOW THAT MORE PEOPLE are travelling and tasting unique cheeses from around the world, they’re more apt to experiment at home, too. Here’s how to encourage shoppers to take a chance on fine and specialty cheeses at the grocery store.

TRAIN YOUR STAFF Customers appreciate staff who can know­ledgeably talk about products and where they come from. Make a point to meet with your team regularly to discuss your latest cheeses and make sure they are all tasting the products, says Diane Chiasson, a Toronto-based food merchandising and retail expert. “They should be able to tell customers if [the cheese] is pungent, salty or sweet and what it pairs well with,” she explains.

“Customers will trust someone who’s tried the product and can talk confidently about it.”

58

November 2018 Canadian Grocer

PROVIDE PERFECT PAIRINGS Ensure there are some great cheese accompaniments situated close to your display. Think beyond crackers and jams to baguettes, nuts, honey and dark chocolate (the latter pairs well with sweet cheeses). If you carry alcohol, suggest wine pairings; even if you don’t, customers will appreciate suggestions about which wines or other beverage options complement particular cheeses.

MAKE IT EASY For busy customers, convenience is king.

Have a variety of pre-made cheese trays on hand, especially during the start of weekends and holidays when shoppers are more apt to entertain. Make sure you have smaller cuts of cheese handy for the budget-conscious or impulse shopper.

And consider providing a checklist of cheese options for customers to fill in

PROMOTE LOCAL Remember, you don’t have to go too far to find interesting new cheeses. All-natural, artisanal cheeses from Quebec and Manitoba, for example, are considered among the best in class. Plus, customers love to support their local markets.

Lynne Roy, manager, product marketing at Manitoba-based Bothwell Cheese, says today’s shoppers are always on the lookout for natural cheeses with a “clean” label (i.e., no modified milk, artificial colours/flavours or preservatives).

“Customers are seeking local, Canadian products and are gravitating towards brands that offer transparency in their food supply, which to them represents higher food safety standards,” she says.

When possible, invite the cheese maker to your stores to speak to staff and customers about new products and their cheese-making process. CG

NATHAN ELSON

CHEESE MERCHANDISING

CREATE TANTALIZING DISPLAYS Showcase unique or seasonal cheeses at the centre of your display with various heights using jars and boxes, says Megan Potgieter, category manager for cheese, deli and pre-pack meals at Pusateri’s Fine Foods. Think about grouping colours such as bright yellow cheeses to “create a romantic fall feel,” she adds. Cheese displays that are interesting, neat and abundantly stocked are the most inviting. And don’t forget to place the pairings (such as crackers, jellies, etc.) within easy reach. “It’s really about creating excitement through your displays that will draw people in,” says Potgieter.

A GOOD SNACK SET STRATEGY · · · ·

#1 Brand Premium Quality Delicious Flavours & Taste BEST $ RING & A ‘HEALTHY’ VARIETY 454g Value Packs

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PRODUCT OF CALIFORNIA PEANUT FREE ® 2015 Blue Diamond Growers. All Rights Reserved

An Excellent Source of Vitamin E, an important antioxidant.

A Good Source of Fibre and Protein.

NEW ON SHELF!

Whether it’s snacks, beverages or baby food, these new product innovations are sure to liven up any grocer’s aisles.

GET IT WHILE IT’S HOT!

Canadians love the comfort of a hot beverage. Whether it’s coffee, tea or even hot chocolate, it’s a profitable category. And while coffee is clearly the most popular by far—roast and ground coffee reached nearly $1.36 billion in sales over the past year—tea’s no slouch either, at nearly $240 million in sales overall. This Nielsen data reveals what’s hot and what’s not so hot in the hot beverage aisle.

