March/April 2013

March / April 2013 Vol 3 | No 2

$9.95

H.Y. Louie’s fresh new format

Costco’s

USA: The World

Oleen

Next Door

Smethurst

PM # 42211029

Growing business

+ produce MANAGER

Pg 63

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2 Nielsen Homescan – 6 months Post Launch.

PEOPLE • PRODUCTS • PROMOTION • PASSION March | April, 2013 Volume 3, Number 2

grocerybusiness.ca Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Managing and Online Editor Noelle Stapinsky Contributing Editors Sally Praskey, Angela Kryhul, Elaine Walker Creative Agency Boomerang Art & Design Inc. boomart.net Cover Photo Mike Pinder Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Grocery Business Advisory Council Phil Donne, Campbell Company of Canada John Scott, Canadian Federation of Independent Grocers Perry Caicco, CIBC World Markets Nancy Croitoru, Food and Consumer Products of Canada Bill Dunne Tim Berman, Kraft Canada Inc. Mark Ayer, Procter & Gamble Inc. David Wilkes, Retail Council of Canada Cori Bonina, Stong’s Market Michael Marinangeli, MIDEB Consulting Inc. © Copyright 2013. All rights reserved.

No part of this magazine may be reproduced without written permission of the publisher.

GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Grocery Business Media 390 Queen’s Quay W., RPO Box 4085 Toronto, ON M5V 0A4

publishers’MESSAGE GO BIG OR GO FRESH? Bifurcate is a word you don’t come across every day. But, like the economy, the retail market is branching in two extreme directions and the middle ground is shrinking.

While Target made its Canadian debut in a big way this spring with a credible grocery, albeit abbreviated fresh offering, an industry milestone of an entirely different kind took place in January when H.Y. Louie opened its new Fresh St. large-format store in West Vancouver.

With a focus on locally sourced and fresh, and with minimal packaged goods, Fresh St. is a model for grocers who are toying with the idea of bumping up their higher margin fresh offerings and shrinking the packaged goods aisle.

(See The West Gets Fresh, page 14.)

Consumers are driving the demand for fresh.

Health conscious boomers are putting more fruits and vegetables on their plates and new Canadians, who eat at home more often, are demanding a wider selection of fresh ingredients.

With these changing expectations, will stores become destinations to experience food rather than just purchase it, much like Eataly in New York or Pusateri’s in Toronto?

And as for the middle of the store, a parallel and evolving trend is the growing consumer interest in ordering packaged goods online, avoiding the bricks and mortar environment altogether. In this issue of Grocery Business, John Scott, the outgoing president and CEO of CFIG, suggests that the combined force of aging baby boomers and the younger online generation will have a seismic impact on how food is purchased in the future. (See John Scott, Exit Interview, page 16.)

Are we at the beginning of a grocery revolution?

Only time will tell, but with the consumer changing so rapidly, we may very well be.

karenjames@grocerybusiness.ca kevinsmith@grocerybusiness.ca

Grocery Business March | April, 2013 Volume 3, Number 2

contents

Target Canada, Guelph Ont., Fresh Grocery Department

DEPARTMENTS 5

Publishers’ Message

60 Making It – More Cheese, Please

8

Front End

72 It Figures

Go Big or Go Fresh

What’s happening in the grocery business

13 Open Mike

Constant change and the history of grocery

Artisan cheese makers are hot in deli Nielsen spotlights consumer shopping behaviour

74 Perry’s Point of View

Retail concentration and why he loves Buffalo

33 A United Voice for

67 6

March | April 2013

Healthy Choice

RCC partners with Health Canada

58 Launch It, List It

Check out the latest new products

16

ON THE COVER

29

Fresh Perspective

When Oleen Smethurst was promoted to Costco’s produce department, it was a whole new world to her. But she quickly became drawn to the passion of the industry.

33

35

63

FEATURES 14 The West Gets Fresh

H.Y. Louie’s new format takes a cue from fresh markets

43 2013 Best New Product Winners 45 The World Next Door

16 John Scott’s Exit Interview

How the U.S. Foreign Agricultural Service connects grocers to new sourcing opportunities

19 Making the Most of

57 The Inside Scoop

Mobile Marketing

23 Independence Day

Chapman’s Ice Cream turned adversity into opportunity

The rise of the single person household

35 The Aldi Advantage

Is hard discount headed to Canada?

40 A Night to Nurture

The grocery industry has a Gala gathering to raise money for children

grocerybusiness.ca

64 Ron Lemaire

CPMA president’s message

65 CPMA Show Highlights Program-at-a-Glance

67 The Main Squeeze

Juicing trends are on the rise

68 Produce by the Numbers 71 A Fresh App for Bar Codes

60

Bar Codes become marketing tools

March | April 2013

7

ANALYZE THIS

Capturing the

Target Audience Ahead of its cross-Canada rollout, Target opened three pilot stores in early March, giving eager consumers a sneak peek and rival Canadian retailers a taste of what’s to come.

These pilot locations, in Milton, Guelph and Fergus, Ont., were strategically selected to be near Target’s distribution centre, in what the company has deemed a “beta launch,” in preparation for its April store openings across the

Perry Caicco, managing director, CIBC World Markets, shares his observations of Target’s opening day in Milton, Ont. What was your overall impression of the store?

It was sharp, clean, strongly-lit and well-organized.

Shelf tags, category and product signs were clear and simple.

What struck you most about the store?

Apparel is clearly dominant, occupying 40 per cent of the store and containing all the brands Target is famous for. Women’s and kids’ apparel were especially impressive.

The home goods [especially textiles] were large and impactful. Kitchenware was solid, but not near the range of Canadian Tire, and with price points that actually started higher. But there was a strong attempt to carry differentiated products.

country.

Grocery Business visited the Milton store on the first day and found that the pilot location stayed true to their renowned U.S. branding in both layout and product offering. The Milton store offers a generous selection of branded packaged goods products as well as Target’s premium private-label brand,

What did you think of its grocery offering?

The food area was only 15,000-sq.ft. and contained no produce or meat. Selection was limited throughout grocery, although there were numerous unique brands and products.

Archer Farms, and celebrity chef Jamie Oliver’s high-end pasta and sauce line.

Target has also added some Canadian flare by showcasing Roots clothing and pastries by Dufflet.

Of note was the Fresh department, which had minimal selection and almost no fresh produce. Since Target aims to be a one-stop shopping destination – and given the importance of fresh food to Canadian consumers – the further development of this department might be still be in the works.

8

March | April 2013

How competitive was the pricing?

The pricing was unclear. A number of items were at Walmart levels, but most were a bit higher… some quite a bit higher. Our guess is that, on regular pricing, they plan to be even – within, or no more than a few per cent above local discount competitors – with the five per cent REDcard rewards as a bonus.

What does the big picture look like?

It’s a great store that will likely spark a heavy price reaction from competitors. As is usual in Canada, the real pricing action will be promotional and that has yet to begin in any meaningful way.

Front End

Look who’s reading Grocery Business In a happy coincidence, Grocery Business contributing editor Sally Praskey (l) was a member of a Galapagos Islands tour group that included Tracey Nilsson, Urban Fare operations manager, and George Clarke, store manager, at Price Smart Foods, Vancouver. Nilsson and Clarke were celebrating their 25th anniversary. Urban Fare and Price Smart Foods belong to the Overwaitea Food Group.

Grocery People Mark Timbie, president of consumer foods Americas and chief administrative officer for McCormick and Company, plans to retire at the end of June 2013. Timbie joined McCormick as vice-president of sales and marketing for the McCormick/Schilling division in 1996.

Metro Inc. has appointed Geneviève Bich as vicepresident of human resources across all businesses.

Dana McCauley has accepted the position of vice-president of marketing for Plats du Chef, a Montreal-based gourmet frozen food manufacturer.

Raymond Bouchard has taken on the position of director of negotiations and merchandising for the team in charge of intermediary banners for Metro Richelieu Inc. St-Jean-Port-Joli division.

Sobeys has a new director of corporate affairs, Bernard Doucet. grocerybusiness.ca

Joe Magnacca, who has held senior roles at both Loblaw and Shoppers Drug Mart, is now the CEO of RadioShack Corp.

Dino Bianco, of U.S.-based Kraft Foods Inc., has expanded his responsibilities as executive vice-president and president – Canada, to include Kraft’s North American Beverage portfolio.

Mike Pilato was recently named vicepresident of sales for The Clorox Company of Canada Ltd. Nick Jennery has assumed the position of CEO of the Winery Association of Nova Scotia.

Cascades recently announced Hugo D’Amours as vice-president of communications and public affairs.

Jeff Rogers, senior vice-president of Mosaic Canada, was promoted to the position of president of the Canadian operation.

B.C.-based Choices Markets has appointed Ishkandar Ahmed as CEO. Walmart Stores Inc. named Lev Khasis as president and chief executive of New Formats for Walmart International – a division that includes Canada.

In Food & Consumer Products of Canada (FCPC) news: Derek Nighbor has been promoted into the role of senior vice-president, responsible for public and regulatory affairs and industry affairs while Adam Grachnik has assumed the position of senior director of communications and events. Paul Duxbury has joined as the acting vice-president of industry affairs and Glenda Costa, vice-president of finance and corporate services, will now also oversee membership services.

March | April 2013

9

Front End

We’ve Got Mail

CORPORATE RESPONSIBILITY VAN HOUTTE® JOINS THE FAIR TRADE FORTNIGHT FOR A THIRD YEAR From May 1 to 15, Fairtrade Canada will host its annual celebration, the Fair Trade Fortnight, to bring partners and consumers together to promote and increase awareness around Fairtrade Certified products. For the 3rd year in a row, Van Houtte will be participating in the celebration to promote its commitment towards Fair Trade in Canada.

Van Houtte, a partner of Fairtrade Canada since 2000, offers three Fairtrade Certified collections, which includes its Single Origin, Fair Trade Organic, and its recently certified Espresso Collection.

This new addition brings the brand’s Fairtrade Certified blends up to 17 varieties of ground, whole bean and K-Cup® packs sold across Canada.

In support of this year’s focus on engaging people to do something good for the world through Fairtrade Canada’s Karma Campaign, Van Houtte will be hosting a series of initiatives such as online promotion and social media contests, as well as offering educational videos, in-store displays and $2 discounts in grocery stores.

