Canadian Grocer - Sept 2017

Matt Lurie, CEO of Organic Garage

THE ORGANIC ISSUE Matt Lurie’s ambitious plans for Organic Garage P. 32 P.32

AMAZON’S PUSH INTO GROCERY P. 21

SEPTEMBER 2017

Organic Foods Report P. 37 P.37 Meet Tia Loftsgard, Organic Champion P. 6 P.6

CONTENTS COVER STORY

September 2017

ORGANIC GROWTH

32

Volume 131 Number 6

OPINIONS

With a new store and more in the works, Organic Garage is on a roll

40

6

05 Front Desk 18 Eating in Canada 46 Checking Out PEOPLE

06 Tia Loftsgard Meet Canada’s champion of organic foods

08 The Buzz Comings and goings, store openings, awards, events etc.

IDEAS

11 Calling all butchers, bakers ...

How grocers are dealing with the skilled labour shortage

14 Pop-up power A look at how four grocers are jumping on the pop-up trend

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15 A first look at Lidl A peek inside the German discounter’s new U.S. stores

AISLES

37 It’s onwards and upwards for organic foods

COVER IMAGE: JAIME HOGGE; THIS PAGE FROM TOP CLOCKWISE: JESSICA DEEKS, JAIME HOGGE, CAPTURELIGHT/GETTY IMAGES

FEATURES

THE AMAZON EFFECT 21

How big a threat is Amazon, really?

SELLING SENTIMENT 27

Don’t count out greeting cards just yet!

Consumers’ appetites for all things organic continues to grow

40 Water world

27

Plant-based waters are making waves in the beverage aisle

42 Ready. Set. Bake!

The state of the baking needs category

FRESH

44 Something special The next big thing(s) in specialty produce

Q&A WITH TOM BARLOW 30

We chat with the CFIG head on everything from independents to competition and the need for collaboration

FOLLOW US ON @CanadianGrocer Canadian Grocer Magazine @CanadianGrocerMagazine

September 2017 Canadian Grocer

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ORGANICS IN THE SPOTLIGHT These days, organic foods are big news and big business YOU’VE LIKELY HEARD a lot of chatter about organic food lately. Since news broke in midJune that the world’s biggest online retailer plans to swallow up the world’s most prominent organic grocer, there has been endless speculation about what this means for the sector. Will Amazon use its considerable clout to make organics more broadly available to consumers? Will it diminish standards for organics or raise the bar? All, of course, remains to be seen.

Also making news is the Canada Organic Trade Association’s (COTA) new The State of Organics report. The report reveals that big gaps in organic regulations persist across our country with a handful of provinces adopting national standards while others (including Ontario and Alberta) have none at all.

While it’s clear the organic industry has some issues to tackle, it’s also clear the sector is thriving. Over the past decade, organics have experienced double-digit growth and are now worth about $4.7 billion in Canada.

It’s no secret why. Consumers pursuing healthier lifestyles are seeking cleaner, sustainable, more transparent foods. To these folks, organics fit the bill. Consider the numbers: more than 55% of Canadian consumers purchase organic products on a weekly basis

THE SECTOR IS THRIVING. OVER THE PAST DECADE ORGANICS HAVE EXPERIENCED DOUBLE-DIGIT GROWTH AND ARE WORTH ABOUT $4.7 BILLION and more than 80% of these consumers have maintained or increased their organic purchases in the last year, according to the new COTA report.

So, we thought it was a good time for us to shine a light on organics. In this issue, meet Matt Lurie, the CEO of Organic Garage. With a new store, Lurie is in expansion mode and on a mission to bring affordable organics to consumers (pg. 32). And see why Tia Loftsgard (pg. 6), head of COTA, wants to work more closely with retailers. Finally, our organic foods report (pg.37) reveals how grocers and manufacturers are responding to a growing appetite for organics.

Welcome to our Organic Issue!

Shellee Fitzgerald

Executive Editor sfitzgerald@ensembleiq.com September 2017 Canadian Grocer

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PEOPLE

Who you need to know

The Facts Who Tia Loftsgard Position Executive director, Canada Organic Trade Association (COTA) What’s New? Retail membership for grocers

NATURALBORN LEADER Tia Loftsgard, executive director of COTA, is a passionate and powerful voice for the organic sector

By Rebecca Harris Photography by Jessica Deeks

PEOPLE

T

ia Loftsgard was a “city kid” living in Regina, Sask., when she left town at 17 to work on a voluntary, year-long pro ject with Mennonites in Hutchinson, Kan. Though she worked in a nursing home, Loftsgard says her time in the community got her acquainted with simple living and sustainable agriculture, and woke her up to issues in trade and development (the Mennonites founded fair trade in the United States in the 1940s).

The experience led Loftsgard to pursue a bachelor of human justice at the University of Regina. “I wanted to look at the exploitation that was happening with so many food products we consume,” says Loftsgard, now executive director of Ottawa-based Canada Organic Trade Association (COTA).

As part of her studies, she did a teaching internship in a farming village in India and spent 10 months investigating maternal health in tea plantation workers in Sri Lanka. While Loftsgard saw lots of great development work happening internationally, she realized where she could really make a difference was in North America, educating and helping change consumer behaviour.

That realization led her to co-found La Siembra Co-operative and the Camino brand in 1999, bringing the first fair trade and organic cocoa, sugar and hot chocolate products to market in North America. “We proved the model was in demand and that people care where their products come from,” says Loftsgard.

After 10 years at Camino, Loftsgard joined Fairtrade Canada as director of business development. From 2013 to 2016, she was chief operating officer of Fairtrade America. When the executive director position at COTA opened up, Loftsgard threw her hat into the ring.

“The two areas that I love are organic and fair trade, and to be able to run COTA was pretty ideal,” she says.

Loftsgard helms the organization at a time when the $4.7-billion Canadian organic market continues to grow, but also faces the challenges of increasing domestic supply, building on its success in international markets and voicing the sector’s needs in Ottawa.

30 SECONDS WITH...

Loftsgard also sits on the governance advisory council for the new national food policy. COTA is recommending the policy must develop a comprehensive strategy to boost organic production, conserve and enhance agricultural biodiversity, and protect agricultural land. It’s also calling for measures to eradicate food insecurity and hunger and support access to local, sustainable food.

While the policy is led by the Department of Agriculture and Agri-Food, it also involves Environment Canada and Health Canada. “There are both health reasons and environmental reasons why people are buying and growing organic, so I’m excited the government is experimenting with working on this new model with cross-departmental feedback,” says Loftsgard.

Another key issue for COTA is provincial regulations—or lack thereof. Federal rules apply only to organic products that are imported, exported, traded across the provinces or that bear the Canada Organic logo. Those growing and selling only within their own province must abide by provincial regulations. However, some provinces, including Ontario, Alberta and Saskatchewan, don’t have provincial organic regulation.

“When you don’t have a provincial regulation in place, there is the possibility of more fraud happening,” says Loftsgard.

“Each province and territory should have its own regulations to make sure organic means organic within our country.”

Aside from having a strong voice in Ottawa, Loftsgard wants COTA to work more closely with grocery retailers, and has introduced a new retailer category to its membership structure. “The grocery chains are very involved in organic and we want them to have a seat at the table,” says Loftsgard.

For this year’s Organic Week (Sept.

16 to 24), COTA’s goal is to have 3,500 retailers bringing the campaign to life in-store with activities and messaging.

COTA is also doing a big media push to raise consumer awareness. “Organic is growing by leaps and bounds in grocery … and the more the sector comes together under campaigns such as Organic Week, the more growth we’re going to see,” says Loftsgard. CG

TIA LOFTSGARD Why do you feel so passionate about organic farming?

My passion for organic ties in deeply with my love for the environment, delicious food and love of healthy living. Living in a farming village in India, I realized that organic was the norm as people had been farming this way for hundreds of years.

Respect for the environment and seeing food as medicine was a way of life. I viewed farming and food very differently after this experience and became passionate about organic and sustainable farming.

What is your favourite organic food?

I can’t just pick one! But if I had to, I would have to say tomatoes.

When you eat an organic tomato compared to a non-organic tomato, the flavour difference is huge.

What do you like best about your job?

There’s always something new and different, from working on a marketing campaign to presenting at the Standing Committee on Agriculture to fundraising to travel. It’s also kind of a feel-good job because I’m doing something positive for people and the environment.

What is your secret to success?

Don’t sweat anything—the small stuff or the big stuff—because it doesn’t help. There have been big challenges that I’ve had to face head-on and everything usually works out.

September 2017 Canadian Grocer

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THE BUZZ This new Toronto Metro store has an urban feel

The latest news in the grocery biz

OPENINGS

« A new Metro grocery store opened in Toronto’s trendy West Queen West neighbourhood this June. The store boasts unique design features including brushed concrete floors, stainless steel accents, an open loftlike ceiling and subway inspired tiling on key feature walls.

Costco has been busy this summer.

The warehouse club opened two new locations in July, one in Vaughan, Ont. (the city’s second Costco store) and another in Orillia, Ont.

AWARDS At its first Annual Summit, DCI handed out half a dozen Star Awards. Among the winners: Country Grocer (DCI Retailer of the Year) and Sun Valley Market (DCI Social Responsibility Award).

»

Beth Newlands Campbell has been named president of Rexall Drugstore. Most recently, Newlands Campbell was president of Sobeys’ Ontario, Atlantic division.

McCain Foods is getting a new CEO. Max Koeune, currently the frozen food giant’s CFO will take over the top job from Dirk Van de Put when he heads to Mondelez International to succeed Irene Rosenfeld in November.

Pierre Lampron has been elected president of Dairy Farmers of Canada. Lampron takes over from Wally Smith.

Corporate Knights magazine has included Federated Co-operatives Ltd., and Loblaw Cos. Ltd. on its list of the Best 50 Corporate Citizens in Canada for 2017.

Burnaby, B.C.-based Whistler Glacial Spring Water received the coveted “Superior Taste Award” from the International Taste and Quality Institute in Brussels, Belgium in June.

People for the Ethical Treatment of Animals (PETA) awarded Loblaw a Certificate of Appreciation for signs it posted in its parking lots this summer reminding customers to not leave children or animals in hot cars.