Hot beverages - 52 weeks, ending August 18, 2018 $ Sales

$ Vol % Chg

Units

Units Vol % Chg

1,357,009,426.0

2

125,378,401.7

0

COFFEE - ROAST & GROUND - COFFEE GRIND GROUP - EXTRA FINE GRIND

11,482,244.0

-6

1,352,730.9

-3

COFFEE - ROAST & GROUND - COFFEE GRIND GROUP - FINE GRIND

107,310,607.0

0

9,206,517.8

3

COFFEE - ROAST & GROUND - COFFEE GRIND GROUP - OTHER COFFEE GRIND GROUPS

262,728,132.0

-9

29,471,999.2

-9

COFFEE - ROAST & GROUND - COFFEE GRIND GROUP - REGULAR / ALL PURPOSE GRIND

834,414,737.0

5

74,232,510.9

2

COFFEE - ROAST & GROUND - COFFEE GRIND GROUP - WHOLE BEAN

141,073,706.0

4

11,114,642.9

5

175,899,207.0

7

37,141,273.0

5

2. HOT CHOCOLATE

55,017,498.0

-4

10,038,207.1

-2

HOT INSTANT TEA

3,351,821.0

18

598,571.0

46

239,776,003.0

1

50,326,154.4

0

165,011,558.0

0

30,940,026.0

-2

74,764,445.0

4

19,386,128.4

3

8,332,854.0

-12

1,662,786.1

-1

COFFEE - ROAST & GROUND

SPARKLING ICE: CLASSIC LEMONADE AND PINK GRAPEFRUIT Bubbly beverage brand offers two new flavours Sparkling Ice has introduced two new flavours in Canada: Classic Lemonade and Pink Grapefruit. As part of the Talking Rain Beverage Company portfolio, Sparkling Ice combines natural flavours and sparkling water to create a tasty, fruity, lightly-carbonated beverage line.

1. COFFEE - INSTANT

TEA TEA - CAFFEINE PRESENCE - CAFFEINATED TEA - CAFFEINE PRESENCE - DECAFFEINATED

OH SNAP! HOTTIE BITES AND DILLY BITES

TEA - FLAVOUR - CHAI

Packaged, single-serve pickle snacks in two crunchy varieties

TEA - FLAVOUR - CHAMOMILE

GLK Foods has launched its Oh Snap! Pickling Co. Hottie Bites and Dilly Bites in Canada.

These two varieties of bite-sized pickle slices (either spicy or dill flavoured) come in a singleserve package without added brine, making these crunchy snacks less messy to eat.

TEA - FLAVOUR - EARL GREY INCL. GREEN EARL GREY TEA - FLAVOUR - ENGLISH BREAKFAST

6

3,098,500.4

2

5,576,820.0

2

894,756.9

3

19,621,282.0

-4

4,086,334.2

-6

3,733,550.0

228

283,118.7

205

76,555,325.0

-2

13,196,344.9

-5

95,538,835.0

3

23,388,054.4

3

5,309,385.0

7

1,352,838.4

5

TEA - TYPE OF PRODUCT - LOOSE TEA

10,540,307.0

30

1,186,108.6

21

TEA - TYPE OF PRODUCT - REGULAR TEA

82,479,321.0

-2

14,245,078.4

-4

TEA - TYPE OF PRODUCT - SPECIALTY TEA

146,756,375.0

2

34,894,967.4

2

TEA - FLAVOUR - PEPPERMINT

Baby Gourmet’s Salmon & Veggie Pot Pie is a new organic baby food made with carrots, parsnips, spinach and Atlantic salmon. Con­ taining 390 mg of omega-3s, it’s ideal for parents who want to introduce baby to new flavours through a nutritious “gourmet” meal.

2,363,420.4

4

3. TEA - FLAVOUR - MATCHA

TEA - FLAVOUR - OTHER FLAVOURS TEA BAGS

Innovative new organic fish dish for babies

5

TEA - FLAVOUR - GREEN

4. TEA - FLAVOUR - ORANGE PEKOE

BABY GOURMET SALMON & VEGGIE POT PIE

7,726,249.0 17,381,703.0

1 Is instant back in style? The instant

coffee category increased in dollar sales by 7% overall for the latest 52 weeks ending Aug. 18.

2 Hot chocolate has seen hotter days: dollar sales for hot chocolate overall decreased by 4% to $55 million.

3 Although matcha may only represent a small portion of overall tea sales at $3.7

million (out of the nearly $240-million tea category overall), matcha’s dollar sales growth has been phenomenal at a whopping 228% this year.

4 Of all the tea varieties, traditional

orange pekoe is still on top at $76.5 million in sales. That said, orange pekoe’s dollar sales have decreased by 2%.

SOURCE: NIELSEN, NATIONAL, ALL CHANNELS, ALL SALES, EXCLUDING N.L.

60

November 2018 Canadian Grocer

AISLES

Milk’s makeover

FAIRLIFE Coca-Cola made a splash by launching a milk called Fairlife in the U.S. in 2012; recently, it brought the brand to Canada.