Canada’s leading fresh fruit & vegetable industry event

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March | April 2013

cpma.ca

Hi Kevin, The Co-op Atlantic story, in your January/ February issue is great - we love it!

We turned each page very slowly, to fully absorb the visual impact. The layout is superb; well thought out. It breathes Atlantic Canada and history.

You and your team have done excellent work, and I want to thank you for driving the project to this successful result.

Roméo Cormier Manager of Public Affairs Directeur des affaires publiques Co-op Atlantic/Coop Atlantique

Cashing in with a new coupon app Checkout 51 is a recently launched Canadian app designed to allow consumers to simply take a photo of their store receipt to redeem deals and save on their favourite brands.

It’s a simple process. Each week Checkout 51’s site is updated with a new list of coupon offers on a variety of grocery products. When a consumer/member makes a purchase at any store, they take a photo of their receipt; the Checkout 51 app confirms the purchase and credits the member’s account with the amount stated on the coupon. When a member’s account reaches $20, a cheque is mailed to them.

“Just as with regular coupons, brands cover the face value of the coupon and then pay Checkout 51 a fee for distributing and processing the offer,” says Noah Godfrey, company co-founder. checkout51.com

RESET...

The Toronto chapter of the Network of Executive Women (NEW) hosted a sold-out spring networking event in March featuring a panel discussion with four top Canadian female executives. Moderated by NEW president and CEO, Joan Toth, the panel included Mary van Praag, general manager of Coty Canada; Carol Stewart, president of Kellogg Canada Inc.; Chris Vickers Tucker, president and general manager of The Clorox Company of Canada; and Miyo Yamashita, Deloitte partner for privacy solutions, and enterprise risk services (pictured below). . . . . Dairy Farmers of Canada has announced the finalists for the 8th annual Canadian Cheese Grand Prix. The category champions and Grand Champion will be unveiled at the 2013 Canadian Cheese Grand Prix Gala of Champions at Montreal’s Hyatt Regency Hotel on April 18. . . . . Longo’s growth and employee talent have earned the independent grocery chain the designation of Platinum Club Member, Canada’s 50 Best Managed Companies, for the sixth consecutive year. . . . . EcoSense mobile flyer app, developed by a team from the University of Toronto, wins Walmart’s second annual Green Student Challenge. . . . . Target’s Canadian president, Tony Fisher, will be the featured speaker at the Retail Council of Canada’s June STORE conference. . . . . The H.J. Heinz Company has entered into a definitive agreement to be acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital. . . . .

The Procter & Gamble Company’s Connect+Develop program has launched a new website (pgconnectdevelop.com), linking innovators directly to top company needs, and P&G business leaders directly to external innovation submissions. . . . . Mediacorp Canada Inc. has named Loblaw Companies Ltd. as one of Canada’s Best Diversity Employers for 2013, a distinction the company has earned three years in a row.

Network of Executive Women (NEW) panel (l-r): Joan Toth, Miyo Yamashita, Chris Vickers Tucker, Carol Stewart and Mary van Praag

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Open Mike

Food Industry

Consolidation

A Historical Perspective

By Michael Marinangeli

All strategies eventually fail. Patterns of competition change as new competitive threats enter the market, and with the rapid expansion of Walmart and the entry of Target into Canada, many are saying that we are in for another round of food industry consolidation.

Consolidation has always been a part of our industry. Over the past three decades, changes in ownership have dramatically moulded our industry’s landscape resulting in national retailers that are much more powerful than past players.

To get a sense of how much the landscape has changed, let’s look at how the current retail line-up compares to 30 years ago: Two aspects of this list stand out: a) Only Loblaw and Safeway are in both columns b) Club, Mass, and Drug are now major grocery retailers with the highest growth in new store square footage and sales occurring over the past five years.

LARGEST GROCERY RETAILERS 1983

2013

Dominion

Loblaw

Loblaw

Sobeys

Oshawa Group

Metro

Steinberg

Safeway

Safeway

Walmart

Provigo

Costco Shoppers Drug Mart

grocerybusiness.ca

So How Did We Get Here?

Here’s a recap of major consolidations and influential changes that transformed the grocery landscape over the past 30 years.

1983 • Provigo buys Dominion’s Quebec stores plus A&P’s operations in Quebec 1985 • Dominion sells its prime Ontario retail locations to A&P and its Eastern Canada locations to Loblaw • Costco opens first store in Vancouver • Oshawa Group buys 25 Safeway Ontario stores 1986 • Steinberg and Price Club create a joint venture 1987 • Safeway buys 26 Woodward Food Floor locations in Western Canada 1988 • Loblaw buys Fortinos 1989 • Steinberg sells their business to a shipping firm called Saconov 1990 • A&P buys Miracle Food Mart (Steinberg’s Ontario Division)

• Oshawa buys Knechtel 1992 • After 75 years in business, Steinberg goes bankrupt and its retail locations are purchased by Metro, Provigo and IGA in Quebec

• Oshawa buys Horne & Pitfield in Alberta 1993 • Costco and Price Club merge 1994 • Walmart enters Canada by purchasing 144 Woolco stores 1998 • Oshawa sells their Ontario, Quebec and Western Canada locations to Sobeys.

• Oshawa sells Atlantic stores to Loblaw • Loblaw buys Provigo

1999 • Metro buys 47 Loeb stores in Ontario

• Overwaitea buys Cooper’s in B.C. 2000 • Knob Hill Farms closes its stores 2002 • Shoppers Drug Mart introduces its first large format store including food 2005 • Metro buys A&P in Ontario 2006 • Walmart launches Supercentres 2007 • Sobeys buys Thrifty Foods in B.C. 2009 • Loblaw buys T&T Supermarkets 2011 • Target announces that it would purchase the lease agreements of 220 Zellers stores

• Target sells 39 locations to Walmart 2013 • Target opens in Canada

• Walmart announces a total of 388 stores by the end of 2014 Other major impacts include: The rapid expansion of ethnic supermarkets in Canada where it’s estimated there are over 100 Asian supermarkets that account for close to 10 per cent of all grocery sales in the Toronto area; the rumours that Canada Safeway could be for sale with Loblaw, Sobeys or Metro as likely suitors; plus the potential of a U.S or European chain entering the Canadian landscape.

Stay tuned!

Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. mjmarinangeli@gmail.com

March | April 2013

13

Profile

THE WEST GETS

FRESH

Gary Sorenson, vice-president and COO of H.Y. Louie

H.Y. Louie takes a cue from open markets to create a food experience with its new format

By Noelle Stapinsky

14

March | April 2013

In the waterfront community of West Vancouver, foodies get their fix perusing locally sourced artisanal cheeses, snapping up the catch of the day straight from the Pacific, ordering their lobster or crab steamed to go, and blending their own balsamic vinegar. But this public market style layout isn’t bustling with independent merchants; this is Fresh St. Market, H.Y. Louie’s newest banner pilot store, which celebrated its grand opening in January.

Housed in a former Safeway location, the 28,000-sq.-ft. store boasts 60 per cent fresh and only 40 per cent grocery, a concept that takes inspiration from renowned markets, such as Seattle’s Pike Place and Vancouver’s own Granville Island.

“The idea started about a year ago,” says Gary Sorenson, vice-president and COO of H.Y. Louie, one of British Columbia’s largest grocery retailers. “I thought that the market was right for a different kind of store entry. Our mantra [for this banner] is local, fresh food made affordable.”

The concept was to create an open farm-style market that showcases unique food offerings in an environment that would inspire people to gather and

experience food. And playing off the eat local, buy local trend, the Fresh St. Market team searched online and hit the road to scour surrounding regions for locally produced foods.

“We buy B.C. first, Canadian second, and then we go outside of the country for products that we can’t procure here,” says Sorenson.

Each section is cleverly named – C’est Cheese, The Chop House, Howe Sound Seafood Co., 13 Bakers, and the 16th Street Deli – and designed in a market kiosk format. The enthusiastic staff greet customers and introduce them to regional offerings such as local artisanal cheeses, chicken and lamb from the Fraser Valley, seafood that’s 80 per cent Ocean Wise and sourced directly from nearby waters, and sweets from a Fraser Valley chocolatier. Even the produce section is predominantly B.C.-grown fruits and vegetables, based on seasonal harvest times.

A smoked Gouda that’s exclusive to the store and made by a cheese maker on Vancouver Island is already an item the store sells out of regularly. “We did some sampling and as people try it, they buy it. It’s all word of mouth that’s creating the buzz,” says Sorenson.

Profile

Based on harvest times, Fresh St. stocks many B.C.-grown fruits and vegetables

For items not available locally, Fresh St. Market looks to Alberta for beef, Nova Scotia for lobster, and New York for its famous Carnegie Deli Cheesecake.

The retailer upped the ante in the bulk section with a self-serve balsamic vinegar selection, fresh honey, and a plethora of nuts that customers can grind into custom butters – almond butter has proven to be a store favourite so far.

And the grocery aisles don’t disappoint either; they feature an array of unique sauces, an extensive olive oil and pasta selection, and many other imported specialty products. “We also have one of the largest varieties of chili peppers in the lower mainland,” says Sorenson. “It’s one of those offers that not everyone is going to buy, but if they’re creating a special dish that requires something like that, chances are we have it.”

Even the ghost chili, one of the hottest peppers in the world, which Sorenson admits he has not tried but has read enough about to be nervous, is available.

To further customize the food experience, Sorenson says they worked with Sonora Resort’s executive chef Terry Pichor and celebrity chef Karen Barnaby – who is also producing a private label for the market – to

grocerybusiness.ca

develop recipes and product ideas that would be exclusive to Fresh St. “We wanted to make this store a gathering place, not just a place you go to shop,” says Sorenson.

Café-style seating encourages customers to linger and enjoy the store’s ready-to-go offerings, including sushi, sandwiches and an extensive salad bar. And to stay engaged with its customers, Fresh St. plans to use social media to let shoppers know, for example, if a salmon run has come in, or when local corn has arrived.

Sorenson adds that although he expects Fresh St. customers will have a smaller basket size per trip than H.Y. Louie’s IGA Marketplace shoppers, they will be shopping more frequently, perhaps three times or more per week.

Based on the success of this new concept, H.Y. Louie is already eyeing three more locations in the lower mainland. But this concept is far from a cookie-cutter banner, he adds; each location will be unique in design.