A Canadian company received a Gold Sofi award at the Specialty Food Association’s Fancy Food Show this summer in New York. Thornhill, Ont.’s Fruit of the Land took home the prize in the honey category for its Gideon Springs Pure Raw Honey—Avocado Blossom. Sofi, which stands for Specialty Outstanding Food Innovations, is a top honour in the specialty food industry.

« 8

September 2017 Canadian Grocer

DCI Star Award winners Peter Cavin, Country Grocer (top) and Jim and Vicki Bexis, Sun Valley Market (bottom)

METRO: CAMERON MCLELLAN, REXALL, FRUIT OF THE LAND, DCI

COMINGS AND GOINGS

THE BUZZ

ANNOUNCEMENTS

EVENTS The CHFA East Conference and Trade Show will be held September 14–17 at Metro Toronto Convention Centre.

Visit CHFA.ca for more details.

1 Sept. 19-20 Le Salon des dépanneurs du Québec will be held from September 19–20 at Place Forzani in Laval, Que. Visit SalonDEC. com for more details.

The Star Women in Grocery Awards Breakfast takes place on Sept.

21 from 7:30 to 10:30 a.m. at The International Centre in Mississauga, Ont. The event is a celebration of our 16 Star Women winners for 2017. Visit CanadianGrocer. com for info.

The Canadian Coffee and Tea Show takes place from Sept.

24–25 at the Toronto Congress Centre. For more information, go to CoffeeTeaShow.ca.

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GIVING BACK 1. After hosting a Charity Golf Classic this past June that raised more than $6,500, DCI and Canadian Federation of Independent Grocers presented a cheque to four-year-old Madi on behalf of Variety Village. The presentation was held at Sun Valley Market in Toronto.

2. Food and Consumer Products of Canada’s (FCPC) 5th Annual Charity Golf Tournament raised more than $14,500 for Food Banks Canada. Since 2013, the FCPC tournament has raised more than $75,000 or 200,000 meals for the charity.

3. Galleria Supermarket handed out $31,500 in scholarships to 31 deserving students at a ceremony at its Thornhill, Ont. store in July.

Galleria initiated the scholarship program in 2005 to help students in the community reach their goals.

Above left: (Clockwise from top) Vicki Bexis, Sun Valley Market; Marc Fortin, DCI; Jim Bexis, Sun Valley Market; Madi; Joe Sawaged and Tom Shurrie, CFIG Above right: (Left to right) Michael Graydon, FCPC; Erin Filey-Wronecki and Lauren Rosenfeld, Food Banks Canada; Jamie Moody, Tree of Life Canada Below: Galleria Supermarket’s 2017 scholarship awards

McEwan Group has announced it will open a new two-level McEwan grocery store at One Bloor East, at Toronto’s Yonge and Bloor intersection.

McEwan’s third location is expected to open at the end of 2018 and will offer gourmet food and services.

Family-owned and operated Coppa’s Fresh Market, has announced its plans to open a new location in downtown Toronto, in a neighbourhood that’s home to the Air Canada Centre and the Rogers Centre. Coppa’s Fresh Market currently has four locations in the Greater Toronto Area.

Canada Bread Company is closing its Calgary bakery on Sept.

8. The company says the bread made at the Calgary facility will be baked at other bakeries in Western Canada.

About 60 employees are impacted by the closure.

DEALS Metro has acquired a majority stake in Montreal-based meal kit service MissFresh. The grocer says MissFresh’s three co-founders will continue to take an active part in the company’s management.

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DCI, FCPC, GALLERIA

CELEBRATING

Save-On-Foods celebrated the grand reopening of its downtown Fort McMurray store on August 11.

The store was forced to close in May 2016 when a wildfire tore through the Alberta town. Save-OnFoods opted to completely renovate and update the location, which includes an expanded bakery and production area, full-service pharmacy and made-in-store sushi.

September 2017 Canadian Grocer

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Visit gopenske.ca or call 844-831-2445 to learn more.

IDEAS

Retailers, suppliers, shoppers, insights

LABOUR

PHIL BOORMAN/GETTY IMAGES

Skilled Help Wanted To find skilled workers, grocers are strengthening local connections and widening their search

By Mary Baxter

W

hen Highland Farms opened its new store in Vaughan, Ont. in March, owner and president Charles Coppa added skilled meat counter staff from another store with plans to train more from within the ranks.

Coppa pays close attention to maintaining skilled workers in his business because throughout Canada, skilled butchers, bakers and cooks have become scarce even while demand for their services grows.

The shortage is symptomatic of a widespread difficulty of attracting younger generations to the trades. For five consecutive years, the Manpower Group’s global talent shortage survey has listed skilled trades as the area most acutely affected, and in 2015 identified chefs, bakers and butchers among the toughest workers to find. How acute is the shortage in Canada? During the first quarter of 2017 alone, more than 2,350 positions in need of skilled bakers, chefs and retail or wholesale handlers of meat and fish went unfilled, according to Statistics Canada.

September 2017 Canadian Grocer

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IDEAS

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September 2017 Canadian Grocer

Ideas worth stealing FRESH FROM THE ROOF An IGA in the Montreal borough of Saint-Laurent is taking “buy local” to new heights. IGA Extra Famille Duchemin has installed an organic garden on its rooftop where it grows about 35 types of produce including tomatoes, cabbage, radish, cauliflower and four types of kale. The produce grown on the 25,000-sq.-ft.-rooftop garden has received organic certification and is sold in the store under the brand “Frais du toit” (fresh from the roof). Two TV screens placed next to the produce broadcast the message: “live from the roof” and show shoppers images of the rooftop garden’s progress.

The rooftop is also home to eight beehives.

COLOUR-CHANGING LABELS TO CUT FOOD WASTE “How long has that been in there?” and “Is it still okay to eat?” is a conundrum faced by most consumers at some point when assessing their refrigerators’ contents. U.K. grocer Sainsbury’s is helping to remove the guesswork with the launch of “smart” labels on its house brand cooked ham slices. A label on the front of the package changes colour (from yellow to purple) the longer the package has been open, giving consumers a clearer indication of the product’s freshness. The new label initiative aims to reduce the amount of good food being tossed out and is part of the retailer’s “waste less, save more” consumer program.

ROBOT SHELF HELP To help keep its shelves in impeccable order, Schnucks Markets is testing robots. At three of the retailer’s St. Louis, Mo. stores, Tally the robot has been employed to roam the aisles three times a day to detect out-of-stocks, low stocks, misplaced items and pricing errors. Created by Simbe Technologies, the autonomous, aisle-scanning robot provides real-time information to Schnucks’ staff so they can quickly address issues and keep customers happy.

IGA EXTRA FAMILLE DUCHEMIN

Attracting skilled meat handlers is particularly challenging.

“The Canadian Meat Council [recently] did a survey of 15 rural [meat processing] plants and we could have hired almost 1,500 people the next day if we’d had them,” says Ron Davidson, the council’s senior vice-president, international trade and public affairs.

For family-owned VG Meats in Simcoe, Ont., which produces farm-to-fork beef for its own and other stores specializing in local product, part of the solution involves hiring skilled workers from around the world through the Ontario Immigration Nomination Program. “It gives us skilled people right away,” says Kevin Van Groningen, one of VG’s co-owners.

In-house training is the other component and, in 2014, the family launched Chop School, a two-week course that paid students to learn. The family whittled hundreds of applicants down to 12 students; each cost $14,000 to train. Of those, four left early on and four stayed on to work in the business. “The other four were gobbled up by other competitors,” says Van Groningen.

The next year, the family trained people for smaller butchers with those businesses footing the costs. VG has since partnered with London, Ont.-based Fanshawe College to provide hands-on experience for the college’s culinary programs.

Colleges are key sources of skilled workers and training to help staff upgrade skills. Many offer accredited baking and cooking programs as well as retail meat cutting instruction.

As well, colleges often offer placements and internships.

Fanshawe’s new pre-apprenticeship retail meat cutting program, for instance, requires students to do a 12-week paid work placement and comes with a small wage subsidy for employers.

Similar placements occur in the college’s bakery and culinary programs and local grocers often host students. “Grocers are doing some pretty cool stuff that many students who are going out to some restaurants wouldn’t necessarily get the experience or exposure to,” says James Smith, chair of the college’s school of tourism and hospitality.

Colleges also deliver customized corporate training that can address a specific need in a minimum amount of time. “We recently worked with Sobeys in southern Ontario and did cake decorating for their bakers across their sector,” says Craig Youdale, dean of the Canadian Food and Wine Institute at Niagara College.

To help businesses finance training, the Institute taps into the Canada-Ontario Job Grant program.

Correspondence and online training opportunities are available too, such as the Baking Association of Canada’s correspondence course that includes components on cake and bread making.

Forging local connections might present alternative solutions, as Vincenzo’s specialty market in Waterloo, Ont., discovered. To create an edge in its takeaway foods, the store’s owners partnered with restaurant chefs to offer “pop-up” lunches rather than add kitchen staff. “It gives us an opportunity to not only become a destination for prepared foods and foods to take out, it gives a lot of local restaurants opportunities to make our customers aware of their business,” says Carmine Caccioppoli, Vincenzo’s co-owner.

The bottom line is to consider your skilled labour recruitment strategy as a long-term investment, says Van Groningen.

And keep in mind that offering just a job is no longer enough, adds Keith Müller, a chair in Conestoga College school of business and hospitality. “If young people see a career path in this, they’re more inclined to stay.”

IDEAS PARTNERSHIPS

WHAT YOU MISSED AT…

Getting crafty

DCI HELD ITS FIRST ANNUAL SUMMIT IN TORONTO RECENTLY. HERE’S WHAT WE LEARNED:

A unique store-within-a-store concept is brewing at a Nova Scotia Sobeys

By Donalee Moulton

LIKE GROCERY STORE CUSTOMERS across the country, shoppers at the Sobeys in Elmsdale, N.S., can stock up on all the essentials. Unlike customers anywhere else in the country, however, they can also purchase craft beer and cider directly from a microbrewery inside their local supermarket.

The Halifax-area store now houses the Chill Street Fresh Beer and Cider Market.