(With the Canadian launch came the news that Coca-Cola would open a milk production facility in Peterborough, Ont. by 2020.) Fairlife is touted as being “ultrafiltered,” which, the company says, leads to more protein and calcium in the finished product.

It’s not just a simple choice of 2%, skim or homo packaged in bags, jugs or cartons anymore. Faced with the rising popularity of plantbased “milks,” traditional cow’s milk appears to be getting a hip makeover in an effort to bring people MILK2GO back to dairy, with aFeaturing variety of new attractive, trendy packaging, Saputo’s Milk2Go premium, organic, grass-fed and/ brand includes a line of 310-mL or 473-mL single-serve or flavoured milks showing up inmilks in a wide variety of flavours, including chocolate, strawberry, the market—often in innovative vanilla, banana, cookies & iced coffee new and plain and environmentallycream, friendly white milk (in 1% or 2%). is also available in packaging. Here areMilk2Go some ofnowthe six-packs of 200-mL size shelfor white milk, new premium milksstable outchocolate there: ideal for kids’ lunches.

ORGANIC MEADOW Packaging innovation

Guelph, Ont.’s Organic Meadow has introduced two new flavoured milks to its organic, grass-fed line: Organic Grass Fed Cold Brew Coffee Milk and Organic Grass Fed Chocolate Milk. The chocolate variety is flavoured with organic fair trade Camino cocoa, while the coffee milk is blended with organic fair trade cold brew coffee and organic cane sugar.

LACTANTIA

JOYYA Saputo is launching a brand new protein-rich, “ultrafiltered” milk called Joyya. Available in eye-catching bottles of 0%, 2% (white and chocolate) and 3.25% varieties, the Montreal-based company describes Joyya as “fresh milk from Canadian dairy farms that passes through a series of fine filters,” a process that boosts the natural protein content and reduces lactose.

Lactantia PūrFiltre milk (from Parmalat Canada) is now available in innovative new easy-to-handle bottles. The result of three years of intensive research, these bottles are recyclable, as are their certified BPA-free resealable caps. The caps have a “temper evidence safety ring” to ensure food safety, while the cap and bottle both feature a light barrier to help protect the milk’s integrity.

EBY MANOR Eby Manor Golden Guernsey milk is produced on the Eby family farm, located just north of Waterloo, Ont., solely by Guernsey cows.

Maintaining that “Guernseys produce the best milk possible,” Eby Manor’s owners note that milk from Guernsey cows is naturally higher in beta-carotene, omega-3 and A2 casein protein.

November 2018 Canadian Grocer

61

CHECKING OUT George Condon

THE SEAWEED SOLUTION

Is seaweed-based packaging the answer to the scourge of ocean plastic?

ENVIRONMENTALISTS will tell you the scourge of the world’s landfills, oceans and waterways is plastic. In particular, it’s discarded plastic bottles and those plastic rings that hold six-packs together.

According to National Geographic, of the whopping 8.3 billion metric tons of plastic the world has produced, 6.3 billion metric tons has become plastic waste.

And of those 6.3 billion tons, only 9% has been recycled, which means 79% of the world’s plastic ends up in landfills and, ultimately, the oceans.

A report from the Ellen MacArthur Foundation, a U.K. non-profit, predicts that “by 2050 the world’s oceans will contain more plastic than fish,” if the dumping continues at its current levels.

Grocers contribute to this pollution because of the huge amounts of plastic-wrapped food and beverages they sell, including bottled water. They sell

62

November 2018 Canadian Grocer

these items because of shopper demand, of course—yet it’s a bit of a mystery as to why many consumers still choose to regularly buy bottled water.

With some exceptions, bottled water is virtually unnecessary for daily use in most parts of Canada. Most municipalities test their drinking water stringently and the standard for purity is higher than the standards for industrial water used by water bottlers. Tap water is regulated by Health Canada and provincial governments, with water being tested for specific harmful substances constantly, while bottled water falls under the Food and Drugs Act, which doesn’t set limits on specific contaminants but simply says products can’t contain “poisonous or harmful substances” and need to be prepared in sanitary conditions.

Nevertheless, the world is waking up to the potential environmental crisis.

Nestlé Waters has reduced the amount of PET plastic in its bottles by 40%, and water filter companies such as Brita tout the fact that a container of filtered water can prevent some 300 plastic bottles from entering the environment.

But this is just scratching the surface.

New and innovative technology is now tackling the problem head on, and some real solutions may be on the horizon.