“ Fresh Street is already a hit and it’s no surprise that this unique and forwardthinking offering has come out of Brant Louie’s entrepreneurial organization.”

John Scott President, CEO of the Canadian Federation of Independent Grocers

March | April 2013

15

Exit Interview

BORN: Kirkland Lake, Ontario EDUCATED: Queen’s University CAREER: Government of Alberta, Scott & Fenrich Consultants Incorporated, Canadian Federation of Independent Grocers FAMILY: “Family is the most important thing in my life. Married to Michelle and together have raised three tremendous young people – Nicole, Jared and Chris – blessed with one very active granddaughter, Isla!”

John Scott

After 21 successful years as CFIG president and CEO, John Scott is on to new challenges and opportunities. High on his agenda are public speaking, consulting and continued involvement with the Vineland Research and Innovation Centre.

Karen James : You were trained as an economist; why did you choose to get involved with the food industry?

John Scott : I had a consulting business in Edmonton and was asked to assist independents to achieve an increase in milk pricing.

During that project, I examined the grocery business and became fascinated by its thin margins and strategic positioning of the key players. The more research I did, the more interesting it became to the point that today it’s now a bit of a hobby. I like to observe 16

March | April 2013

various initiatives and in my own mind assess their relative chances of success. Heck, I even speak on the topic now.

KJ : Were there mentors whose input you valued along the way?

JS : Certainly. For example, Alex Campbell and Anthony Longo taught me the essence of differentiation; Frank Coleman, Lawrence Lanovaz and Frank Lovsin gave sound lessons in dealing with business in smaller centres; and Peter Singer and Al Graham both were

phenomenal instructors on the industry.

I went to leadership school on Steve van der Leest and Ken Knox (former deputy minister of the Ontario Ministry of Agriculture and Food).

Our industry knows Steve well and he always offered a terrific perspective. I continue to consult with Ken. He is the ultimate mentor, the guy that you would follow into a room of a thousand knives because he knows how to navigate through.

I could go on – there are so many terrific people.

KJ : As you move into the next phase, is there a single accomplishment that stands out for you?

JS : The fact that CFIG has developed into a relationship-based organization. It became like a family unit, which included our retail members and also integrated the supplier community. And, like a family, we squabble but at the end of the day we come together for the benefit of the independent grocer. This is unbelievably unique, and it’s something that the CFIG board, my successor, the membership and everybody involved, must work very hard to maintain and enhance.

KJ : Economists are known for their predictions; what do you think the Canadian grocery retail landscape will look like over the next five to 10 years?

JS : It’s going to be dramatically different.

There are so many facets that will come into play, primarily because of the evolving

Exit Interview

CFIG has developed into a relationship-based organization.

It became like a family unit, which included our retail members and also integrated the supplier community. demographics of our population centres and the dynamics of disposable income.

In the short term there will be another round of consolidation because of the level of competition, tight margins and relatively slow population growth. There just isn’t enough “filling in the pie” to accommodate the growth aspirations of everyone in the market.

There is also accelerating urbanization. How do you deliver food efficiently into high-density inner cities and condo projects? Anyone who is forward-thinking would be smart to spend some time in New York City and London, as I did last year, to have a look at how innovative companies are winning in these areas.

Then there is the impact of ethnic. Not only will the visible ethnic population base expand, but Canadians will continue to embrace international foods. Those grocers who choose not to incorporate at least some ethnic foods and concepts in their stores are going to experience significant challenges.

I also think online food shopping is going to have a major impact. We’re in the embryonic stages of Internet grocery shopping, but the Echo generation that David Foot refers to anticipate and embrace technological change – and that includes how they purchase food.

But the greatest impact will come from the aging baby boomers. I look at smaller formats located in retirement communities and think, that is going to be the future. Stores that create a sense of community, offer smaller portions, high-quality prepared foods and can

grocerybusiness.ca

integrate health services with the grocery shopping experience will win in a major way.

KJ : Given these changes, what do you feel will be the biggest challenge for the food industry?

JS : Players must understand and embrace the fact that the landscape is shifting very quickly and dramatically. Each will need to realign all aspects of their offering to be strategically positioned to take advantage of the obvious opportunity. Acknowledging that there is fast-paced change, then capitalizing on it will be the ultimate test in the industry of the future.

KJ : You’ve mentioned that you plan to continue your involvement in the broader food industry. What does that look like?

JS : I’m looking forward to doing a number of things. My hobby of assessing the strategies of this fascinating industry will continue. I enjoy and have been approached to do some speaking. I will also be working on presentations on the evolving strategies of the players and the lessons to be learned from true innovation. I’ll also do a limited amount of consulting.

I’m very privileged to Chair the acclaimed Vineland Research and Innovation Centre and that will continue for some time.

I’m also hoping to pursue some additional university education. And I will definitely spend more time on my passions: family activities,

golf and I suspect that my rose garden will now be 10-times better!

(John’s wife) Michelle will continue as head of the Grocery Foundation, so we’ll be around.

KJ : We’ve known each other for most of your years at CFIG, and in my view you’ve had the most sustained impact on this industry of any single individual. What do you hope your legacy will be?

JS : One would be that a financially healthy, productive, progressive and relevant CFIG exists well into the future. The right leader, together with the fantastic boards that the members elect year-after-year, will take it there.

Also, I have spent time with many of individual grocers and I hope I have made a contribution to the long-term well-being and sustainability of their businesses.

KJ : Any final comments?

JS : This industry has been wonderful to me and my family, and my participation in it is an experience that I will always cherish.

You’ll be missed, John. All the best as you embark on a new chapter.

March | April 2013

17

Bill O’Reilly

Brett Favre

The No-Spin Zone

The Gunslinger

Jim Gaffigan

Alton Brown

Ready, Set, Eat!

TV Food Shows and Their Impact

Carmine Gallo

Erik Qualman

Lessons from The Apple Store

Socialnomics

Marcus Buckingham

Lowell Catlett

Turn Strengths Into Competitive Advantage

Food: Seeing 20-20 in 2020

Harold Lloyd

Jack Li

Grand Slam Deli-Bakery Ideas

Growth Opportunities in Fresh Food

Join The Big Leagues Get off the bench and into

Play Like A Champion Become the MVP by learning

An All-Star Line-Up Your ticket gets you the best seat

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the game by practicing with other Foodie All-Stars in the world of dairy, deli, bakery, and foodservice. Tryouts are open for buyers, merchandisers, marketers, brokers, and distributors looking to join the best team in the business for new products, new knowledge, and new actionable ideas. in the house to learn from other top performers.

You can attend all three days of educational sessions to gain new perspectives and knowledge from the best players inside and outside the industry.

Headliners will speak on trends, marketing, consumer behavior, growth opportunities, leadership, lifestyle trends, and customer loyalty.

a new playbook, exchanging winning tips and ideas, and networking with over 8,700 of your new teammates. New trends and products can be found on the 1,600-booth Expo Floor, in the Show & Sell Merchandising Center, or at the other industry Special Events including the WMMB Party. square-foot merchandising idea center where you’ll experience the creativity and imagination of retail merchandisers in a real store setting. See, taste, and experience new ideas in layout, displays, case sets, signage, and themed-selling. A value-added bonus is your very own Idea & Photo CD for putting great ideas into action.

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Technology

MAKING THE MOST OF

MOBILE MARKETING

By Rosanne Caron

Using mobile devices as a way to talk to your customers while they are in your store seems like an idea whose time has come. But can mobile devices help drive traffic to your store as well?

A recent British study measured ways consumers are using their mobile devices to interact with out-of-home advertising to drive retail sales.

Using near-field communication tags or a QR code, Morrisons Supermarkets, a large British retailer, and its 13 supplier partners including Unilever’s Vaseline, Toni & Guy and Magnum brands, tested interactive content including coupon offers that would allow consumers to directly engage with the participating brands at mall posters and bus shelters.

Once consumers had downloaded a coupon/ voucher from the brand advertisement, they were able to redeem it immediately at the nearby Morrisons, thereby driving traffic and purchases particularly during the busy afterwork period.

The U.K. is ahead of Canada in integrating mobile and out-of-home advertising and this research can provide insight to Canadian marketers on what type of offers and messaging generate the most conversions. There’s a high level of interest from consumers who want to interact with brands via their mobile devices, so we expect to see more of these types of out-ofhome campaigns in the future.

TAKE AWAY

“There’s a high level of interest from consumers who want to interact with brands via their mobile devices, so we expect to see more of these types of out-ofhome campaigns in the future.”

Showrooming Shutout Out-of-home ads closest to a store had the highest rate of redemption, driving retail foot traffic Consumers should be able to redeem coupons and vouchers immediately and with ease. grocerybusiness.ca

March | April 2013

19

A S p e c i a l T h a n k s To O u r G a l a S p o n s o r s The Grocery Foundation would like to thank the following Platinum Sponsors for their ongoing support of the Night to Nurture Gala:

Corporate Sponsors

Wine Sponsor

Dinner Sponsors

Technology

CONSUMER MOBILE DEVICE RESPONSE TO OUT-OF-HOME ADS

25%

24% Overall interaction with ads 21% Ads with content and a link

24%

26% Ads with coupons/vouchers 49% Ads with updated content 25% Ads with content only

7%

Average coupon redemption rate

18% Highest redemption rate

3,100

6,000

UNIQUE INTERACTIONS

TOTAL INTERACTIONS

49%

21%

Test sites: 300 bus shelters and mall posters in one mall in Reading, England over a four-week period Number of unique interactions with out-of-home ads: 3,100 Number of total interactions with out-of-home ads: 6,000

18%

MOBILE MARKETING LEARNINGS: »» Results showed that consumers saw the experience as a gateway for more brand information

How Do Canadians Mobilize?