Here, customers can sample a Honey I’m Home brown ale or a Skinny Dippin’ apple cider along with foods that pair perfectly with them. “Craft beer is a hot product these days, and we felt having Chill Street brewing onsite would be a draw to our store as well as offer an added convenience for our customers,” says Sobeys’ spokesperson Shauna Selig.

The combination of convenience and buying local appeals to customers, says Chill Street owner Barry MacLeod. “We can’t keep up.”

MacLeod, who initially approached Sobeys about setting up a shop within their shop two years ago, says the unique business model allows both companies to stand out from the crowd. “It’s a way for us to differentiate ourselves from the competition,” he says.

Products from the two stores are closely connected. Chill Street relies on food

pairings and samplings to reinforce the connection between great drinks, great food and great times. For example, if an India pale ale (IPA) is on the Chill Street sampling menu, it might be paired with burgers or carrot cake—both enhance the IPA flavour—the makings for which are available in the grocery store only a few feet away. Also available: recipes showing how craft beer can be incorporated into a variety of dishes.

The intent of the market, which opened in June, is educational as well as entrepreneurial. It also adds a touch of theatre to the shopping experience as shoppers can witness the microbrewery in action. Four vessels holding 11,000 litres operate non-stop behind a glass partition. Every can, grunter, crowler and growler is sold directly from the brewing vessel for maximum freshness. “They can see us brewing every beer they buy,” says MacLeod.

For Sobeys, the partnership may be unique, but the model is not. Selig points out that the grocery chain has partnerships with several companies across the country such as Bento, Nutella, and Starbucks. “We are always looking for opportunities to offer our customers choice and convenience,” she says, “and Chill Street is an extension of that offer.”

Chill Street’s Barry MacLeod

GENERATIONAL DIVIDE Presenting results from a Dalhousie University study on Canadians’ eating habits, Dr. Sylvain Charlebois talked about the relationships generations have with food. While boomers and millennials want and like to cook, gen-Xers are “the lost food generation.” Born at a time— between 1965 and 1976—when food wasn’t very interesting, and without the inspiration served up by food television, this group has never learned how to cook.

Grocers may be able to reach genXers with meal kits or by showing them, as much as possible, how to use particular products.

WHAT’S UP WITH BEER? Sleeman Breweries’ Lisa Jones spoke about big beer trends; for instance, how bottles have lost ground to cans, which are now dominating the market. Although representing small slices of the overall market, cider and craft beer are growing, driven by consumers’ desire for something “different.” And what age group drinks the most beer? Consumers aged 50 to 59.

CHILL STREET FRESH BEER AND CIDER MARKET

SMALL IS THE NEW BIG Take note of the little guy! Carman Allison, Nielsen’s VP of consumer insights, talked about a changing CPG industry and how smaller manufacturers are driving growth in Canada, accounting for 25% of consumer packaged goods.

September 2017 Canadian Grocer

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IDEAS

PUSATERI’S

BITE GROCER & EATERY Bite Grocery & Eatery, a communitycentric grocery store in Calgary, held its first pop-up this summer, hosting mid-century furniture store, Bex Vintage.

“We created further allure in our space, supported the local ‘pop-up’ culture and gave a vendor the opportunity to showcase its products in a premium environment,” says Bite’s general manager, Philip Wong. Vintage shopping may have little connection to grocery, but that was the point. “The hope was to gain some new exposure for Bite through the Bex clientele,” says Wong. And anything a retailer can do to attract new customers is just good business.

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September 2017 Canadian Grocer

THE MUSTARD SEED CO-OP

Pop-up Power Pop-up stores are the new differentiator— here’s how four grocers are jumping on the trend

The Mustard Seed Co-op’s recent pop-up highlighted the Hamilton grocer’s commitment to fair trade. Showcasing fair trade suppliers, products and in-store demos, the pop-up created an environment for customers to learn about these products, increased sales for the Co-op and attracted new customers.

“Events like this do bring in additional foot traffic to our store, and our members also learn more about food supply issues,” says Mary Lou Tanner, chair of the Co-op’s board.

By Day Helesic

NATURE’S EMPORIUM Nature’s Emporium has been hosting pop-ups for years. Working with vendors including Vega, Genuine Health and Manitoba Harvest, the Ontario health food grocer uses pop-ups as a way to engage with customers. “It’s a fresh, dynamic experience for our customers, typically combined with excellent promotional pricing,” says Ryan Dennis, director of communications at Nature’s Emporium.

Not only do pop-ups encourage regular customers to experiment with new products, but they’re also a draw for new customers. A recent in-store activation with Vega included major prize giveaways and activities that included a build-your-own superfood bowl station, which was tied to an Instagram photo contest.

CLOCKWISE FROM TOP LEFT: PUSATERI’S, MUSTARD SEED CO-OP, NATURE’S EMPORIUM, BEX VINTAGE

Co/Lab, Pusateri’s pop-up program turns the mundane task of grocery shopping into a special experience. Pusateri’s has hosted restaurants and bakeries such as Rosen’s Cinnamon Buns, North Poké, Pukka, and Baker and Scone at its Toronto-area locations. “The rotating pop-ups showcase the city’s best chefs, bakers and restaurateurs and puts them on the main stage in our stores for our guests,” says Paolo Pusateri, manager of brand marketing at Pusateri’s.

The activations are a key part of the grocer’s strategy. Angus McOuat, VP of merchandising and marketing at Pusateri’s says: “We want to continue to push the boundaries and create an in-store theatre of food for our guests.”

IDEAS

DISCOUNTERS

A first look at Lidl Shopper focus and product flexibility driving Lidl’s U.S. push

RAM COMMUNICATIONS

By Ron Margulis My grandfather, a passionate grocer for more than 30 years, had two major predilections when it came to running stores. He demanded that all floors, walls and windows be spotless, and that there was the right mix of natural and artificial light to highlight the quality of the products being sold without blinding the shopper. If the recently opened stores I visited in Virginia are any indication, he would have loved Lidl.

The German discount grocer, known in Europe for pricing its products up to 50% below the competition, is aggressively bringing its concept to North America with a distinct twist. Like its European counterparts, Lidl’s store brands will account for 90% of the retailer’s products in the U.S. locations. Unlike many of the stores in Europe, however, the U.S. outlets are less confined and much brighter.

The front entrances seem to arc skyward, giving them an almost church-like feel, plus plenty of windows adjacent to the checkouts and over the sides of the stores let in copious amounts of sunlight.

The Lidl stores in the United States are about 20,000-sq.-ft., which is one-third larger than the retailer’s biggest stores

in Germany and the United Kingdom, but less than half the size of most of its full-line supermarket competitors.

This smaller footprint is designed to take advantage of the industry trend toward convenience and quick customer response and was validated by a series of focus groups the retailer conducted prior to its U.S. debut.

The product mix at the newest Lidl stores is 90% store brands and 10% national brands, which include several leading centre-store lines such as Tide and Coca-Cola, as well as more limited frozen offerings. The Lidl private label lines include a standard range covering most subcategories, plus the premium Preferred Selection, a curated variety of fresh and frozen proteins as well as dry grocery items.

In the fresh areas, the stores feature local produce like blueberries and eggplant from eastern North Carolina and lettuce from northern Virginia that is merchandised in the original packaging.

The dairy/deli area is almost entirely private label and includes a respectable selection for each subcategory. There are three free-standing cases of proteins,

with about 20 SKUs each of fish (fresh and frozen), meat (mostly beef, but also a few lamb and pork selections) and chicken. Finally, there is a fresh bake unit that bakes products throughout the day: doughnuts, muffins, pizza breads, pretzels and baguettes.

The traditional centre-store areas will be familiar to most shoppers; altogether, there are six wide aisles of packaged food items, along with aisles for pet food, household goods, and health- and beauty-care items. There are several organic and gluten-free options across the food categories and there are specials on almost every endcap. The beer and wine departments are comprehensive, carrying any selection a shopper could want.

The stores also carry limited-time general merchandise items in a section called “Lidl Surprises” offering items as far-ranging as power tools, fitness gear, apparel, appliances, toys and furniture.

There were croquet and badminton sets available during the opening week of the Richmond, Va., stores in late July, as well as juice squeezers, shower curtains and a wide variety of back-to-school items.

While the current product assortment has been thoroughly scrutinized to cater to shopper preferences in each market, the company’s leadership is quick to note products will continue to be added and deleted to optimize the assortment.

“We are going to be very flexible with the product mix, so what you see in the stores today could change as we adapt to our shoppers needs and wants,” explains Brendan Proctor, president and chief executive officer of Lidl U.S., while at one of the Richmond grand openings. Proctor added that the marketing approach is based on making shopping less complex and less expensive without sacrificing quality or choice.

Proctor, an Irishman who has racked up retail experience at home and on the continent, also says the company is sourcing a variety of products both locally and within North America. The deciding factors for these supply relationships are price and quality.

The nine stores in Virginia join 12 others in North and South Carolina as the first of as many as 100 the retailer plans to open along the East Coast by the end of the year.

Analysts are estimating the company will have more than 300 stores in the United States by 2020.

September 2017 Canadian Grocer

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IDEAS POLL RESULTS

LIDL 101 One of the more interesting elements of Lidl’s launch in the United States is a magazine the company produced to introduce the concept to U.S. shoppers. It’s more than 80 pages in length, and includes easy-to-understand visuals and helpful hints for both shopping at the stores and cooking the products at home.

Inside the summer issue are tips on how to cook select cuts of beef and chicken, lists of what items are needed for a summer barbecue and how to organize a pantry. Another section offers “Lidl Life Hacks” with clear explanations, for instance, of ways to keep produce fresher for longer.

The magazine also features a map to show how the stores are laid out and gives descriptions of the procurement process.

More than just recipes and tips, the Lidl magazine features information that helps to position Lidl as a good neighbour.

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September 2017 Canadian Grocer

ARE YOU READY FOR AMAZON?

IDEA GENERATOR

Infarm The farm of the future has arrived.

Berlin-based start-up Infarm has developed an indoor vertical farming system that grows herbs, veggies and even fruit. Produce is grown in modular containers that are monitored by multiple sensors and fed by an Internet-controlled irrigation and nutrition system. With the potential to be installed in grocery stores, restaurants, shopping malls and schools, Infarm’s “precision farming” allows consumers to harvest their own food.