For instance, a startup called Skipping Rocks Lab believes we can just skip plastic bottles entirely. The company has developed a capsule for transporting water called Ooho that is not only biodegradable, it’s edible. The startup was founded by three design students in London. As the technology news website Extreme Tech explains, “They started thinking about the way water is stored and consumed after working on a program to collect and repurpose plastic bottles. They looked to nature to come up with a better way, eventually settling on a membrane structure. Membranes are used throughout nature because they’re efficient—think cells, fruit, and eggs.”

Ooho’s membrane is composed mainly of seaweed, whereby the membranes are a gelatin composed of sodium alginate from seaweed and calcium chloride, and are molded into a pouch. Each pouch of water costs only about two cents to produce, and because the membrane is entirely organic it can be eaten after the contents have been consumed.

Skipping Rocks Lab’s website says Ooho pouches biodegrade in four to six weeks. Although Ooho is good for water, milk, juice and other liquids, its short shelf life, at least at this time, limits its use in grocery. Instead, it’s being marketed for use at special events like concerts and sports.

Water in plastic bottles will undoubtedly still be in use for a while—but if membrane technology continues to evolve, it may eventually replace plastic in grocery stores. CG

George Condon is Canadian Grocer’s consulting editor.

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

SKIPPING ROCKS LAB

Ooho is a “package” that’s both biodegradable and edible

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CATEGORY

captains 2 018 An Industry Leadership Supplement from Canadian Grocer

Canada’s #1 Cheese Manufacturer!*

The #1 Natural Cheese brand in Canada brings to you a wide variety of cheese offerings such as block, feta, slices, shreds & snacks in delicious flavours like Habanero, Jalapeno, Herb & Garlic, try your pick!

The delicious creamy taste you know and love from P’tit Québec available in a wide assortment of convenient formats including block, slices, shreds, and snacks to enjoy in varieties of mild to old cheeses

New look, same great taste of Philly – with no artificial flavours or colours!

A new lunch box friendly cheese dip and breadstick snack from the brand you trust! *Nielsen MarketTrack, National GDM All Sales, L52 weeks, PE Sept 22nd 2018

CHEESE THE RETAIL MARKET FOR CHEESE PRODUCTS in Canada is approximately a $3.8 billion business and has grown 3% percent over the last year.1 One of the largest factors driving this category growth within the Canadian grocery market is the increased rise of snacking behaviour among consumers in their dayto-day lives2. As consumer preferences have shifted from the typical three meal routine to snacking more frequently throughout the day, the types of food they are choosing as snacks is also changing drastically.2 Canadians have been choosing foods that are fresher and less processed, and thus it makes perfect sense that cheese has been ranked by consumers as one of the top 5 snacking foods in North America.2 For example, an 18g portion of natural cheese can have up to 5 grams of protein and 15% of your daily value of calcium.3 This is right on trend for cheese manufacturers as 51% of

consumers say they have a form of protein with every meal and 1 in 5 also say that they monitor their daily intake of protein.4 As the lives of consumers have become busier, demand for snacking foods that are convenient but also fit within dietary restrictions, have also increased.5 Manufacturers have started to adapt to consumer’s needs by providing new offerings that are healthier, convenient, and in ready-to-eat formats such as single serve cheese or dairy products, shredded cheese, and cheese slices.6,2 1 Nielsen MarketTrack GB+DR+MM, Total Cheese, L52Wks ending September 30, 2017 2 Snacking Beyond the Snacking Aisle: How to take a bite out of Canada’s Snacking Demand, Nielsen 3 KraftHeinz ULC. “Nutrition Label of Cracker Barrel Cheese Portions 168g”.

Ingleside, Ontario. 2017 4 Battle of the Animal & Plant-based proteins: insights on diet preferences, Nielsen 5 What’s in our food and on our mind: Ingredient and dining-out trends around the world, Nielsen 6 Shake-up in the snack aisle, Canadian Grocer, 2017

CHEESE AND YOGURT DRIVING CONSUMPTION WITHIN THE DAIRY CASE Total Dairy*: $9.1B Dollar growth: +2% Tonnage growth: +0% Inflation: +2

DOLLAR % CHANGE TONNAGE % CHANGE

CHEESE* $3.8B

3 Inflation

3

MILK $2.6B

+2

Total Eggs: $1.0B Dollar growth: +0% Tonnage growth: +5% Inflation: -5

YOGURT $1.6B

EGGS $1.0B

-1

0

0

-2

-5

Mintel’s Cheese – Canada, October 2014 report revealed that

49%

of respondents cited ‘made with natural ingredients’ as an important factor when buying cheese

5

2

1

+0

NATURAL INGREDIENTS ARE ON THE RISE!