16%

of all smartphones in Canada are NFC enabled

17

%

of Canadians have made a purchase on their mobile phone/smartphone within the past six months

14%

of Canadians claim to have never read an ad on their phone

61

%

or 13.4 million users of mobile phones in Canada own a smartphone

74

%

of Canadians say they want to stay connected to brands that send them coupons for product discounts or free products

Source: Comscore, September, 2012 and Ipsos Global Advisor 2012

grocerybusiness.ca

7%

26%

Most active period: Late afternoon when after-work traffic was greatest

»» Brands that elicited the most positive interactions had relevant content and a strong call to action »» Redemption rates for coupons were highest for poster sites in proximity to the retailer making the offer »» Redemption rates increased throughout the test period as more consumers became familiar with the technology »» Video content can drive interaction engagement - Average download conversion rate: 28% - New content generated the highest conversion rate: 49%

Rosanne Caron is the president of the Out-of-Home Marketing Association of Canada. rcaron@omaccanada.ca

March | April 2013

21

The Consumer

INDEPENDENCE DAY For the increasing number of Canadians living solo, convenience and fresh are top of mind when choosing where to shop

By Noelle Stapinsky

Whether they’re divorced, widowed or putting off marriage until later in life (or never), more Canadians are living alone than ever before. In fact, a 2011 Statistics Canada census revealed that there are 3.7 million single-person households, making up 28 per cent of total residences and actually surpassing couples with children for the first time in the country’s history.

This demographical shift means that dwelling solo is becoming a new normal. For grocery manufacturers and retailers that can hone in on whom their core customers are, or diversify offerings to meet the needs of a variety of shoppers, this new category is creating big opportunities.

According to the census, single baby boomers aged 65 and over make up the majority of one-person households, accounting for 33 per cent – most of which are female. And younger singles in their late 20s, early 30s, and mid to late 40s, are more likely to be male.

MORE TRIPS, MORE SALES OPPORTUNITIES

Household members OR

+ grocerybusiness.ca

Trips per shopper

$ spent per trip

182

$36

177

$51

Singles pick up more than just groceries Cooking classes and grocery shopping rank as two of the top 10 places to meet a single lady on Askmen.com. And likewise, Marie Claire magazine ranks the supermarket as one of the best spots to meet a single man.

Some grocery retailers that offer cooking classes have hosted courses for singles at locations that have an abundance of them flowing through the aisles. Longo’s, a Toronto-based independent, has and is now considering adding a speed dating/cooking class to its roster at various locations in the near future.

March | April 2013

23

The Consumer

Shopping Habits Will Change

Frequent Shopping and Smaller Baskets

More Online Replenishment

Lin Ai, an economist specializing in food manufacturing for the Conference Board of Canada, suggests that retailers should understand what demographic is within five to 10 km of their stores. “Look at the employment rate, salary range, population and the age of the population. Single households may have tighter budgets or [for the younger demographic] food might not be a priority.”

The NPD group’s Eating Patterns in Canada report says that Canadians’ eating habits are influenced by the composition of their households, and this holds true for single person households.

Consumers who live in households of two or more are far more concerned about accommodating food preferences. “But singles indicate they are more concerned with ease when planning meals, they skip more meals and use fewer ingredients in the dishes they make,” says Joel Gregoire of the NPD Group.

For easily prepared foods, singles are more likely to eat frozen meals or sandwiches for supper compared to other household types. “But one important consideration to remember is that not all singles share the same concerns when eating,” says Gregoire. “An 18- to 34-year-old male is less likely to be concerned with health compared to a single woman over 65. And younger singles are more likely to skip meals compared to older singles.”

Indeed, household sizes are shrinking, and as more Canadians choose to go it alone, their shopping habits are changing. With the condo boom in major urban centres, Ai says, “People might not be able to store large Costco-sized food or household items. For the dollar value

24

March | April 2013

More Interest in Local Stores they’ll still buy a large-sized laundry detergent, but they probably won’t do the same with food because they don’t have a large freezer, for example.”

With this new wave of consumers, retailers can expect smaller basket-sized purchases and more frequent visits. To attract these savvy singles, those offering fresh, convenience and value will be the top destinations.

CANADIAN HOUSEHOLD SIZE Continues to Shrink 3.7

3.3

3.1

3.0

2.9

1-2 Member Households 1970: 38.7% 2012: 62.7%

1970 1980 1990 2000 2010

Average Canadian Family Size

a leading brewing system in Canada*

introduces

NEW

Lemon flavoured Iced tea

Lemonade Iced Tea

3 cool new flavours!

NEW

Raspberry flavoured Iced tea

NEW

Sweet & Creamy Ready‐to‐Drink Iced Coffee

French Vanilla Iced Coffee

SNAPPLE is a registered trademark of Snapple Beverages Corp. used under license.

®

Quench your customers’ thirst and BOOST YOUR SALES with new tastes plus an

EXCITING CONSUMER CONTEST!

*NPD Group, National all channels, Unit share, 52 weeks ending December 2012, NPD data does not include all retailers and is estimated to represent 70% to 80% of the total market.

VENDOR

Led by the emerging single-serve segment, the coffee category has been expanding in the last two years providing a healthy double-digit dollar growth.1 This segment is experiencing natural growth due to the popularity of single-serve coffee brewers resulting in increased trade up consumption. In addition, regular roast coffee consumers (in can and bag formats) are evolving and are trading up to higher end brands, seeking different varieties that fit their specific taste.

To differentiate themselves, retailers should look to become a coffee destination by having a dedicated premium coffee section with a wide range of products.

Another way to differentiate in the single-serve section would be to group products by brewer brands, like Keurig® and Tassimo®, as consumers are looking for products to brew with the machine they have at home. As the demand increases with the popularity of these products, opportunities remain for retailers to reallocate space to coffee, which is one of the fastest growing categories, and in need of incremental space.

ADVISOR

•

COFFEE

1 (Nielsen Market Track, National all channels, dollars growth, 52 weeks ending December 15th 2012).

SPONSORED BY

coffee is a category consumers are looking for when they enter the store

Coffee is a dynamic category with growth led by the single-serve segment $ Vol Latest 52 Wks

$ Growth % v.s. Last Year

TL COFFEE INCL INSTANT

1,106,230,716

16%

GROUND COFFEE

528,441,889

-4%

SINGLE SERVE

313,366,603

105%

INSTANT COFFEE

164,452,411

1%

TL WHOLE BEAN

99,969,813

14%

65% 86%

of Canadians that drink coffee = second most consumed drink after tap water1 1. Coffee Association of Canada, 2012 Coffee drinking Trends in Canada

of shoppers have planned to buy coffee before they enter the store1 1. GMCR Canada study among a representative sample of 600 coffee shoppers across Canada, March 2011

Capitalize on brewer growth and maximize shelf space for single-serve beverages 3,000,000 2,500,000

$ Share Units

2,000,000

14.9

9.0

INSTANT COFFEE

28.3

SINGLE SERVE

TL WHOLE BEAN

47.8

1,000,000

82% Share

65% Share

57% Share

0 2010 Single-Serve Coffee Makers

Source: Nielsen Market Track, National all channels, Dollar share, 52 weeks ending January 12th 2013

43%

1,500,000

500,000 GROUND COFFEE

18%

35%

2011

2012 Auto-Drip/Espresso Coffee Makers

Source: NPD Group, National all channels, NPD data does not include all retailers and is estimated to represent 70% to 80% of the total market.

G M C R C A N A DA - Y O U R P A R T N E R T O B U I L D A S T R O N G E R C AT EG O R Y

COFFEE CATEGORY HAS A HEALTHY GROWTH ACROSS ALL REGIONS OF CANADA

Quebec British Columbia

Alberta

Saskatchewan

Manitoba

$ SALES =

Ontario $ SALES =

205 Million

GROWTH =

18%

The West

259 Million

286 Million

20%

$ SALES = GROWTH =

Nova Scotia

P.E.I.

GROWTH =

New Brunswick

Maritimes $ SALES =

39 Million GROWTH =

Opportunity for the West region to develop the single serve segment to close the GAP with the region importance in coffee.

18%

REGION IMPORTANCE

Western provices

22%

Ontario

33%

32%

IN SINGLE SERVE IN TL GROCERY COMPOSITE2

31% 0

5

10

15

20

25

30

35

Maritimes

Quebec

36%

IN COFFEE

0

40

5

10

15

20

25

36%

26%

37%

26%

30

5%

26%

35

40

0

5

10

15

20

25

7% 6% 30

0

1

2

3

4

5

6

7

8

Source: Nielsen Market Track, National GB+DR+MM+GM+WC, Dollars, 52 weeks ending January 2013 2. Nielsen Homescan, All channels, 52 weeks ending January 2013

AVERAGE SPEND PER TRIP ON COFFEE HAS INCREASED BY 47% IN 2 YEARS $ 15$15

$12.36

$13.31

WITHIN TRADITIONAL COFFEE, IT’S THE PREMIUM BRANDS THAT ARE SEEING GROWTH

47%

Premium coffee

+7%

Mainstream coffee

-10%

Source: Nielsen Market Track, National Grocery banners+Drugs+Mass Merch, Dollar growth, 26 weeks ending January 12th 2013. Segmentation based on regular price per pound, mainstream coffee including private labels.

1212

Merchandising displays are an important source of growth

99 9 Million

66

9 Million

178 Million

33

2011

00 2010

2011

2012

Source: Nielsen Homescan, National all channels, 52 weeks ending December 29th 2012

Historical Volume

178 Million 2012

9 Million Additionnal sales from display

}

Average $ per trip

$9.08

50% INCREASE THROUGH THE USE OF DISPLAYS.

Additionnal sales excluding display

Additionnal sales from display

Source: Nielsen Market Track, National GB+DR+MM, Dollars, Total Coffee Category 12 weeks ending January 2013

TYPE

MODULAR

TYPE

COMPACT

FLEXIBLE, ADAPTABLE, UNIQUE

CONVENTIONAL, STYLISH, MODERN

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Applesque design counter scale with the cutting edge Bizerba K scale App designed to inform your operator so the customer feels like they are talking to a foodie or a chef. Not to mention industry leading application integration and power savings backed by Bizerba workmanship.

K-FLEX

KH 100

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A TRADITION OF INNOVATION. Bizerba has been focused on weighing technology since 1866. We provide state-ofthe-art PC Based Scale Hardware and Software solutions for full-service and pre-pack departments with a primary focus on increasing your sales and profits. Closer to your business, flexible for your needs, ready for the challenges of a global economy. www.bizerba.com

Fresh Perspective Whether she’s out in the fields with growers or watching how members shop, Costco’s Oleen Smethurst found her true calling in the vibrant, flavourful world of produce

By Noelle Stapinsky

Cover Story

OLEEN SMETHURST

Fresh Perspective BIRTHPLACE: Montreal, Quebec EDUCATION: Vanier CEGEP, and McGill University – marketing program FIRST JOB AFTER COLLEGE: Worked at a packaging company, and then a health and beauty aid manufacturer.