Already in European supermarkets, the system’s appeal continues to grow thanks to rising consumer demand for more fresh, sustainable produce.

Not only is the Infarm system chemical- and pesticide-free, the growing season is yearround and the distance between farmer and consumer is minimal.

Since Amazon’s June announcement of its intention to purchase Whole Foods Market for US$13.7 billion, volumes have been written about the impact the sale might have on the grocery industry and how grocers might compete with the online giant. Amazon is already the largest e-commerce retailer in Canada, ringing up nearly $3.5 billion in sales in 2016, according to a recent BMO Capital Markets report. Given this new threat, do you plan to step up your e-comm efforts?

We asked readers on CanadianGrocer.com:

Will the Amazon/Whole Foods deal speed up your plans to introduce e-commerce and/or a delivery service?

42%

Absolutely. This is the push we needed to step up our efforts.

39%

Not necessarily. You can’t rush into these things and it’s important we find the right balance.

19%

No. We already offer the services that best meet our consumers’ needs.

GRAPHIC CART: SHUTTERSTOCK, LIDL, INFARM

Proctor shared some of the retailing philosophies Lidl is basing the concept on, many of which come from the retailer’s learnings in Europe. These include the confluence of lower prices and a less complex shopping experience, as well as creating a sense of trust that a supermarket operator needs to have with customers. To acclimate managers to the Lidl approach, Proctor sent several of them to train in Europe to see the concept in action.

“Really the key to the store is curating a limited assortment of high-quality products, providing the best available prices and having a team that has been trained to be very engaged with the shoppers,” he says.

My grandfather used to quip that his job as a retailer was to make it as easy as possible for shoppers to buy from his store and as hard as possible to buy from his competitors. Lidl appears to have taken this mantra to heart.

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EATING IN CANADA Kathy Perrotta

TIME TO COURT OLDER CONSUMERS Older Canadians are growing in numbers and have money to spend. It’s time we paid them more attention THE CANADIAN MARKETPLACE is dominated by older consumers, or those aged 50+, who currently represent more than a third of the population and control the lion’s share of spending and investible assets. Although the food and beverage industry disproportionately focuses on courting younger demographics, Canada is getting older. Now is the time to come to the aid of maturing consumers.

According to 2016 census data, the median age of the Canadian population is 41.2 years. As a result, there are more

wellness will shape their food and beverage preferences such as fresh, less processed, real and premium. Such changing preferences signal that approaches to aging are evolving and marketing to these consumers requires a holistic point of view. It is critical, for example, to understand that two-thirds of Canadians aged 50+ report engaging in physical activity two or more times per week.

Key to evaluating the 50+ opportunity is recognizing that the households of this segment are smaller. More than twothirds (70%) of these consumers live in one- or two-person households, with more than 85% of them making eating and drinking decisions in an environment free of the influence of kids.

While decisions on what to eat and drink are considerably less motivated by kid-friendly solutions, portability and saving money, the concepts of convenience and value remain staunchly entrenched in decision-making for the 50+ folks.

As Canadians age, those 50+ eat more often at home; however, eating at home more does not necessarily correlate with an increase in cooking from scratch.

These consumers are as likely as those in the under-50 segment to report consuming a fully prepared, ready-to-eat option for dinner. Remember, these consumers are in many ways the inventors of easy and speedy solutions and, as such, are

Approaches to aging are evolving and marketing to these consumers requires a holistic point of view Canadians over age 65 (5.9 million) than there are under age 13 (5.8 million). This aging trend is attributable to the first boomers turning 65 (over the past five years), as well as longer life expectancy and continuing low fertility rates. If projections hold true, by 2061 there will be 12 million seniors in Canada, and just eight million children.

The 50+ segment will eat, shop and live differently than past generations.

Focused on living vibrantly, health and

18

September 2017 Canadian Grocer

increasingly relying on solutions offered through various outlets such as the home meal replacement (HMR) section at the grocery store. These consumers are also more likely to choose premium products and they also report a willingness to pay more for specialty items that meet specific dietary needs.

While overall, 50+ consumers are less likely to report food allergies, when compared to those in the under-50 segment, more than half (54%) report having medical conditions, including diabetes, high blood pressure/hypertension and high cholesterol. Concerns over medical conditions influence their food and beverage choices, so it’s not surprising that those age 50+ are most concerned about sodium (24%), followed by sugar (15%) and calories (14%). These 50+ consumers are also more likely to consume products that are low fat, high in vitamin D and fibre and have whole grain attributes.

When evaluating beverage consumption patterns, individuals 50+ differ considerably from their younger counterparts, with far fewer choices comprising their somewhat limited consideration set. While they are more likely to drink coffee, tea and diet soft drinks, older consumers are less apt to consume fruit juice, milk, sports or energy drinks, and cold coffees.

The takeaway: Don’t overlook these 50+ consumers. They are growing in numbers, moving towards higher quality food and beverage experiences and, importantly, have tremendous buying power. There are opportunities for companies and brands that connect with these consumers, particularly as they seek to make conscious choices to ensure their aging is accompanied by a fulfilling and quality lifestyle. CG

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

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Congratulations to the 2017 Star Women Award Winners

We’re proud Gold Sponsors of Canadian Grocer’s sixth annual Star Women Awards, recognizing women who have demonstrated expertise, innovation, vision and leadership in the grocery business.

In today’s ever-changing sales and marketing industry a lot of companies talk a big game about where they live along the “path to purchase,” but they’re often only one stop along the way. At Acosta/Mosaic we know the road because we live on both sides of it, and are continually changing the direction it’s going. Help us continue to plot the course to success. We’re committed to building a strong, creative and diverse workforce.

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FEATURE

not so fast Amazon’s purchase of Whole Foods poses what Loblaw’s Galen G. Weston calls a “very different and compelling” threat to established grocers, but experts believe several factors could mitigate the damage

DENNIZN/SHUTTERSTOCK

By Chris Powell

AMAZON’S US$13.7 billion purchase of Whole Foods Market is expected to have a seismic impact on the North American grocery sector, although experts believe we’ll see nothing more than a few minor tremors in the early going.

Guelph-based analyst Kevin Grier says any new competitor, particularly one as powerful as Amazon, poses a threat to incumbents such as Loblaw and Metro. However, he adds that the Amazon/Whole Foods partnership

is unlikely to change the balance of power in Canadian grocery as long as brick-and-mortar stores remain the dominant shopping channel.

Amazon may be unrivalled online, but Grier says e-commerce still represents an “extraordinarily small” part of Canadian grocery (less than 1% of the $120-billion industry, according to Queen’s University Investment Counsel’s Canadian Grocery Market Report). And with just 13 stores in Canada—most located in September 2017 Canadian Grocer

21

FEATURE Toronto and Vancouver—Whole Foods is a minnow compared to behemoths like Loblaw and Metro.

“It’s hard to be overly concerned about putting the two of them together,” says Grier. “[E-commerce] is probably going to grow, but the rate of growth will be very slow. Canadians don’t seem to be too interested in Internet grocery shopping.”

Loblaw Cos. Ltd. chairman and CEO Galen G. Weston acknowledged Amazon as a “very different and very compelling” threat to Canadian grocers during an August analyst call, but said he expects Loblaw to benefit from “five or six years” of market intelligence on the impact of these new business models on its U.S. counterparts before they arrive here.

Weston also noted that, with some

We asked experts to weigh in on what the Amazon/Whole Foods deal could mean for some of Canada’s grocery retailers, and what moves they can take to maintain their competitiveness.

exceptions, Amazon has largely failed to completely eradicate established players in the new categories it has entered. “[It’s] not because these formats or these concepts are not incredibly powerful and incredibly innovative,” said Weston. “It’s because the retailers who are facing these threats respond. They make strategic changes, they take costs out of the business, they change the way that they meet customer demands, and you should expect us to do similar things.”

Other prominent CEOs share Weston’s view that the so-called “Amazon Effect” has been overstated. “I think the impact is probably a little overplayed in terms of the magnitude and speed with which it might effect the overall industry,” said outgoing Mondelez International

SOBEYS U.S.-based supermarket expert Phil Lempert (AKA: The Supermarket Guru) says Sobeys, in particular, has done a “great job” of developing its “grocerant” concept in recent years, which will help it compete against a possibly beefed-up Whole Foods offering. “They’re well positioned and really in the right space in that sector,” he says.

LONGO’S Robin Sherk, vice-president of North American e-commerce and Canadian retail insights for Kantar Retail, says the Toronto-area chain’s established e-commerce platform, Grocery Gateway, could help it fend off any online challenge from Amazon. “Amazon would have to do some pretty aggressive things to convert shoppers from that customer relationship,” says Sherk.

However, she says Longo’s could still be vulnerable because its brand promise— an emphasis on quality and value— is similar to that of Amazon/ Whole Foods.

22

September 2017 Canadian Grocer

COSTCO A recent report from U.S. research firm eMarketer Retail said the warehouse store has several key advantages that will make it hard for Amazon to poach its customers, including its hugely popular rotisserie chickens (it reportedly sells 80 million a year in the U.S. alone) its hot-dogand-a-drink deal, and a strong relationship with farmers. One potential weakness: A relatively weak e-commerce offering, which accounted for less than 3.5% of its sales in fiscal 2016.

FEATURE CEO Irene Rosenfeld in an interview on CNBC’s Squawk on the Street in August.

But Phil Lempert, a California-based grocery expert known as “the Supermarket Guru,” says Amazon’s expansion into grocery adds an element of cool to what has been a relatively staid business.

“The same way that Amazon has hacked book selling … this is what we’re going to see come to the grocery world,” says Lempert.

Amazon has been coy on how it plans to integrate Whole Foods, but Lempert predicts its first move will be lowering prices—particularly since the retailer’s reputation for high prices (exemplified by the enduring nickname “Whole paycheque”) doesn’t jibe with Amazon’s value proposition.

He predicts Amazon will also transform Whole Foods locations into pick-up depots for its 10-year-old AmazonFresh grocery service. It will also install Amazon lockers in those locations, enabling customers to pick up other products they’ve purchased from Amazon on their way out of the store.

Lempert calls these changes the “lowhanging fruit” for Amazon, predicting it will be anywhere from 18 to 24 months before it begins incorporating some of the technology it uses in its online business in the grocery retail space.