6%

Promote natural

2011-2012

Source: Nielsen MarketTrack, National All Channels, 52 weeks ending April 29, 2017 *includes random weight

21%

August 2016

Source: © 2017 Mintel Group Ltd. All Rights Reserved.

Confidential to Mintel.

MEAT, DAIRY AND EGGS ARE THE PRIMARY SOURCES OF PROTEIN FOR CANADIANS Top 5 protein sources – consumer survey

82%

MEAT

ANIMAL PROTEIN

66%

DAIRY

63%

EGGS

PLANT BASED PROTEIN

31%

FISH/ SEAFOOD

20%

LEGUMES/ NUTS/SEEDS

Battle of the Animal & Plant-based proteins: insights on diet preferences, Nielsen

SPECIAL INFORMATION FEATURE

CATEGORY CAPTAINS 2018

WE BRING SOMETHING

good TO THE TABLE.

Good service. Good insights. And most importantly, good food.

Our approach is simple: connect retailers with the foods Canadians are craving, fueled by market trends and delivered with a smile.

With one of the highest fill rates in the industry, we keep your shelves stocked and your most profitable customers satisfied.

HELPING CANADA EAT WELL AND LIVE WELL

@TreeLifeCan

@TreeofLifeCan

Tree of Life Canada

treeoflife.ca

FISH AND SEAFOOD ACROSS CANADA, FISH AND SEAFOOD continue to be staples, with nearly 9 in 10 Canadians eating fish, and three quarters of Canadians eating seafood. And while the pursuit of a healthier lifestyle is top-of-mind, the #1 reason consumers are choosing fish and seafood today is because they enjoy the taste, followed by the betterfor-you attributes such as a good source of healthy fats, and its heart-health benefits.1 While price remains a factor, almost half of Canadians prioritize ease of prep when choosing fish and seafood.1 Time-lacking consumers are seeking convenience, so retailers who are armed with a strong assortment of easy to prepare frozen fish and seafood will win customer loyalty. Two out of three Canadians have purchased frozen fish and seafood in the last 6 months1 – a testament to its convenience and versatility. Keep

assortments heavy in popular items such as salmon, cod, and shrimp.

Freshness remains top of mind with almost 75% of consumers expressing more interest in frozen fish and seafood when it has a “flash frozen” claim2 – a familiar idea from its use in frozen fruit and vegetables.

Sustainability and fishing practices remain a priority with a third of consumers actively seeking third party verifications that indicate if sustainable fishing practices have been used.

Fish and seafood continue to remain an important part of Canadians’ day-to-day diet, however shifts in consumer preference are towards taste, convenience, freshness and sustainability.

1. Mintel Canada, Fish and Seafood, November 2017 2. Tree of Life Canada, November 2017

REASONS FOR EATING FISH/SEAFOOD

80%

55%

38

%

36

%

ATTRIBUTES CONSUMERS ARE LOOKING FOR WHEN PURCHASING FISH AND SEAFOOD

47%

36%

EASY PREPARATION TASTE

GOOD FATS

MEAT SUBSTITUTE

HEART HEALTH

Source: Lightspeed/Mintel. Base: 1,780 internet users aged 18+ who ate fish and/or seafood in the past six months

WILD-CAUGHT SUSTAINABLY -CAUGHT

29 % FISH AND SEAFOOD EATEN IN PAST 6 MONTHS AT HOME

14% PRE SEASONED OPTIONS

Source: Lightspeed/Mintel. Base: 1,780 internet users aged 18+ who ate fish and/or seafood in the past six months

66% Salmon 53% Tuna 34% Cod

61% Shrimp

30% Haddock

28% Scallops

26% Tilapia

28% Crab

25% Halibut

27% Lobster

24% Sole

20% Mussels

22% Trout

15% Octopus/Squid

12% Alaskan Pollock

15% Oysters

7% Seabass

14% Clams

Source: Lightspeed/Mintel. Base: 2,000 internet users aged 18+

SPECIAL INFORMATION FEATURE

SHOPPING DECISION FACTORS Total importance, top 4 choices

Easy to prepare 70%

A healthy meal 62%

Great tasting 59%

Fast to prepare 59%

Source: Tree of Life Canada, November 2017

CATEGORY CAPTAINS 2018

WE BRING SOMETHING

good TO THE TABLE.