FIRST JOB AT COSTCO: Inventory-control specialist (ICS) in the candy and tobacco department for about a year, and then became an assistant buyer in the freezer department.

WHAT SHE ENJOYS MOST ABOUT HER JOB: Travelling the world, discovering innovative products and meeting the most amazing people.

PERSONAL INTERESTS AND HOBBIES: Trying new foods, good wine and travelling.

30

March | April 2013

When Oleen Smethurst was promoted to Costco’s produce department, it was a whole new world to her. But she quickly became drawn to the passion of the industry as it propelled her through eight years of what she considers the biggest professional success of her career.

Smethurst moved from Montreal to Vancouver in the early ’90s in search of a fresh start – employment opportunities were slim in La Belle Province. “I didn’t actually know what Costco was at the time, but there was a job opening,” says Smethurst with a laugh. “That’s how it all started.”

It’s been over 20 years since she joined the wholesaler. During that time, she has held a variety of positions throughout its food departments – from candy and tobacco to dry grocery and cooler and deli. “Costco moves people around a lot, so you end up doing new things all the time,” says Smethurst.

But in 2005, when she moved to her current position as an assistant general merchandise manager in the Produce Buying and Operations department, she became immediately captivated by the industry. “When I first came into this role, I knew nothing about produce. To educate myself, I felt I needed to understand how things are grown,” says Smethurst. “To be honest with you, the first time I walked into a hothouse, I was flabbergasted. This part of my career has been a fascinating education and evolution for me.”

Looking back, Smethurst says, “I never thought I’d be at any company as long as I’ve been here, but Costco has provided so much opportunity and it’s been a really fun career.”

Indeed, travelling the world to meet with growers and search for exciting new products, and staying on top of consumer demand, keeps Smethurst on her toes.

But it is the personal relationships Costco develops with its growers and the delivery of such high-quality produce – which its members have come to expect – that Smethurst credits for the success of its produce department.

Q&A with Oleen Smethurst

Grocery Business: Have you noticed any significant changes to consumer behaviour over the years?

OS: We’re seeing increased consumption. I have stood in a warehouse and watched what people were putting in their shopping carts, and they really are shopping for a diverse amount of produce. They’re not just buying a bag of apples. They’re buying berries, grapes and stone fruits. They’re purchasing a multitude of items, and we need to be aware of that when designing our pack sizes.

We’ve always been renowned for large packs, but you have to make sure the members can get through that pack while the quality of the product is still at its peak. And we recognize that family sizes have shrunk, so we have adjusted some sizes.

We’ve also had huge success with anything mini, such as mini cucumbers and small grape tomatoes.

GB: As a wholesaler, what are the key drivers in growing your produce sales?

OS: The key drivers are really about focusing on taste, quality and innovation. At Costco, we do everything based on specifications so that our vendors know what the expectation is, and our depots know what to look for to accept or refuse products. And we’re sticklers on what we set the specifications to be. That may be higher than Canadian standards, but we’re really particular.

We also have to taste products before they come in to make sure that they meet our specs.

I think we’ve gone a step further than a lot of retailers because we really focus on the basics.

We try to know every grower that deals with us, which is hard to do and a big goal. grocerybusiness.ca

GB: Do you think that Costco members have unique produce needs?

OS: We have a very trusting relationship with our members. I think they’ve had really good success with what they’ve purchased and if they’re happy, they’re that much more willing to try something new. There’s a huge connection between the faith our members have in us and our responsibility to do the right thing for them.

And the more you offer better-tasting products, the more the customer comes to expect it. I also think that members’ tastes are changing and as we at Costco become more educated, what we buy evolves too.

GB: What do you consider the biggest challenge as you travel the world sourcing quality produce?

OS: I think the biggest challenge will be competing for quality produce with other markets. For instance, there are emerging markets such as Asia, which are willing to pay high prices for produce. We’re all competing to source the right quality at the right price for our consumers.

GB: What are your strategies to compete with these emerging markets?

OS: It’s getting out to the fields and meeting the growers. It’s all part of building those partnerships.

GB: You have recently returned from Fruit Logistica in Germany. Were there any trends or new products that particularly impressed you?

OS: I’m not going to give a lot of details because I’m trying to keep my competitive advantage on this, but I think packaging is

changing. European companies are very focused on reducing the amount of packaging, and they have developed efficiencies that we haven’t yet. This is something we’re looking at.

GB: What do you feel are the key components of a successful relationship with your vendors?

OS: The first word that always comes to my mind is “partnership.” I think part of that entails knowing when to give and take.

Our vendors have been a very important component of our growth and the more you understand about what they’re up against and what they’re capable of, the more you can brainstorm together.

Transparency, clear communication, educating our vendors on what our needs and expectations are and, obviously, listening to our vendors is all very important.

There also needs to be reliability on both sides. If we commit, we honour that commitment, and they do the same. If it’s a new vendor, we really have to explain who we are, what we are, what we do, what the expectation is and how Costco goes to market.

GB: What do you consider the main qualities of leadership?

OS: Clarity, vision and the ability to strategize.

It’s about getting all the stakeholders involved to take ownership of their part of the business – from the Costco side right through to the growers.

Also, I think having the ability to laugh and not take yourself too seriously is a necessity.

March | April 2013

31

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Healthy Consumer

A united voice for

healthy choice Retail Council of Canada partners with Health Canada to amplify health and wellness messages to the masses

By Noelle Stapinsky Carol Dombrow, Health Check, David Wilkes, Retail Council of Canada and Leona Aglukkaq, Federal Minister of Health at the launch of a new phase of Health Canada’s Eat Well campaign

Health Canada has been publishing its national Food Guide for over 70 years to educate Canadians on healthy food choices. Similarly, food manufacturers and retailers have also maintained a strong focus on promoting health and wellness. That’s why the Retail Council of Canada (RCC) and Health Canada have partnered in a new initiative to bring industry and government together to deliver cohesive messaging to Canadians and support the Eat Well campaign.

The collaborative information will also include the Food and Consumer Products of Canada’s (FCPC) Nutrition Facts campaign, which was developed to help Canadians better understand and use the Nutrition Facts table, specifically the % Daily Value information.

“What we need as an industry is one message, not multiple,” says David Wilkes, senior vice-president of the RCC. “With this new initiative, there is a commitment from retailers and manufacturers within the industry to educate Canadians and provide them with the information and tools they need to make the right choices for a healthy lifestyle.”

Together, Health Canada and the RCC have developed four themed messaging periods

“We want to not just educate, but deliver simple, new ways to activate those choices that consumers need to make for their own lifestyle.” grocerybusiness.ca

that will be rolled out over the next year. The first debuted in March and focuses on these four core messages around food skills: 1. Use % Daily Value to compare and choose food products 2. Add more colour and crunch to your cart in the produce section 3. Plan meals 4. Make a shopping list to help save time and money Although the other three themes are still in development and being tested by Health Canada through its Canadian Community Health survey, Alison Corbett, director of health and wellness and environment for RCC, says, “The summer theme will be around healthy eating, September’s will focus on back-toschool, and January’s will be about getting back into healthy habits.”

To add colourful flare to the themes and information, Health Canada developed a zucchini character sporting various healthy edible accoutrements. “This character is a promotional component for the Eat Well campaign that Health Canada launched in September 2012,” says William Wells, a Health Canada media relations officer. And it has already been used in some media activities, such as advertising campaigns in consumer magazines, online and various television networks.

For retailers and manufacturers, the vibrant promotional character and campaign messages will also be available for use on websites, in social media and for in-store information and flyers.

“All of our members have agreed to include the themed messages in a variety of formats throughout their range of communication tools,” says Wilkes.

“One of the handouts that will be available to retailers is a shopping list. This list is broken down into Food Guide sections to make sure shoppers are picking up items from all sections.

On one of the versions of the handout there is also % Daily Value information for customers to use while shopping.”

Since many RCC members already have programs in place to promote healthy choices, Wilkes says that this initiative is also meant to augment and support their current efforts.

“We want to not just educate, but deliver simple, new ways to activate those choices that consumers need to make for their own lifestyle.”

Such a union between Canada’s food industry and government is an opportunity to deliver a stronger and more succinct message through educational and information materials, through one voice to a common audience.

March | April 2013

33

International - Hard Discount

THE

ALDI ADVANTAGE

By Elaine Walker

“We don’t match other stores’ prices because that would mean raising ours,” proclaims the Aldi website.

In fact, the discount grocery chain offers savings of as much as 50 per cent off the prices of traditional grocery stores, and even 20 per cent less than Walmart.

Aldi’s limited-assortment stores carry almost exclusively private-label products in a no-frills environment that is about one-third the size of a traditional grocery store.

For budget-conscious shoppers like Barbara Mushlin of Coral Springs, Fla., giving up name-brand products is a trade-off worth making, especially since she doesn’t feel she is sacrificing taste.

While Mushlin appreciates the savings, what keeps her coming back is the quality. With only limited exceptions, she finds Aldi’s products are easily equal to or better than the

grocerybusiness.ca

brand-name equivalent. “It has to fit our palate and what we like, not just our pocketbook,” says Mushlin, who shops Aldi about every other week. “They have the absolute best dark chocolate, and I have to have my dark chocolate.”

Aldi has been on an aggressive expansion program in the U.S., opening between 50 and 80 stores per year and venturing into both urban and suburban markets from Chicago to Miami and New York. Since opening its first U.S. stores in Iowa in 1976, the company has grown to 1,200 stores in 32 states, concentrated in the Midwest and on the East Coast.

The retailer plans to continue to expand at a similar pace this year and beyond.

“They’ve really made spectacular inroads in the U.S. in the last five years,” says Neil Stern, senior partner with McMillan Doolittle, a Chicago-based retail consultant. “They appeal

Aldi doesn’t aim to be the consumer destination for one-stop shopping; rather, it limits its offering to the most popular items and sizes purchased by the average consumer.