IGD Canada program director Stewart Samuel predicts e-commerce will be one of the first things Amazon focuses on in Canada, pointing out that Whole Foods stores are perfectly suited to serve as

pick-up locations for AmazonFresh or a similar service.

Bill Bishop, a principal in U.S. consultancy Brick Meets Click, says Amazon’s arrival could create some urgency among Canada’s established grocers to bolster their e-commerce operations, which have traditionally lagged behind those of their U.S. and European counterparts.

That still may not be enough to prevent Amazon from using its e-commerce expertise to corner the online market.

According to Bishop, one way the incumbents could compete is by improving in-store experiences, whether through intangibles such as enhanced customer service, or more visible changes such as enhancing their deli sections or fresh departments. CG

THE BIG GUYS—LOBLAWS, METRO, SOBEYS, ETC. Stewart Samuel, program director of IGD Canada, says the Amazon/Whole Foods partnership will likely force the country’s largest grocery chains to accelerate investment in two key areas: E-commerce and natural and organic foods. Samuel says despite its relatively small store footprint, Whole Foods could serve as a launch pad for the 10-year-old AmazonFresh service when it finally arrives in Canada. “With the Canadian retailers in the early days of their own e-commerce rollouts, they may want to get out in front of any moves by Amazon,” he says.

THE CANADIAN INDUSTRY AS A WHOLE Phil Lempert says Canadian grocers will likely have two to three years to prepare for Amazon’s entry into the market. He recommends they take that time to research and address emerging customer preferences, particularly around key areas like traceability and sustainability.

The Whole Foods acquisition also provides Amazon with a stable of established private label brands in the natural and organics sectors, says Samuel.

“Expect to see a stronger focus on private brand development in this area,” he says.

NATURAL FOOD GROCERS Kantar’s Sherk says Amazon could “democratize” Whole Foods by making its private label brands available online. This could pose a potential threat to retailers that court customers interested in natural wellness, such as the Toronto-area chain Organic Garage. Amazon could also potentially exploit their relative weakness in e-commerce, says Sherk. “They’re adding convenience to that value message as well: You can get those natural products at a good price.

Oh, and we’ll deliver them to you in two days if you’re a [Amazon] Prime member.”

September 2017 Canadian Grocer

23

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Greeting Cards Brad Van Laare, Director of Sales, Carlton Cards, shares insights about premium card consumers and why they are so important to your store Who is the premium card consumer?

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FEATURE

Selling Sentiment The greeting card market is down but not out, and there’s opportunity for grocers to boost sales

By Rebecca Harris

CAPTURELIGHT/GETTY IMAGES

IN A WORLD OF E-CARDS and Facebook

well wishes, the good old-fashioned greeting card is facing a big challenge: staying relevant.

According to research firm IBISWorld, the use of e-cards, e-mail and social networking sites has impacted demand for traditional greeting cards and postcards.

Over the five years to 2017, the greeting card market in Canada is forecast to decline at an annualized rate of 4.4%, to $431 million. From 2018 to 2022, the sector is projected to continue its steady decline, albeit at a slower rate (-0.6%).

“As these additional means of con-

necting have proliferated, consumers have become decreasingly willing to spend money on greeting cards,” says Anya Cohen, an analyst at IBISWorld.

“As a result, greeting card companies have offered lower-priced cards, which has also contributed to a decline in industry revenue.”

Those in the industry downplay the threat of digital communications. Carlos LLansó, president of the Greeting Card Association (GCA) and CEO of Legacy Publishing Company, believes social media is actually helping the sector. “I don’t see social media replacing greeting

cards. It actually adds to our category,” he says. For example, platforms such as Facebook let people find out about life events such as someone having a baby or a friend’s parent passing away, which may lead them to send a card.

Cindy Mahoney, president of Hallmark Canada, says heavy card shoppers (who purchase more than 25 cards a year) are simply increasing the number of ways they connect, so digital is not a direct replacement for physical cards.

“It’s nothing at all like the DVD category where pay-per-view or DVR has kind of wiped out DVD purchases,” she says.

September 2017 Canadian Grocer

27

FEATURE

“Greeting cards is still a very healthy, stable, vibrant category, and very profitable for grocery retailers.”

The landscape is clearly shifting, though, and greeting card companies are creating new products that reflect the times. “Card companies are walking step-in-step with where our consumers are,” says LLansó. “Whether it’s humour that might be a bit snarkier or a little more risqué, or that mirrors the type of relationships younger people are having, or where they are in their lives. If women are getting married at a later age, we know that, and our cards are geared to [those] marriages.”

Jim Driscoll, director of marketing and retailer logistics at Carlton Cards, says that as technology becomes more and more a part of consumers’ lives, communication styles are changing.

“Today’s shoppers are highly expressive and they are looking for greeting cards that are authentic, creative and innovative,” he says. Carlton Cards has a mix of cards featuring modern, casual language, as well as more traditional, formal language. “It’s important we offer cards to meet the needs of all generations, from millennials to seniors,” he says.

Another trend is cards that signify quality. Hallmark recently introduced Signature, a line of high-end cards. “It’s largely handmade with beautiful embellishments and a tone of voice that is very warm, but also simple and a bit more casual than more traditional greeting cards,” says Mahoney.

LLansó says consumers are not just expecting on-point, well-written editorial, but also beautiful finishes on the card. “That doesn’t necessarily mean just embellishments with glitter or a bow, but it’s also in the quality of the paper and the type of printing and finish.”

At Summerhill Market in Toronto, sales of its upmarket greeting cards, supplied by Paper E. Clips, are steady, according to the store’s general manager Brad McMullen.

“I’m always impressed with the content, look and feel of the cards,” says McMullen. “Every single one of them is amazing.” Like most greeting card companies, Paper E. Clips manages the section, “which is why we’re able to have so many different cards and hit every holiday, because they’re in once a week

28

September 2017 Canadian Grocer

1

2

3

Cool cards 1 CARLTON CARDS’ Wishes Uncorked offers a whimsical take on receiving a message in a wine bottle. The displayable cards feature sounds, lights and a special message.

from Carlton Cards—Disney characters are brought to life in cards featuring an oversized button that offers multiple sounds that change each time the button is pushed.

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3 HALLMARK launched its Wonderfolds 3D card line with 30 designs. Each card folds flat, then pops up on a base that allows the card to stand upright and be displayed.

changing things and re-stocking,” says McMullen. “Our customers who are regular card buyers know we always have updated, new, fun and interesting cards.”

Longo’s has also seen steady yearover-year growth in its greeting cards department, according to category manager Mary-Ellen Schick. “As much as the digital age is upon us, people still find meaning in sending a card that means something to both the giver and the receiver,” says Schick. At Longo’s, greeting cards are sold close to the floral department and the assortment covers all of life’s big occasions such as birthdays, weddings and retirements.

Placing cards in the floral department certainly makes sense, like “placing the salsa next to the chips,” says LLansó.

However, there’s also an opportunity for impulse purchases with card spinners that can be moved around the store, or with checkout displays. “You may have birthday cards and sympathy cards and the ones that go with flowers, whereas in the checkout line, you can put something that’s more of an impulse buy,” he says.

Hallmark is currently testing checkstand displays in Canada, following a successful trial in the United States. “We know that eight out of 10 shoppers that are coming into the store have a greeting card need or would buy a greeting card, but they don’t always make it over to our aisle,” says Mahoney. “The check-stand option has been really successful in making sure we both remind her [the shopper] and give her an easy way of picking up a product once she’s already in line.”

Driscoll says the most common reason for not buying a greeting card in a grocery store is that the shopper did not see the department. “It is important to ensure the greeting card department is visible with strong navigational signage,” he says.

As for the future of greeting cards, LLansó says the sector will continue to grow as long as humans have emotional connections and need to communicate with each other.

“To remind someone you care about them, that you remembered their birthday, that you’re there for them in an illness … I think the greeting card is the best vehicle to do that,” he says. “And despite whatever comes up next, I always say that face-to-face is the only thing that beats a greeting card.” CG

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Q&A

Catching up with TOM BARLOW

The head of CFIG weighs in on the current state of the industry and reminds us that tough times in grocery are nothing new

By Shellee Fitzgerald | Photograph by Mike Ford WHEN CANADIAN GROCER first interviewed Tom Barlow, back in 2013, shortly after he became president and CEO of the Canadian Federation of Independent Grocers (CFIG) he declared: “I love change.” Today, he insists that still holds true. “Without change,” he says, “why would you want to get out of bed in the morning?” Luckily for Barlow, change is a constant in grocery: changing regulations, changing consumers and changing competitive threats. Recently, we spoke with Barlow about all of these changes and more. Here are edited excerpts from our interview.

In your 2016 Canadian Independent Grocer Financial Survey, the economy, staffing, energy costs and competition were cited as the biggest concerns for your members.

Where do these concerns sit currently?

It’s interesting because the economy jumped from the year before when it was third or fourth down the list and last year it became No. 1. What was happening in Alberta probably had a heavy influence. But I don’t see any change this year because the issues that have come up with minimum wage and energy costs have continued to push against businesses. And I would say those issues are not isolated to independent grocers, they are things everyone’s facing.

Competitive threats are coming from all directions. How should grocers respond?

The challenge for independents, particularly the smaller independents, is access to capital. It’s hard for them to change quickly. The message we continue to

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September 2017 Canadian Grocer

share with our members is you have to really understand your customers. If you’re about great service then you’ve got to be about great service. If you’re about fresh then you’ve got to be about fresh. If you’re trying to go head-tohead on price with someone who has a lot more resources, you’re probably not going to like the outcome.

Much of what is written about retail’s future takes a gloomy outlook, but do you see opportunities for independents?

Yes, I tell people that all the time. Everyone says how tough the industry is. I’ve been in it almost 40 years, it has always been tough. Whenever there’s competition it’s going to be tough. What you have to do is ask: what are the opportunities? The good thing about this business is that people always have to eat and drink—that’s not going to stop. It’s about how to get a fair share of that [food] dollar.

You’ve been in your role four years now. Among CFIG’s achievements what are you most proud?

I’m proud we’ve taken a more holistic industry approach, versus just focusing on things important to independents.