Good service. Good insights. And most importantly, good food.

Our approach is simple: connect retailers with the foods Canadians are craving, fueled by market trends and delivered with a smile.

With one of the highest fill rates in the industry, we keep your shelves stocked and your most profitable customers satisfied.

HELPING CANADA EAT WELL AND LIVE WELL

@TreeLifeCan

@TreeofLifeCan

Tree of Life Canada

treeoflife.ca

HEALTH & WELLNESS FOR MANY, FOOD HAS BEEN THE GATEWAY into the immense health & wellness movement we are currently experiencing; a movement that has captivated consumers and created a desire for a better, cleaner way of living. This is an exciting time for industry disruptors and game-changers alike, whose innovation is landing on grocery store shelves. Organic food plays a significant role in this new landscape continuing to outpace overall grocery growth and showing no signs of slowing down. As of 2017 the organic food, beverage and alcohol market in Canada totaled $4.4 billion, with +8.4% compound annual growth rate since 2012.1 As organic food continues to evolve, industry specialists have gained insight into how the category is shopped and what is driving it forward. Families with children are key organic consumers, with 72%

purchasing organics weekly.1 Their confidence in organics being the safer choice drives them to fill 1/3 of their shopping baskets with organic foods. While cost continues to be a deciding factor when purchasing organics, income is not a key indicator of organic purchasing. There is minimal difference between light/ medium/heavy organic food shoppers and the various income levels, further confirming that intentional organic purchases are based on personal values relating to health.1 With organic food cemented into shopper’s baskets, retailers who participate in the continual health & wellness evolution will assuredly capture ongoing growth opportunities into the future.

1 Canadian Organic Trade Association, November 2017

CONSUMERS WHO SAY “FOODS WITH ORGANIC/NATURAL CLAIMS... ARE SAFER”

ORGANIC FOOD, BEVERAGES AND ALCOHOL MARKET

$4.4 billion* 8.4% annual growth 2012 - 2017 *estimated sales value

44%

ORGANIC MARKET SHARE

1.7%

40%

33%

2.6%

2012

2017

MOTHERS

Food and beverage market share of total market within mainstream retailers

PARENTS

NOT PARENTS

Source: Lightspeed/Mintel. Base: 1,418 internet users aged 18+ who purchase organic or natural foods or beverages

Source: Canadian Organic Trade Assoc report, November 2017

ORGANIC PURCHASER TYPE

BY INCOME BRACKET, 2017 100 80 60 40

<$40k

$60 - <$100k

$40 - <$60k

$100k+

Minimal difference across hi/lo income brackets for “Light” and “Heavy” shoppers

20 18% 17% 28% 24%

24% 24% 21% 27%

23% 20% 19% 19%

36% 39% 33% 30%

Light buyer

Medium buyer

Heavy buyer

Does not buy organics

0

Note: Light buyer (1-9% of weekly grocery budget spent on organics), Medium buyer (10-24%of weekly grocery budget spent on organics), Heavy buyer (25+%of weekly grocery budget spent on organics) Source: Canadian Organic Trade Association Ipsos Consumer Poll, 2017

SPECIAL INFORMATION FEATURE

CATEGORY CAPTAINS 2018

PEANUT BUTTER PEANUT BUTTER DOMINATES THE SPREADS aisle with $260 million of annual sales.1 In the past year, the category has declined moderately with dollar sales -3% and tonnage volume -5%. As prices transitioned to de-emphasize aggressive discounting part way through the year, the category has become inflationary which is a positive shift looking forward. Regular stabilized peanut butter is the large majority (81.5%) of category sales with natural peanut butter as the second largest segment. The nut-based spread is a staple of Canadian pantries, with penetration that grew to 75% this year.2 It is on trend with consumers as peanuts are a plantbased protein.3 In addition, consumers have a renewed interest in breakfast as “the most important meal of the day”4, but while peanut butter is mostly consumed

at breakfast, 44% of usage still occurs throughout the day as part of a meal or as a snack,5 so it is important to maximize size and package variety listings on shelf.

Retailers should also ensure a proper assortment of value and premium brands to meet different purchase behaviour and basket makeup; consumers who purchase value and control label brands are focused on cost-savings products, while consumers who purchase premium brands purchase more fresh produce and are looking for healthy and quick snack and meal solutions.