March | April 2013

35

International - Hard Discount

Consumer Attitudes to Discount Grocery Shopping Completely agree

100

39% 80

38%

40%

Agree

36%

Neutral Do not agree

60

52% 40

52%

Do not agree at all

47%

45%

20

I gr fee ea l t v pro al ud ue fo whe m I rm n y f wi av ll s ym Ig ou to on et rit ck ey e u pr p od wh uc en ts o It is ne ry on o to sa f Is b le uy an tud pr d yt od di h sc e fl u ou y ar cts e nt rs e th on a sb ,i sa t ef nse or rt le e s, m p y s ro ho mo pp tio in ns g tri p

0

Although Aldi has stated that Canada isn’t in its expansion plans at this time, Jeff Doucette, general manager of Field Agent Canada, says: “I think that Canada is prime for hard discount retailers such as Germany’s Aldi and Lidl. Aldi has a growing presence in the U.S. now and is on our doorstep.

Not only do both retailers rank in the Top 10 biggest retailers in the world, they are growing at breakneck speed.

They also do not need a lot of space to set up their small, focused and efficient stores. They usually grow in clusters of 25 stores that spring up around one central warehouse. A few years ago in Hungary, Aldi opened nearly 30 stores in one day with an instant market share hit to the big players there.”

36

March | April 2013

Source: BrandSpark Canadian Shopper Study, 2013

to a customer who needs to save money, or those who are on a limited budget. There are a lot of customers who fit that bill. The recession has clearly helped [Aldi].”

Stern estimates Aldi’s stores generate close to $8 million a year, or about one-third the volume of a typical supermarket. The privately-held company doesn’t release sales figures, but Supermarket News estimated that number at US$7.3 billion for 2011. Aldi currently draws more than 20 million customers a month to its U.S. stores.

Aldi is a U.S. subsidiary of the German grocery empire owned by the Albrecht family, who also owns Trader Joe’s in the U.S. While the chain also has stores across Europe and Australia, Canada is not on the horizon. “We have no plans for that right now,” says an Aldi spokesperson.

The Aldi format is about 10,000 sq.ft., comparable to the size of a typical drugstore.

The stores have no fresh bakery or pharmacy, but they do offer fresh meat and produce.

Pringles is one of the few name brands you’ll find on the shelves. That’s because Aldi couldn’t make a comparable product. Other brand-name products are available on limitedtime specials when the retailer gets a good deal, like Butterball turkeys for the holidays.

Otherwise, the shelves are stocked with Aldi brands like Nature’s Nectar juices and Clancy’s chips. You’ll find gourmet products in the Specially Selected line, which offers items like Italian Mascarpone Torta and Honey Chipotle Encrusted Salmon.

Aldi doesn’t aim to be the consumer destination for one-stop shopping; rather, it limits its offering to the most popular items and sizes purchased by the average consumer.

That means instead of a dozen or more different sizes and brands of peanut butter, Aldi has one.

The store design aims to maximize efficiency.

With only four or five aisles and an emphasis on self-service, Aldi stores have only three or four employees on duty at any one time.

International - Hard Discount

ALDI FACTS AND FIGURES * Carries only about 1,400 of the most frequently purchased grocery and household items, compared with approximately 40,000 items in a traditional grocery store. Aldi’s exclusive brand labels comprise nearly 95 per cent of SKUs. * Maximizes efficiency and savings by keeping stores open during only the most popular shopping hours.

Aldi’s exclusive private brands are stacked in an open carton self-serve fomat for a leaner, greener shopping experience.

The no-frills concept means everything is displayed in stacked open cartons. Customers must pack their own groceries using bags from home or ones they buy for a nominal charge at the store. And Aldi does not accept credit cards.

By keeping overhead costs low, Aldi can pass on the savings to the consumer.

Despite its rapid expansion, Aldi remains a small player in terms of overall market share in the U.S. grocery market, with less than two per cent, says Stern. “They’re really not trying to play the market share game. They have an opportunity to be a major force in the U.S. without being Walmart.”

* Customers pay 25 cents for a grocery cart. They get the quarter back at the end of the shopping trip, as long as the cart is returned to the rack. The goal is to cut down on labour needed to round up stray carts. * Offers a Double Guarantee on its products. If a customer isn’t satisfied, he or she returns the unused portion, or even just the packaging, to the store along with the receipt; Aldi will refund the money and provide a replacement product. * Pays its employees wages and benefits higher than the U.S. national average. Employees averaging more than 20 hours per week also get full health insurance benefits.

Top Consumer Reasons for Grocery Retailer Preference Close to where I live 49%

Offers the lowest everyday prices 35%

* Ranks 25th among North American grocery chains in 2012 gross sales, according to Supermarket News.

Provides circulars/flyers that highlight current sale-priced items 22%

They price match to competitors’ advertised prices 19%

Offers sales on brand name items 18%

Elaine Walker, an award-winning journalist based in the U.S., covers the retail sector for the Miami Herald.

Source: BrandSpark Canadian Shopper Study, 2013

grocerybusiness.ca

March | April 2013

37

DRIVE SALES WITH THESE

PRODUCT WINNERS

SINGLE DOSE LAUNDRY DETERGENT PACKS AIR FRESHENER Tide Pods - Detergent, Stain Remover & Brightener in one easy pop!

Febreze CAR Vent Clips Addresses the unmet needs of the Car Air Freshener consumer, by eliminating odours with a light fresh scent that lasts, while discretely melding into the auto dashboaord.

Delivers Significantly Improved Consumer Delight!* with a three chamber & cold water film technology. *Habits & Practices Study 2010 NA103213 (satisfaction today) US09D914 (satisfaction from PODS)

LIQUID LAUNDRY DETERGENT MEN’S SHAVING Gain Liquid Detergent Sunflower & Sunshine with Febreze Freshness

Gillette ProGlide Styler Razor

Gain Sunflower & Sunshine is a specially formulated product which leverages the exclusive Febreze technology in a detergent that delights consumers with floral scents they love, while giving them a great clean.

3-in-1 Power Groomer with Braun Trimmer Technology that trims evenly, shaves closely and edges accurately.

MEN’S DEODORANT FABRIC CARE Downy Unstopables In Wash Scent Booster Soluble PEG pastilles with perfume micro capsules that release scents through the day, to provide a long lasting scent that is designed to enable both regimen use and scent layering.

Old Spice Red Zone Invisible Solid Champion Anti-perspirant Old Spice Champion is the new scent from Old Spice on its premium Red Zone boutique.

The scent stands for endurance and performance and the SKU launch was supported by a holistic marketing plan centered around the 2012 Summer Olympics in London.

VOTED #1 IN 2013 BY CANADIAN CONSUMERS*

BABY CARE

SHAMPOO/CONDITIONER Head & Shoulders Green Apple Shampoo & Conditioner

Pampers Cruisers with 3-Way Fit Pampers Cruisers with 3-Way Fit give babies our best fit ever, offering up to 12 hours of leakage protection and the quilted softness of Swaddlers.

A duel-action formula shampoo and conditioner that cleans and cares for your scalp while you indulge in the aroma of our Green Apple scent.

SKIN CARE Olay Regenerist Micro Sculpting Cream Fragrance Free Regenerist’s #1 selling moisturizer,* now in Fragrance Free. Provide top performing moisturizer for those who seek Fragrance Free products. *based on unit sales of Micro-sculpting Cream in Grocery/Drug/Mass/Club during 12 months ending May 2012.

WOMEN’S SHAVING Satin Care® Shave Gel with a Touch of Olay Leverages Olay brand equity to drive increased trial of shave preparations. Specially designed for dry skin, its moisture-rich formula helps protect skin against moisture loss.

TAMPONS/PADS Always Infinity Radiant • Infinicel™ has a seamlessly thin material that is more flexible and is 60% more absorbent* * vs. Kotex Regular Ultra Thin with Wings.

FACE MAKEUP Covergirl & Olay Tone Rehab Foundation A premium 2-in-1 Foundation + Serum that drives incrementality to the powerhouse Covergirl & Olay Boutique via a unique 2-in-1 anti-aging benefit

*BNPA Category winners are chosen using consumer appeal and repurchase intent measures proprietary to BrandSpark International.

Winners are based on the highest numerical scores, and not necessarily on statistical significance. For more information visit www.bestnewproductawards.biz

*

Night to Nurture Gala

February 2nd, 2013: The grocery industry gathered for a gala evening, raising $2 million for Kids Help Phone and Breakfast for Learning

Children’s Choir Larry Murray, Chair of BFL; Andre Gagne, Chair of The Grocery Foundation; Michelle Scott, Executive Director, The Grocery Foundation

Rory and Vicki Lesperance

Silent Auction

The Pepsico Table 40

March | April 2013

Vicky and Tom Gunter, ConAgra with Don Henley

Duarto and Gabby Nobrega Breakthrough Communications and Consulting

Elaine Williams, Winner - 2013 Lexus CT200 with Charles Grant, GM, Don Valley North Lexus

Night to Nurture Gala

Don Henley

Yvonne and Steve Fox, NestlĂŠ Canada

Lindsay and Mike Forgione, Longo’s with Don Henley

Silent Auction

John Scott, CFIG, David and Brenda Wilkes, Retail Council of Canada

Silent Auction

Dan Bordun, Karen James, Tina Smith, Kevin Smith Debbie Marinangeli and Mike Marinangeli grocerybusiness.ca

Doug Gingrich and Adam Grogan, Maple Leaf Foods

Barb Hall and Chris Powell, Tree of Life March | April 2013

41

Kevin Smith Dan Bordun

Karen James

•

•

•

kevinsmith@grocerybusiness.ca

danbordun@grocerybusiness.ca

karenjames@grocerybusiness.ca

•

•

•

416 569-5005

416-817-5278

416-561-4744

Check out our website at: grocerybusinessmedia.ca

Best New Product Awards

Congratulations

to the 2013 Best New Product Award winners!

This year marks the Best New Product Award’s 10th anniversary, a milestone that is a testament to our close partnership with many of Canada’s leading CPG and media companies. Nationally, over 100,000 shoppers were surveyed and 220 product entries received, resulting in 69 categories and winners.

Thanks to our partners and participants for their support and congratulations to the Best New Product of the Year winners.