I believe that if the whole industry is growing, we get to grow with it. And there are specific, tactical things we’ve been successful on, like [reducing] credit card fees. The sale of beer and wine in Ontario grocery stores is another example. When we started having the conversation [with government] there was no consideration for independent grocers. Now, when the next allotment of licences comes out we’re guaranteed

independents will have at least 20% of the available licences. I believe that wouldn’t have happened without us.

In your first interview with us back in 2013, you said “what’s missing is the consolidated voice in the grocery business from the retailer side.” Have things changed?

They’re starting to change. Issues we’ve been dealing with like non-Canadian competition is helping the total grocery channel step back and say, instead of beating each other up, maybe we should start looking at the larger issues [together]. We’ve got far more collaboration and dialogue going with FCPC [Food and Consumer Products of Canada] and RCC [Retail Council of Canada]. When I came here four years ago there was no dialogue on our common issues, now we’re meeting on a regular basis.

What are CFIG’s goals in the next 12 months?

Our mandate is to grow and protect our members’ enterprises. On the grow side, it’s what are the opportunities out there for innovation and how do we help them service their customers and grow revenue? On the protect side, it’s to continue to fight the fight around things like credit card fees and energy and those costs that really put a dent on their bottom line. An area we haven’t yet tackled but that we’re starting to have more dialogue on with FCPC and RCC is around labelling and ingredients. I think that is a battle that’s coming and one where we need to be a lot more aligned on than we have been. Canadians have a high level of confidence in the groceries they buy and we need to protect that. CG

COVER STORY

With the debut of a cool, new Toronto store and more in the works, Matt Lurie has ambitious plans to make Organic Garage one of the country’s largest natural food grocers

By Chris Powell Photography by Jaime Hogge

LESS THAN 24 HOURS before the grand opening of Organic Garage’s third store, and just hours before a private shindig for shareholders and vendor partners, founder and CEO Matt Lurie is conducting a guided tour of the premises, pointing out specific design elements and hidden “Easter eggs” intended to surprise and delight customers.

The 15,000-sq.-ft. flagship store is located in Toronto’s Junction neighbourhood, a former manufacturing hub in what used to be an independent city called West Toronto before being annexed in 1909. Once a rough-and-tumble neighbourhood that housed everything from meat processors to foundries and mills, it has undergone a renaissance over the past decade.

Dubbed the “Junction Road Market,” the newest Organic Garage store sits on land that was once home to businesses ranging from St Marys Cement to the now-defunct Maple Leaf Mills—whose silos were a neighbourhood fixture until they were torn down in 2015.

It is the first of three Organic Garage locations set to open in Toronto over the next year, with stores in the city’s Leaside and Liberty Village neighbourhoods following in 2018. Lurie has set an ambitious goal of two new stores a year for the next three to five years, which would position the 11-year-old natural food store as one of the country’s largest natural food grocers.

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September 2017 Canadian Grocer

COVER STORY

Fresh produce is front and centre at Organic Garage September 2017 Canadian Grocer

33

COVER STORY Lurie is a fourth-generation grocer whose great-grandparents opened their first store, Goodbaum’s Groceteria, in Toronto, at 374 College St. in 1931.

Their store’s slogan, “We sell for less,” was the inspiration for Organic Garage’s current positioning statement, “Healthier Food for Less.”

Not one to sit still, Lurie says he is already working on the chain’s sixth and seventh stores. Each Organic Garage store has a build cost of anywhere from $1.8 to $2.5 million, depending on size and landlord inducements.

He opened the first Organic Garage store in Oakville, Ont. in 2006, after spending the previous summer working at an outdoor organic market. “It was a test to try to get an idea of where organics was: Where was supply, where was consumer demand, where was pricing?” says Lurie. “We felt there was a pricing gap between what traditional grocers were charging and what the products really cost.”

Lurie is a firm believer that consumers shouldn’t have to break the bank to eat organic. While acknowledging that several factors determine pricing, he claims Organic Garage is 18% to 20% cheaper than Whole Foods, 8% to 15% cheaper than large grocery chains and about

15% cheaper than most independent natural stores.

The new Junction store was built to Lurie’s exact specifications, with the CEO having input into everything from the interior and exterior decor to the in-store music—which features alternate live mixes of popular songs.

Once they have made their way from the 380-car parking lot, past the patio with its naked LED bulbs strung overhead, shoppers entering the store are greeted by four weathered-looking signs that espouse Organic Garage’s four core beliefs: • We believe in only 100% certified organic produce • We believe in no artificial anything • We believe in cutting prices, not corners • We believe in being a store for everyone Stepping through the sliding doors, shoppers encounter the produce section.

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September 2017 Canadian Grocer

It’s a core design element for Organic Garage, reflecting Lurie’s long-time passion for fruits and vegetables. “I’m a produce guy,” he explains. “The first thing that hits you, ‘Bam!’ is produce. We want [shoppers] to smell fruit.”

The front-of-store area is also home to a station dispensing kombucha and cold brew coffee, as well as an automated “teaBOT” that enables shoppers to custom brew loose-leaf tea. The machine features a touchscreen component that allows users to determine everything from the tea blend to water temperature.

The entire store has a distinct urban feel with design elements including chain-link fencing, spray-painted swinging doors and a combination of scuffed metal and wooden signs bearing messages like “Go organic without going broke” and “We only sell good $#!@%.” Scattered throughout the aisles are inspirational “graffiti” messages such as “Every 1 is destined 4 greatness.”

“I don’t like those cliché, corporate-style signs,” says Lurie. “Graffiti is an art form, but it usually has a very negative connotation. What we’ve done is put a positive spin on it.”

There are also some not-so-subtle digs at competitors like Whole Foods, such as the sign near the entrance that reads:

Not your typical grocery store, Organic Garage is filled with unique features including walls adorned with grafitti, faux scaffolding to disguise the “brutal” design of freezer doors, bold graphics, and a self-serve kombucha and cold brew coffee dispensing station

Organic Garage CEO Matt Lurie has plans to open two more stores in 2018

“Why spend your whole paycheque. Get healthier food for less at Organic Garage.”

A sense of whimsy permeates the entire store, from the hopscotch board stencilled on the floor near the produce section, to the “gender neutral” bathroom signs bearing images of everything from a caped superhero to an alien. “It’s a fun way of being cheeky with a sensitive subject,” says Lurie.

Elsewhere, a message on the floor outside the bathroom area reads: “Stand here to activate your superpowers,” while columns bear inspirational quotes from the likes of Dr. Seuss and playwright Tom Stoppard. “I’m a fan of finding these fun things when I’m out in different places,” says Lurie.

Other features serve a specific purpose. In order to disguise what Lurie calls the “brutal” design aesthetic of freezer doors, for example, the ceiling in the freezer aisle has been dropped and faux scaffolding installed. There is

also a (disconnected) switch on a column, accompanied by sign that reads: “Happiness can be found even in the darkest of times. Just remember to turn on the light.”

Organic Garage is also conducting a beta test for in-aisle touchscreens. The new store is home to 20 screens—named either “Rose” (after Lurie’s paternal grandmother) or “Vic”–that enable shoppers to register for its digital “unflyer” and access the stories behind some of its vendor partners.

The company is also developing a product finder that will enable shoppers to search for specific items (eg. Bob’s Red Mill cereals) and then be directed to the aisles where they are located. “We heard from customers that they don’t like bothering staff,” says Lurie. “They just want to find things themselves, and they’ll be able to do it through these touchscreens.”

Lurie is also adamant that specific

products, such as gluten-free cookies, sit alongside their everyday counterparts, rather than live in a dedicated section.

“There’s nothing worse when you go into a grocery store and have to go to a special section and feel ostracized,” says Lurie. “If you have celiac disease, you’re going to go to the cookie section just like everybody else and find the cookies that suit your dietary preferences.”

Not a typical grocery store, Organic Garage reflects what Lurie says is a blurring line between natural food and traditional grocery shoppers. He says that by merely dipping a toe into natural foods and forcing shoppers to look elsewhere for an expanded product offering, traditional grocers are helping create a future generation of Organic Garage customers.

“We’re the alternative” for shoppers, he says, “because they’ll come in here and see all the same [organic] products as in a chain store, plus way more, and at better pricing.” CG September 2017 Canadian Grocer

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® Reg. TM/MD McCormick Canada

* Source: AC Nielsen, National GB+DR+MM, L52W Ending June 24, 2017 Reg. TM/MD Billy Bee Honey Products Company

AISLES

Products, store ops, customers, trends

ORGANIC FOODS

06PHOTO/SHUTTERSTOCK

Onwards and upwards Having shaken off its niche status, the organic food category is stronger than ever

By Don Douloff

O

nce confined to health food stores, the organic category has grown exponentially and shows no signs of slowing. In 2015, the total category was worth $4.7 billion at Canadian retail, according to Tia Loftsgard, executive director of the Canada Organic Trade Organization (COTA), which has reported 16% year-over-year growth in the segment since 2010.

Two in three Canadians (66%) are spending at least some of their weekly grocery budget on organic items, according to an Ipsos poll conducted earlier this year on behalf of COTA. Among those consumers who buy at least some organic foods, these items account for 21% of their weekly grocery budget. Fruits and vegetables (76%) remain the most commonly bought organic food, well ahead of meat and poultry (28%) or dairy products (27%), according to the poll.

“In the produce world, all categories are seeing growth,” says Robert Kuenzlen, executive vice-president of Mike & Mike’s Organics, a Woodbridge, Ont.-based September 2017 Canadian Grocer

37

AISLES distributor of certified-organic produce and packaged grocery items.

According to the Free-from Food Trends Canada 2015 report, issued by market research firm Mintel, a little more than one-fifth (22%) of Canadians who claim to use “free-from foods and/or beverages” identify organics as among the factors most important to them when purchasing foods or beverages for home.

A driving force for organic purchases is health-conscious millennials, who, as a group, will surpass boomers’ organic consumption by 2020, says Loftsgard, adding that the fastest-growing new sub-category is snacks.

Organic packaged foods, including snacks, saw 6% growth in 2016, with sales reaching $1.1 billion in Canada, according to research firm Euromonitor.