1 Nielsen MarketTrack, National All Channels, L52W ending August 18, 2018 2 Nielsen Homescan, L52W ending January 6, 2018 3 Food Navigator: “A Fundamental Shift: Nuts Crack Healthy Fat Demand”, Katy Askew, 2018 4 Nielsen Consumption Diary, National, L52W ending 2016 – Q3, Homemade 5 JMS Dig Insights Spreads U&A Report, August 2015

PEANUT BUTTER 3–YEAR TREND

$ Volume

$266,615,086 (-1%)

55,512,446

57,947,296 (+4%)

55,200,359 (-5%)

L52W 2 years ago

L52W year ago

L52W

Volume Tonnage (KG)

$268,543,043

$259,821,277 (-3%)

Source: Nielsen MarketTrack, National All Channels, L52W Period ending August 18, 2018

DAYPART CONSUMPTION

% Eating weekly or more often during each daypart

10%

after dinner

56%

at breakfast

4%

PEANUT BUTTER SEGMENTS: Regular vs Natural $ Volume

$48,108,685 (+6%) 18.5%

at dinner

Natural/Unsalted Peanut Butter

8%

between lunch and dinner

81.5%

11%

$211,712,592 (-4%)

at lunch

11%

Regular Peanut Butter

between breakfast and lunch Source: JMS Dig Insights Spreads U&A Report, August 2015

SPECIAL INFORMATION FEATURE

Source: Nielsen MarketTrack, National All Channels, L52W Period ending August 18, 2018

CATEGORY CAPTAINS 2018

Introducing NEW pod flavours and sizes from Canada’s #1 Coffee Manufacturer W NE

MAXWELL HOUSE

W

NE

NABOB

Decaf 30ct

Organic Reserve 30ct

#1 selling 12ct mainstream decaf SKU

Very few Organic SKUs within pod format

House Blend 60ct

100% Columbian 55ct

Top selling Maxwell House pod flavour

Top selling Nabob pod flavour

TASSIMO is one of Canada’s leading Single Serve brewing systems. With 7 different brands to choose from and a vast assortment of beverage varieties, TASSIMO is perfect for all occasions

SINGLE SERVE COFFEE THE COFFEE CATEGORY IS WORTH over $1.2 billion in annual retail sales.1 Coffee is the most consumed beverage in Canada, outpacing even tap water, with 71% of Canadians aged 18-79 drinking coffee yesterday.2 Retail continues to be a top channel for coffee purchase, with 76% of past-day Canadian coffee drinkers aged 18-79 consuming in-home, compared to 44% out-of-home.2 Single serve coffee machines have made it more convenient for consumers to enjoy their coffee at home. Single serve coffee now represents over 40% of total coffee category sales1 with two brewer types accounting for 99% of the market: Keurig/Keurig compatible brewers and TASSIMO, with 75% and 24% dollar share, respectively.3

Within pods, the category continues to shift to larger pack sizes, with 21-30 count packs growing 41% in the latest 52 weeks, now accounting for 50% of the K-Cup/ Pods category.4 Dedicating the proper space in-store to both brewer types as well as large pack formats will ensure you fulfill your single serve consumer’s drinking needs.

1 Nielsen MarketTrack, NAT XNFLD GB +DR +MM - All Sales – “TL INST & R&G & ON DEMAND COFFEE” L52W Period ending Sept 22, 2018 2 Coffee Association of Canada, Canadian Coffee Drinking Study – 2017 Infographic, Dig Insights, Jan 2018 3 Nielsen MarketTrack, NAT XNFLD GB +DR +MM - All Sales – “TL ON DEMAND COFFEE” L52W Period ending Sept 22, 2018 4 Nielsen MarketTrack, NAT XNFLD GB +DR +MM - All Sales – “TL K-CUP/POD ON DEMAND COFFEE” L52W Period ending Sept 22, 2018

COFFEE DOLLAR GROWTH

COFFEE DOLLAR SALES

The coffee category is worth over $1.2 billion, with single serve representing over 40% of the category $1,400

Single serve coffee growth is outpacing Roast & Ground, growing over $10M in retail in 2017 $11,193,471