Robert Levy, President

Robert Levy, President

2013 BEST NEW PRODUCT WINNERS BEST HEALTH & BEAUTY PRODUCTS »» Pampers Cruisers - with 3 Way Fit »» Vaseline Total Moisture »» Colgate Transformers Toothpaste »» Abreva Pump »» Trojan Charged »» Dove Refresh+Care Invigorating Dry Shampoo »» Almay Intense I Smoky »» COVERGIRL and Olay Tone Rehab Foundation »» Maxidol Liquid Gels

»» Nicorette QuickMist Mouthspray »» Neutrogena Wet Skin Sunscreen Spray »» Always Infinity Radiant »» Colgate Optic White Toothpaste »» TUMS Freshers »» Trojan Vibrating Pulse Intimate Massager »» 2X DHA Ironkids Gummies »» Dove Shea Butter Cream Oil Body Wash »» Dove GoSleeveless Antiperspirant »» Gillette Satin Care Shave Gel with Olay

»» John Frieda Precision Foam Colour

BEST FOOD & BEVERAGE PRODUCTS

»» Nair Au Natural Orchid Bikini and Underarm Roll On Wax

»» Duncan Hines Apple Caramel Cake Mix

»» Dove Nourishing Oil Care Anti-Frizz Serum

»» Bud Light Lime Mojito

»» Aylmer Accents Cracked Black Pepper and Roasted Garlic »» Special K Crisps »» Bacardi BREEZER Spritzer Rum Coolers »» Hidden Valley Ranch Cheese Salad Dressing »» Wheat Thins Sweet Potato »» Philadelphia Cooking Creme »» Catelli Smart Side Dishes »» Smuckers Double Fruit Simple Blends »» Astro Zer0 SuperBerry Yogourt »» IÖGO Greko

BEST HOUSEHOLD PRODUCTS »» Febreze Car

»» Dove Style+Care Nourishing Curls Mousse

»» Dempster’s Smooth Multigrains Baked with 16 Whole Grains

»» Scrubbing Bubbles Bathroom Cleaner Colour Power

»» L’Oréal Hair Expertise Total Repair 5 Instant Miracle Mask

»» Special K Low Fat Granola

»» Ultra Palmolive Soft Touch with Vitamin E Dish Liquid

»» OFF! Deep Woods Dry »» Revlon ColorBurst Lip Butter »» L’Oréal Voluminous Power Collagen 24hr Mascara

»» Kraft Habanero Shredded Cheese »» Folgers Gourmet Selections K-Cup Packs »» SKOR Minis »» Almond Fresh Coconut

»» Downy Unstopables »» Ziploc Perfect Portions Bags »» Oxi-Clean Max Force Power Crystals »» Gain Sunflower and Sunshine

»» Nivea Relax & Recharge Shower Gel

»» MiO Liquid Water Enhancer

»» Old Spice Red Zone Invisible Solid Champion

»» Nestle Drumstick – Bigger Nugget

»» Gillette ProGlide Styler Razor

»» High Liner Flame Savours

»» Arm & Hammer Plus OxiClean Pet Fresh Carpet Odour Eliminator

»» Listerine ZERO Mouthwash

»» Dr.Oetker Ristorante

»» Tide Pods

»» Revlon Nail Enamel

»» Pepperoni Pesto

»» Vega One

»» Minute Maid Real Fruit Beverage

»» Head & Shoulders Green Apple Shampoo & Conditioner

»» Schneiders Country Naturals Mild Tuscan Countryside Sausages

»» Purina ONE Smartblend Premium Cat Food

»» Olay Regenerist Micro Sculpting Cream Fragrance Free grocerybusiness.ca

March | April 2013

43

Train, network and find inspiration at the most comprehensive restaurant and hospitality Show in the industry, featuring a dedicated floor and education track focused on beverage alcohol. You may just find that new product or flavor pairing that sends check averages soaring. But only if you’re here.

For more information visit Restaurant.org/Show or WineSpiritsBeer.org

3

18-21 MAY, 2013 MCCORMICK PLACE CHICAGO, ILLINOIS

Š2012 National Restaurant Association Solutions, LLC. All rights reserved.

Foreign Agricultural Service SPECIAL REPORT

The World Next Door You’re probably already aware that the United States grows everything from olives and dates to coffee beans, nuts and a wide array of fruits and vegetables. But did you know that Canadians prefer U.S.-sourced foods over any other imports? With availability, price, quality, taste and nutrition top of mind, it’s no wonder Canada has developed a taste for U.S. fresh produce and packaged foods.

By Angela Kryhul

grocerybusiness.ca

March | April 2013

45

Foreign Agricultural Service SPECIAL REPORT

The top U.S. exports to Canada include fresh vegetables and fruit, snack foods, red meat, and processed fruit and vegetables. Canada’s top exports to the U.S. include snack foods, seafood products, red meat, and live animals.

Get Connected!

– Foreign Agricultural Service, Ottawa

How the Foreign Agricultural Service connects grocers with new sourcing opportunities Scott Reynolds, Minister-Counselor for Agricultural Affairs, arrived in Canada last September fresh from a similar posting in Russia. A 20-year veteran of the USDA’s Foreign Agricultural Service (FAS), the Pennsylvania native is now based in Ottawa devoting his time to policy issues and helping connect American food exporters with Canadian retailers and distributors.

Grocery Business: How does the FAS connect Canadian grocery retailers with new sourcing opportunities?

Scott Reynolds: We realize there are many fruits, vegetables and other foods that are grown by both Canada and the U.S., however, it’s not possible to have every product available in every single month. We try to fill in the gaps when some Canadian-grown produce isn’t available, especially during the winter and early spring months.

Through the tasteUS! initiative, we work with more than 40 diverse associations, representing several thousand growers and producers, to offer healthy, fresh and safe products at good value. We also work with four State Regional Trade Groups: Food Export USA– Northeast; Food Export Association of the Midwest USA; Southern United States Trade Association; and Western United States Agricultural Trade Association.

GB: Describe some of the key trends you’re seeing.

SR: There’s the continuing trend to eating healthier, especially more fruits and vegetables. And we’re seeing more organic options in fruits, vegetables, grains, seeds, meat, baby foods, pasta, salsa, ice cream, peanut butter, tea and even organic beer. Another trend we’re seeing is a growing interest in glutenfree foods. Supermarkets seem to be making more shelf space available for those products.

GB: How can Canadian grocery retailers educate consumers about fruits, vegetables and specialty products sourced from the U.S.?

SR: Many of the associations listed at tasteUS.ca have Canadian representatives who can talk about promotional and tasting program ideas for a broad range of foods.

They help educate Canadian buyers about the taste and quality of U.S. products. For example, grocery retailers may not be aware that the highest quality dates aren’t necessarily from the Middle East. Medjool dates are grown in Arizona and California. You pay a little more for them, but they’re really quite juicy and tasty.

Find out more about the USDA Foreign Agricultural Service (FAS) and sourcing opportunities at tasteus.ca/contact-us.

in 2012

U.S. agricultural exports to Canada exceeded $20 billion and Canada shipped almost an equal amount to the U.S. Our two-way trade is about $41 billion a year.

Scott Reynolds, Minister-Counselor for Agricultural Affairs

grocerybusiness.ca

– Scott Reynolds

March | April 2013

47

Foreign Agricultural Service

Almond Growers Track Green Efforts

SPECIAL REPORT

The Almond Board of California has initiated a program to document the sustainable farming methods of its members. “We want to be ahead of the curve in letting the public know what California almond growers are doing to be progressive and sustainable,� says Kendall Barton, coordinator, industry relations for the Almond Board.

Growers can document their farming methods and learn about best practices when they complete an online self-assessment form, Barton says. The program is still in the data-gathering phases. So far, about 10 per cent of California almond growers have participated. The Almond Board expects to release a baseline report in December.

California growers shipped 48 million pounds of almonds to Canada last year.

Fresh Sources

Canadian shoppers are quite particular about their produce, according to recent surveys by Leger Marketing and Angus Reid.

Price is number one on the minds of Canadians when shopping for fruits and vegetables, followed by appearance, taste, nutrition and origin. The studies were commissioned by the Foreign Agricultural Service (FAS) office of the United States Embassy in Ottawa. And while Canadians believe in supporting local food producers, practical issues such as price, availability and the taste of the produce they buy tends to trump all other concerns.

In fact, Canadians have a very positive attitude towards foods coming from the United States. The majority of those surveyed (58 per cent) said they preferred food sourced from the U.S. over imports from Mexico, Chile, Costa Rica or Brazil.

Preference for food outside of Canada

34%

Top 10 words to describe US produce

3% Mexico

80%

Respondents used a wide range of words to describe American produce. The top 10 words: available, fresh, well-priced, reliable, tasty, safe, delicious, nutritious, healthy and ripe.

2% Chile

United States

1% Costa Rica | Brazil 0% Guatemala Columbia Peru Ecuador China

I have no preference

Quality of produce by states California

80% 68%

Florida 22%

Washington

20%

Idaho Oregon

9%

Georgia

8%

Vermont

6%

New York

6%

Maine

6%

New Mexico 5% March | April 2013

well-priced

reliabletastysafe

delicious nutritious

19%

Hawaii

48

available fresh

Respondents were very specific when asked to name the states offering the highest quality produce. The top five choices were California (80 per cent), Florida (68 per cent), Washington State (22 per cent), Idaho (20 per cent) and Hawaii (19 per cent).

healthyripe

Foreign Agricultural Service SPECIAL REPORT

Brand Booster

It takes planning and market savvy to pull off a successful promotion in the Great White North.

Discover how these organizations are raising awareness and boosting sales for their products across Canada

Sunkist Growers Inc.

Medjool Dates, California Cherries and more…

Sunkist Growers Inc. is tapping into Canada’s passion for hockey with a 15-week sweepstakes program – January 7 to April 21 – that promotes navel oranges, family activity and healthy eating. The 15 winning children, each accompanied by a parent, will get an all-expenses-paid week at the Okanagan Hockey School in British Columbia.

The promotion is running in grocery chains across the country, including a major presence in Safeway’s western Canada stores, says Julie DeWolf, director of retail marketing for Sunkist Growers, Inc. Sunkist’s annual hockey-related promotions usually garner more than 100,000 entries, DeWolf says. Four weeks into this year’s promotion, more than 12,000 entries had been received, with about 12 per cent of those entries generated from a mobile device.

Date-loving Canadians are getting creative these days and are tossing products such as Natural Delights Medjool Dates into salads, or sprinkling them on caramelized onion flat bread.