In Canada, the organic movement “is consistent with growing concerns over hormones or steroids in beef, chicken and eggs, pesticides and herbicides in agricultural products, and a deep-rooted

ORGANIC EATS

wariness over GMO products,” according to the Euromonitor report. “Organic products are associated with socially and environmentally-responsible farming practices as well.”

Attuned to consumers’ growing appetite for organic, manufacturers are bringing new and innovative products to market.

In May, Beretta Farms reintroduced its organic hot dogs featuring new labelling, a smaller size and lower price point to “be more competitive,” says company founder Cynthia Beretta.

This fall, McCormick Canada plans to introduce Club House Organic Seasoning Mixes—in varieties such as Fajita, Kung Pao and Garlic Ginger—as well as Billy Bee 100% Canadian Organic Honey.

Among the newer products offered

by Tree of Life Canada, a B.C.-based specialty foods distributor, is Monteli Pizza, made from organic, non-GMO ingredients using 100% solar energy and hydroelectric power from certified renewable energy sources. Another is

CLUB HOUSE ORGANIC SEASONING MIXES From McCormick comes this line of organic seasoning mixes. Varieties include Garlic Ginger and Kung Pao Stir-Fry seasoning mixes, as well Fajita and Taco seasonings.

ORGANICGIRL TRUE HEARTS BUTTER PLUS! Two hearts are better than one.

This triple-washed blend features crunchy green butter lettuce hearts along with red butter lettuce, which boasts as much iron as spinach.

BERETTA ORGANIC HOT DOGS One of Beretta’s signature products, these hot dogs are made with premium organic meats and seasonings with no artificial flavours or added nitrates. Available in beef and chicken varieties.

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September 2017 Canadian Grocer

Nineteen02 Kombucha fermented tea, brewed in British Columbia and touted for its probiotic health benefits.

“Companies may look to explore other claims that offer similar benefits as organics [such as pesticide-free for produce, free-from meats with no hormones, antibiotics, animal by-products and/or steroids used] but prove more cost effective and relevant to a broader base,” says Joel Gregoire, senior food and drink analyst at Mintel.

Strong organic sales have boosted grocery stores’ bottom lines on a number of fronts. John Roden, marketing manager at Vancouver-area Stong’s Market, says in the last two to three years, sales of organic packaged foods have grown in tandem with their increased availability.

At Nature’s Emporium, operator of three Greater Toronto Area food stores, customers are very vocal about their interest in organic products, says Ryan Dennis, director of communications.

“We’ve met that demand by investing in organics, both in our fresh department and our exclusively organic produce department, and by increasing the availability of organics throughout our grocery and supplement sections.” He adds that Nature’s Emporium has also “seen sustained strong and consistent growth in our prepared foods categories.”

The category’s future appears to be bright with sales of organic packaged food expected to reach $1.3 billion in Canada by 2021, according to Euromonitor. “Over the forecast period, as the health and wellness trend continues to evolve and consumers become increasingly careful of what they consume and constantly examine product labels and ingredient lists, organic packaged food will see rapid take-up,” says the research firm’s report.

Retailers, however, “need to put thought in to how to merchandise the category. What gives consumers the message that you’re serious about organics?” says Mike & Mike’s Kuenzlen.

Noting that “demand is growing and organics is a strong growth category that builds consumer loyalty,” Loftsgard says the increasingly large selection of organic products available may force retailers to rethink their planograms.

“Organic products likely will no longer fit solely into an organic aisle. How will grocery stores address the influx of new products into their shelves?”

Proteins raised without the use of antibiotics, added hormones or steroids

BERETTAFARMS.COM

AISLES

Water World Move aside, Plain Jane H20— plant waters are the latest craze in hydration. Do you have these products on your shelves?

By Day Helesic

CACTUS WATER True Nopal Cactus Water is harvested from the fruit of the prickly pear cactus from Arizona’s Sonoran Desert.

Featuring a sweet, slightly tropical taste, this beverage is a low-calorie plant water; it has just 18 calories per serving and about half the sugar and calories of coconut water.

True Nopal will be available in Canada this year.

COCONUT WATER Though coconut water has been around for a while, its popularity has never waned.

Montreal’s Thirsty Buddha brand has stepped things up a notch with its latest launch, a sparkling coconut water.

Certified non-GMO and vegan, gluten free, fat free and electrolyte-rich, this super hydrator is also available flavoured with watermelon or pineapple.

MAPLE WATER Sustainably harvested from Ontario maple trees, Sapsucker Maple Water is rich in vitamins, minerals, amino acids as well as antioxidants. With its delicate taste and a slightly sweet finish, this tree-filtered water has no additives or preservatives, is organic certified and has only 25 calories per serving.

Bonus Water

HONEYWATER It’s not plant water, per se, but this all-natural beverage is just as refreshing. Torontobased brand HoneyWater is naturally sweetened with Canadian honey, and enjoys honey’s key health benefits: it is immune boosting, aids in digestion and even provides sore throat relief. Available in Lemon & Honey and Mint & Honey flavours.

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September 2017 Canadian Grocer

BIRCH WATER 52° North birch tree sap beverage is made with sap that is hand-tapped and harvested during the spring thaw from silver birch trees in British Columbia. Packed with naturally occurring electrolytes, antioxidants, phytonutrients and trace minerals, this water is naturally sweet and packaged in eco-friendly pouches for hydration on the go.

AISLES

ACTIVATED CHARCOAL

BLACK MAGIC? Consumers are flocking to activated charcoal products for a bevy of perceived health benefits

By Rosalind Stefanac

AKVALS/SHUTTERSTOCK

LONG BEFORE PHOTOS OF BLACK ICE CREAM hit Instagram by storm, activated charcoal had been finding its way into supplements, beauty products and beverages.

In fact, its first uses can be traced back centuries when the Japanese and Native Americans used charcoal to purify water and air, neutralize stomach acids and even clean teeth. And activated charcoal is often used in hospitals to treat acute poisoning from acetaminophen, aspirin and other medications.

These days, more and more grocery shoppers are also gravitating towards the black stuff for its health benefits, say trend watchers. “Our research shows that more than half of consumers are likely to buy products that have targeted health claims so they’re interested in these kinds of things,” says Maia Chang, senior research analyst, consumer Insights at research firm Technomic. “Women are especially likely to pay more for items that aid digestion or have other functional benefits.”

Alex Picot-Annand, a registered holistic nutritionist with The Big Carrot

grocery store in Toronto, says “detox” is an ongoing buzzword and activated charcoal has become associated with the practice. “People love detoxing the skin, detoxing the gut, and any substance seen as detoxifying tends to do well,” she says. “I see society, in general, shifting to more holistic approaches and people are increasingly looking for natural alternatives to what ails them.”

Ryan Dennis, director of communications at Nature’s Emporium, a multi-location natural foods market that carries a variety of activated charcoal products, says the substance is widely seen as a safe and effective means of maintaining overall wellness. “We’ve carried these products for many years, although we’ve seen the interest grow strongly over the last one to two years.”

Dennis attributes the sudden popularity to wellness bloggers and celebrity influencers touting charcoal’s health benefits. “Activated charcoal draws toxins in, traps them and allows them to be removed,” says Dennis. “Now we’re seeing customers put those traits to use

in myriad ways—using it for masks and skin care as well as oral hygiene.”

Social media is also spurring the trend towards black foods and beverages, with everything from burger buns and pasta to cold-pressed juices with activated charcoal. Given the substance is flavourless and turns anything it’s mixed with into a dramatic black, chefs are finding it fun to work with, says The Big Carrot’s Picot-Annand. “However, the actual research on its efficacy is pretty mixed so I don’t know if it will have the staying power of better researched substances like vitamin C, echinacea or milk thistle,” she adds.

Manufacturers getting in on the trend tend to disagree. “This category is on fire now and North America is just discovering it,” says Mary Futher, founder of Toronto-based Kaia Naturals, which recently launched a line of activated charcoal deodorant called The Takesumi Detox.

Organika Health Products, the first in Canada to offer activated charcoal in a powder format, has major retailers such as Sobeys and Calgary Co-op on board, with Loblaw expected to soon follow.

“Customers are well-versed … so our suggestion to grocers is to merchandise this in their beauty/facemask section as this is where most are looking for it,” says Aaron Chin, national sales lead.

Nature Emporium’s Dennis expects we’ll see a lot more innovation on the horizon when it comes to products with activated charcoal. “As a retailer dedicated to sharing the latest and greatest wellness-inspiring offering with our customers, it’s equally likely we’ll include space for these products in the future,” he says. CG

NOT THE SAME STUFF FOUND IN YOUR BBQ Don’t confuse activated charcoal with the black briquettes used to fuel your barbecue. The former is prepared from a number of carboncontaining materials, including wood pulp, coal, rye starch and coconut shell, then broken down into a fine granular form and purified (or activated) with steam, oxygen, carbon dioxide and other chemicals.

Barbecue charcoal, on the other hand, is often loaded with toxins and chemicals that should never be consumed.

September 2017 Canadian Grocer

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AISLES NEW ON SHELF!

ON YOUR MARK. GET SET. BAKE! SOON, HOME BAKERS ACROSS THE LAND will be prepping their cake pans and cookie sheets and adding sugar, spice and all things nice to their shopping carts as they gear up for the busy holiday baking period.

And this fall, home bakers will get some added inspiration as the CBC debuts The Great Canadian Baking Show on Nov. 1. A spinoff of The Great British Bake Off, the show features amateur bakers facing off in a series of challenges testing their skills and creativity. If the Canadian version comes anywhere close to being as popular as the Brit version— which commands some of the highest television ratings in that country—you might just see a run on baking supplies in your store. In the meantime, here’s a look at how some key baking needs categories are performing.

These three new products (and they couldn’t be more different) grabbed our attention this month

SUNRYPE REAL BREWED SPARKLING TEAS A refreshing twist on tea SunRype, famous for its juices, once again moves into tea territory with its latest offering. Touted as “refreshingly different” these beverages feature real-brewed tea, natural flavours, real cane sugar and are lightly sparkling. Available in four flavours.