Millions

$1,050

$5,510,695

$700 $350 $0

$-1,847,018 L52 Wks 2Yr Ago

L52 Wks Yr Ago

TL Roast & Ground

L52 Wks

TL On Demand

TL on demand

TL Roast & Ground TL Inst Coffee

TL Inst Coffee

Nielsen MarketTrack, NAT XNFLD GB +DR +MM All Sales L52W Period ending Sept 22, 2018 vs. YA vs 2YA

SALES DOLLARS

Two brewer type account for 99% of the single serve market: Keurig/Keurig compatible brewers with 75% and TASSIMO with 24% dollar share

Nielsen MarketTrack, NAT XNFLD GB +DR +MM All Sales L52W Period ending Dec 30, 2017

LARGER PACKS EXPERIENCING BIG GROWTH 21-30 CT K-Cup/Pods have grown 41% in the latest 52 weeks, growing over $55MM in each of the past two 52 week periods

1%

$189,917,016

24%

$134,529,753

$73,694,988

75%

K-Cup/Pod

Tassimo

Other

Nielsen MarketTrack, NAT XNFLD GB +DR +MM - All Sales “TL ON DEMAND COFFEE” - L52W Period ending Sept 22, 2018

SPECIAL INFORMATION FEATURE

L52W 2YA

L52W YA

L52W

Nielsen MarketTrack, NAT XNFLD GB +DR +MM - All Sales “TL K-CUP/POD ON DEMAND COFFEE 21-30 CT (LARGE)” L52W Period ending Sept 22, 2018 vs. YA vs 2YA

CATEGORY CAPTAINS 2018

â&#x201E;˘

Upgrade to the Heinz Ketchup of Mayo

800mL Light Glass Jar

675mL Regular Squeeze Bottle 800mL Regular Glass Jar

Delicious, rich and creamy taste that could only come from Heinz Made with high quality ingredients like 100% Canadian free-run eggs No artificial flavours, colours or preservatives* Breakthrough packaging: offered in an egg shaped glass jar and a convenient squeeze bottle *Like all mayonnaise in Canada

VISCOUS THE VISCOUS* MARKET IS A $210 MILLION category, and has grown +3.2% in sales dollars in the last year.1 Growth in the category is driven by innovation within mayonnaise and aiolis, addressing the changing consumer trends and behaviour to bold flavours2 and products with real ingredients.

The mayonnaise category has benefitted from fresher, less processed, and authentic offerings as consumers are willing to pay a premium for these attributes.3 More recently, the move to 100% Canadian free-run eggs has yielded similar growth.

Aiolis have been increasing in importance on menus in restaurants and on grocery store shelves, driving

double digit sales growth4 and an increase in household penetration5 over the last year. The introduction of aiolis has continued to increase given the rise of dipping occasions and meal enhancers, for which the squeeze formats have been best suited. Aiolis encourage a strong future for the viscous category as users upgrade to premium offerings, and explore exciting new flavours while experimenting with meals.

1 Nielsen MarketTrack, TL Viscous $ Sales, L52W, Period ending August 25 2018 2 Datassential Menu Tends – October 2016; Mintel - Condiments & Dressings, 2015 3 Nielsen Global Health and Ingredient Sentiment Survey Q1 2016 – Canadian respondents 4 Nielsen MarketTrack, Aioli $ Sales % Chg, L52W, Period ending August 25 2018 5 Nielsen Homescan, National, L52W Period ending March 31, 2018 versus year ago * Viscous category is made up of mayonnaise, aiolis, and spoonable salad dressings.

TOTAL HOUSEHOLD PENETRATION

80.7%

80.6%

79.3%

2016

2017

2018

Source: Nielsen Homescan, National, L52W Period ending June 23, 2018 v YA, 2YA

CONSUMER ATTITUDE TOWARDS CONDIMENTS AND SEASONINGS

MAYONNAISE & AIOLI ARE GROWING

“How much do you agree or disagree with the following statements about condiments and seasonings?”

$55,993,190 (-2%)

“I would pay more for premium condiments” (% agree)

$147,342,298 (+4%)

46%

45%

$6,345,501 (+35%)

40%

40%

DOUBLE DIGIT TH G R OW

Mayonnaise Aioli Men

Women

18-44

45+

Source: Lightspeed/Mintel. Condiments and Seasonings – Canada, April 2018.

SPECIAL INFORMATION FEATURE

SSD (Spoonable Salad Dressings) Source: Nielsen MarketTrack, $ Sales, L52W, period ending August 25, 2018.

CATEGORY CAPTAINS 2018