Baking needs sales in Canada - Latest 52 Weeks, ending June 24, 2017 $ Vol % Chg

Units (000’s)

124,264,987.0

13

26,795,796.7

3

15,084,120.0

0

3,129,799.2

-3

BAKING CUPS - PAPER

Units Vol % Chg

9,669,956.0

0

4,860,110.9

-3

BAKING EXTRACTS

28,827,259.0

-10

5,742,767.1

-2

2 BAKING NUTS

135,889,777.0

22

18,119,722.7

15

15,623,467.0

4

4,048,538.9

4

19,209,429.0

7

12,990,768.6

2

16,095,323.0

2

2,876,558.5

5

BAKING POWDER 3 BAKING SODA COCOA POWDER FLOUR

172,457,671.0

1

28,486,103.5

3

FOOD COLOURINGS

3,965,614.0

2

3,463,852.1

6

GLAZED FRUIT

3,947,790.0

0

943,329.7

-4 -1

GRAHAM WAFERS & CRUMBS

24,367,261.0

1

6,866,563.8

MILK - CANNED AND BOTTLED

106,311,398.0

4

61,117,667.8

6

SEMI MOIST FRUIT

106,437,875.0

-1

43,535,647.3

-5

SUGAR

201,815,962.0

3

74,275,952.4

7

48,184,208.0

-8

7,141,145.3

-4

4 SUGAR SUBSTITUTES

1. Chip, chip hooray! In the latest 52 weeks, baking chips sales have jumped an impressive 13%.

2. Nutty for nuts. Sales of baking nuts are experiencing double-digit growth with sales up 22% in dollars and 15% in units.

3. What’s up with baking soda? Sales of this baking staple are on the rise.

4. Souring on sugar substitutes? While sales of the real stuff have climbed, the sugar substitutes category is seeing declines of -8% in dollar sales and -4% in units.

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

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September 2017 Canadian Grocer

BABY GOURMET SHAKERS A premium organic beverage for kids Got a kid who’s a picky eater? This 80% whole milk–based organic beverage has more than 24 vitamins and minerals, seven grams of protein and is gluten free, making it easy to meet Junior’s dietary needs.

TABASCO SWEET & SPICY A fusion of southern heat and Asian spice McIlhenny Company’s latest hot sauce is a combination of Asian spices and hot peppers. The mildest in the brand’s family of flavours, this “sweet heat” sauce is ideal as a glaze, a “splash on” condiment or ingredient in salad dressings and stir-fries.

JRWASSERMAN/GETTY IMAGES

1 BAKING CHIPS BAKING CHOCOLATE SOLID

$ Sales (000’s)

WHAT’SNEW /&8 130%6$54 */ (30$&3:

Shaking Up Single Serve Salads Introducing a NEW line of single serve salad kits-Eat Smart Salad Shake Ups. The patented package has a unique leaf-shaped design and comes with an interior tray that serves as a lockable lid, making it conveniently easy to mix the toppings and dressing.

They have no artiďŹ cial avours T or preservatives. Delicious and convenient, just what consumers are looking for.

Low Calorie-High Fibre-Gluten Free NuPasta is the low calorie pasta made with konjac, a ďŹ bre rich root vegetable. By replacing the wheat content in pasta with konjac, NuPasta has no starch and is gluten free. NuPasta is suitable for various dietary restrictions, including weight management, gluten sensitivities, or low carb.

Keeping it Fresh Help consumers infuse their day with freshness with Oasis Infusion™!

These ready-to-drink infused beverages are made from infused water with herbs, owers, spices and fruit juice.

With only 50 calories per portion and no sugar added, consumers can enjoy Oasis Infusion in three delicious avours: Ŕ $VDVNCFS MJNF NJOU Ŕ 4USBXCFSSZ IJCJTDVT CBTJM Ŕ 5BOHFSJOF MFNPO UIZNF

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–SEPTEMBER 2017

FRESH

fruits and vegetables

From jackfruit to edible flowers, specialty produce is keeping things interesting in the produce department

By Danny Kucharsky

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September 2017 Canadian Grocer

MANY CANADIANS KNOW JACK about jackfruit, but the subtropical fruit with a shell like a medieval weapon is popular with ethnic customers at Pete’s Fine Foods in downtown Halifax.

“Sales are pretty good when we get it,” says the store’s operations manager Frank Yunace. Jackfruit “is big with our international clientele and it’s definitely growing.”

The giant fruit—often bigger than watermelon—is mostly sold cut up “but some people come in and buy a whole jackfruit,” says Yunace.

The little-known fruit tastes like pineapple and mango and is being touted as a popular meat substitute because of its texture and ability to absorb the meaty tex flavours in which it’s cooked.

Jackfruit is being pegged as a possible Jackfrui next big thing in produce.

Meanwhile, microgreens may already Mean next big thing. Combining both be the n health attributes and good flavour, microgreens are the “holy grail of micro food,” says Ian Ritchie, who heads food business development and marketbus ing at Greenbelt Microgreens.

Greenbelt, which operates greenhouses in Stouffville and gr Hamilton, Ont. and Maple H Ridge, B.C., has been selling its Ri namesake produce to major grona cers including Metro, Loblaw, ce L o n go’s , Wh ol e F oods an d Sobeys this year. The reception Sob “has been terrific,” Ritchie says. “ha “Microgreens have been success“M right out of the gate,” with douful rig ble-digit growth every month, says ble-dig Mimmo Franzone, director, produce and floral at Longo’s. Microgreens were recently in Longo’s Experience praised re as “no longer just for five-star Magazine a restaurants.” restaurant Microgreens are small versions of Microg plants such as broccoli, radish, parent pla sunflower and arugula, and are typically harvested 10 days after the first leaves Microgreens have a much higher emerge. M nutritional content than older plants—a

quarter cup of broccoli microgreens is the equivalent of eating two heads of broccoli.

“They’re so easy to use. People are discovering that they can put them in sandwiches, salads, soups, pizzas, you name it,” Ritchie says. “I like to think of a microgreen as a Swiss Army knife—no matter what the task is, it’s up for it.”

Microgreens have become more widely available because of an increase in microgreen producers, says Catriona Ffrench, co-owner of Cookstown Greens, in Thornton, Ont., an organic producer that derives 10% of its sales from microgreens. In-store tastings by grocers and growers have also increased consumers’ exposure to microgreens and knowledge of their benefits, she says.

Grown year-round in greenhouses, microgreens are more expensive to grow than other produce, Ffrench notes.

“Because they’re in trays, you have to constantly water them or they dry out.

There’s much more labour involved and much more overhead.”

While some microgreens are delicate, this is offset by the fact they come from nearby growers and not California or Mexico, Ffrench says. And since the product is delivered on an almost daily basis, there have been no issues with shelf life, says Longo’s Franzone.

Another potential specialty produce star is edible flowers, which Longo’s also sells. Cookstown Greens currently grows edible flowers for chefs and bakers, who use them mainly as garnishes.

Moringa is another plant gaining a lot of attention. The nutrient-rich leaves produced by moringa trees contain high levels of calcium, potassium, protein and vitamins. However, fresh moringa leaves are not yet available in North America so the product is currently sold as a powder.

Trends in specialty produce tend to start when a celebrity chef or a worldfamous restaurant takes a product to the next level, Franzone says. But while specialty produce will grow, “I don’t feel that these items will ever become mainstream.” CG

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For more info please visit www.theopma.ca and producemadesimple.ca or contact: 416-519-9390 September 2017 Canadian Grocer

45

CHECKING OUT George Condon

If innovation is the lifeblood of retail, why is it so hard to get new products listed?

WHEN I JOINED the grocery industry 40 years ago, one of the first things I was told was that the industry depended on new and innovative products, both to keep customers coming back and to encourage activity on grocery shelves.

That phrase has since become a grocery industry mantra, repeated time and time again. But is it true?

If new and innovative products are the lifeblood of the grocery industry, then why do so many small- and medium-sized companies say they can’t get listings with large distributors? Cruise the aisles of any industry trade show in Canada and ask the exhibitors how successful they’ve been in getting their products onto grocery shelves. Most will tell you that, because they can’t afford the listing fees, they can’t even get past the first meeting with buyers.

Those meetings also include questions small manufacturers just can’t answer:

46

September 2017 Canadian Grocer

What do your Nielsen numbers show?

Where is the product already listed?

Apparently, you need a listing before you can get a listing! No wonder so many small manufacturers are simply fed up.

To be fair, there are exceptions. Every now and then a buyer or merchandiser will go to bat for a small manufacturer whose product has great appeal. They’ll take a small amount of the product and test it in a limited number of stores, sometimes with greatly reduced listing fees or without fees at all. Although this approach provides a perfect opportunity for one manufacturer, there are still hundreds of manufacturers out there whose unique and innovative products never see the light of day.

And there are other factors making it difficult for smaller manufacturers. For instance, take a look at “innovation,” from larger manufacturers, which really isn’t innovation at all. The big guys are

George Condon is Canadian Grocer’s consulting editor.

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

PETER RYAN

THE NEED FOR NEW

reluctant to truly innovate and, instead, they lean toward line extensions and variations of existing successful products. Retailers are satisfied with this because they know large manufacturers can, and do, pay the listing fees.

Marion Chan of the Trendspotter blog on canadiangrocer.com writes: “When manufacturers take the plunge into ‘innovation,’ the resulting products often aren’t innovative because corporations want to play it safe. Because the costs of developing a great product, promoting it and getting space on the shelf are high, products tend to be variations of past successes. It becomes a vicious circle with a high rate of failure even for the safe options.”

Chan concludes that with this approach, everyone loses. The consumer loses because they don’t have access to a wide range of innovative products.

The manufacturer loses because they aren’t attracting new consumers, and retailers lose because consumers aren’t spending incremental dollars for new products. She says a lack of selection is pushing consumers to specialty retailers or online where they can purchase hardto-find or unique products.

There is little doubt many innovative new products come from smaller manufacturers. Therefore, I humbly offer this solution: Large retailers should immediately establish a buying policy for small manufacturers that includes a dedicated buyer/merchandiser for new products.

Listing fees would be flexible—anything from free to no more than $5,000—and based on the buyers’ belief that the product has merit and will find sales after exposure to the consumer. Each store would have shelf space or an end aisle with appropriate signage devoted to introducing these new and innovative products.

Small manufacturers and consumers would be happy and, as a result, retailers would be happy, too. CG

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