“The Medjool is a fresh fruit. They’re not sprayed, processed or dried,” explains Ken Berger, principal of R.E.P.S. Inc. and who, in Canada, represents the Bard Valley Medjool Date Growers Association as well as the U.S. Apple Export Council, TexaSweet Citrus Marketing Inc., The Catfish Institute, Buy California Marketing Agreement and the California Pear Advisory Board.

This year, a Natural Delights brand chili lime-flavoured date roll is hitting the market as a healthy snack alternative, Berger says. Three- and four-ounce Medjool date snack packages will encourage trial among new users, and Medjool dates will receive consumer media and public relations campaign support in Canada throughout 2013, Berger says.

Separately, the Buy California Marketing Agreement will participate in an early June sampling program of California cherries in Longo’s stores, says Berger. The promotion will receive support in the retailer’s Experience magazine, on the Longo’s website and in social media.

Florida Department of Citrus The FDOC conducts sampling in the Canadian market in order to increase awareness and trial for Florida grapefruit, as well as orange and grapefruit juices.

This year, the focus is on Ontario, Quebec and the Atlantic provinces with sampling programs running in Loblaws’ Quebec stores (orange and grapefruit juices), and Longo’s stores in the Greater Toronto Area (grapefruit and grapefruit juice).

A year ago, 130 Canadian stores participated in a FDOC program that saw more than 41,000 Florida grapefruit and grapefruit juice samples distributed in Metro’s Ontario stores, Longo’s Toronto-area stores, Metro Quebec, and through Grocery Gateway, which reaches nearly 8,000 households.

grocerybusiness.ca

Exceptionally sweet and juicy with low acidity Seedless Very high in Vitamin C and Folate Rich in Vitamin A and a source of Dietary Fibre Distinct, rich pink interior For great-tasting recipes, tips and nutritional information scan here using a smartphone app or text CARACARA1 to SUNKST (786578)*

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California Cling Peach Board A recent Oregon State University study found canned peaches to be equally as nutritious as the peaches found in the produce department, says Bill Westernoff, director of marketing for the California Cling Peach Board, which represents about 500 growers in northern California.

The Board is promoting its health and nutrition messaging via recipes, advertorials and mentions in such media outlets as the Huffington Post, Parents Canada magazine, and Canadian Family’s 20 Minute Supper Club. The Board has also reached out to bloggers, and was included in a segment by Canada AM’s in-house chef, Michael P. Clive, in an on-air cooking segment. >

March | April 2013

A P P R O V A L S

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Foreign Agricultural Service

Brand Booster

SPECIAL REPORT

continued

1-2-3 Gluten Free American Peanut Council It seems that Canadians are crazy about peanuts and peanut butter, despite a 30 per cent jump in prices just over a year ago due to a short peanut crop in the U.S. At the time, an American Peanut Council (APC) survey found that 73 per cent of Canadians would continue to buy peanut butter even if it doubled in price. Since then, prices have eased back to normal levels and the APC’s January 2013 Leger survey found that 94 per cent of Canadians have peanuts or peanut butter in their homes (unchanged from a year ago); and 91 per cent consider it to be a healthy food choice.

“Canadians are loyal to the product, they have it in their homes and they’re going to continue to buy it,” says Stephanie Grunenfelder, vice-president, international marketing for APC.

About a decade ago, Kimberlee Ullner realized there was a growing demand for gluten-free baked goods when members of her celiac support group asked to buy a mix for her homemade biscuits. That’s when Kimberlee and her mother, Carol Ullner, created the 1-2-3 Gluten Free line of baking mixes.

Last year, Ullner attended tradeshows and really started making a push in the Canadian market. She introduced four of the Orange, Ohio-based company’s 17 mixes to the Canadian market: yellow cake, muffin, dinner roll and a cookie mix. In 2013, Ullner will introduce five more mixes: brownie, pan bar, biscuit, pancake, and sugar-free pound cake. Sobeys is testing four of the products in a selected number of stores this year, Ullner says.

“When we decided to enter the market, we wanted to do it right. So we didn’t slap stickers on the product, we make our packaging totally compliant so there are no issues,” Ullner explains. The company became export ready with the help of the Foreign Agricultural Service and Food Export Association of the Midwest USA.

RED ANJOU

y nev Beaut tasted so

Growing Demand For Organic Fruits Canadian consumers appear to have a growing appetite for organic produce. Shipments of organic apples to Canada by the Washington Apple Commission are up by 20 per cent compared to a year ago, according to Chris Scott, the commission’s international trade specialist. Preferred varieties include Gala, Golden and Granny Smith, and most shipments go to Ontario.

Shipments of organic pears were also up for the 2011/12 season, says Cristie Mather, director of communications for Pear Bureau North West, which represents pear growers in Oregon and Washington State and markets under the USA Pears brand.

USA Pears shipped 2.65 million pounds of organic pears to Canada, or about 10 per cent of the total organic crop, compared to 2.11 million pounds the previous year, Mather says. “Canada is our number one export market for organic pears, and the second largest export market, after Mexico, for both organic and conventional pears,” she says.

Scan with your mobile device for recipes, nutrition facts, and more at usapears.org!

Because pears are a high impulse purchase, USA Pears is running an in-store display with Metro Ontario outlets promoting the Anjou, Red Anjou, Bartlett and Bosc varieties. The program includes recipe tear pads and educational material. USA Pears also participated in Longo’s “Why Not Try” program last December with samples of Concorde and Red Anjou pears.

DID YOU KNOW: In 2009, Canada and the United States entered into an Organic Equivalence Arrangement recognizing each country’s national organic systems as equivalent. Each country maintains its own organic standards, regulations and procedures. However, produce and food products certified as organic are considered to have met the importing requirements of the other country. Also, under this arrangement each country recognizes each other’s respective organic logos.

Sweet

er

Tomato Tips from the California Tomato Farmers

Merchandise your tomatoes on non-refrigerated dry tables and they should be stored away from both direct sunlight and cold temperatures.

Rotate your tomatoes, keeping the bright red product towards the front and break up the colour of your display by using lemons or avocadoes.

Sourcing Made Easy From Florida citrus to farm-raised catfish; watermelons to papayas…

Canadian retailers source a wide array of high-quality, safe and nutritious foods from the United States.

Last fall, the U.S. Food and Beverage Alliance debuted the tasteUS.ca website as a “branding initiative to recognize 40 U.S. associations and businesses that are actively selling their foods and beverages in Canada,” says Scott Reynolds, Minister-Counselor for Agricultural Affairs, USDA Foreign Agricultural Service (FAS).

TasteUS.ca is designed to connect retailers with more than 40 cooperators representing their members and businesses which represent thousands of U.S. growers. “You can read all about the associations on the website and click through to each one’s home page,” Reynolds explains.

TasteUS.ca also features information about seasonality, Canadian food labels, retail promotions and industry events. The website makes it easy for Canadian buyers to connect with U.S. suppliers through its partners and the Foreign Agricultural Service office in Canada.

For more information, visit tasteUS.ca

When cross merchandising tomatoes, review your SKU data.

If your tomato customers are also buying a lot of avocadoes, cilantro and limes, make shopping easy for them by placing all those items close together.

Display tomatoes stem-up to prevent bruising.

Promote the fact that you are selling field-grown tomatoes in your stores. CTF recently undertook research on the Canadian consumer via Leger Marketing and found out that nearly seven in 10 shoppers know the difference between field-grown and hothouse, and of that group the majority prefer field-grown.

60% of Canadians say they want a variety of tomatoes to choose from

The US showcases the cream of its crop in Canada If you are planning to attend SIAL Canada or the Canadian Produce Marketing Association Show, we invite you to meet these outstanding U.S. companies that will be showcasing innovative and unique products.

Canadian Produce Marketing Association Show Toronto, April 17-19, 2013 A listing of U.S. cooperators, firms and organizations affiliated with tasteUS! American Peanut Council peanutbureau.ca Bard Valley Medjool Date Growers Association natural-delights.ca

52

March | April 2013

Buy California Marketing Agreement californiagrown.org/canada Signatories: California Pear Advisory Board calpear.com California Asparagus Commission calasparagus.com California Avocado Commission californiaavocado.com California Cherry Marketing and Research Board calcherry.com California Cut Flower Commission ccfc.org California Wine Institute calwine.ca

California Strawberry Commission calstrawberry.com California Tomato Farmers ctf-canada.com

TexaSweet Citrus Marketing Inc. texasweet.com U.S. Pecans uspecans.org

California Table Grape Commission freshcaliforniagrapes.com

Washington Apple Commission bestapples.com

Florida Tomato Committee floridatomatoes.org

Washington State Fruit Commission wastatefruit.com

National Watermelon Promotion Board watermelon.org

Northwest Cherries nwcherries.com

Pear Bureau Northwest usapears.org

Organic Trade Association ota.com

Sunkist Growers, Inc. sunkistgrowers.com

Florida Department of Agriculture freshfromflorida.com North Carolina Department of Agriculture ncfreshlink.com

Foreign Agricultural Service SPECIAL REPORT

Longo’s Keeps it Fresh Longo’s is planning a tasteUS! promotion in its 21 stores this spring. On April 18 and 19, Longo’s will sample products from the Bard Valley Medjool Date Growers Association, American Peanut Council, and the Pear Bureau Northwest. In June, the Buy California Marketing Agreement will offer fresh seasonal cherries in-store, with the promotion receiving support in Longo’s Experience magazine. “With our promotions, we try to capture the season, ensure we’ve got a good fit for our customers and develop the right recipes as part of the in-store experience,” says Sandra Duff, marketing communications manager.

State Regional Trade Groups

Export Ready There are many good reasons why American packaged food companies may wish to export to Canada. Yet, as many first-timers soon discover, becoming export ready requires research, education, support and planning.

Small and medium-sized U.S. companies call upon their local State Regional Trade Groups (SRTG) to get a handle on Canadian consumer trends and preferences as well as rules surrounding packaging, labelling, regulatory procedures and other requirements.

The four SRTGs are: Food Export USA–Northeast; Food Export Association of the Midwest USA; Southern United States Trade Association (SUSTA); and Western United States Agricultural Trade Association (WUSATA).

Representatives of the four SRTGs help introduce U.S. food manufacturers to Canadian buyers. For example, last year the four groups conducted specialty food missions to Toronto and Vancouver where participants toured major supermarket chains as well as local specialty retailers. They also had the opportunity to meet prospective buyers. “We had a Puerto

Make Contact

Food Export-Midwest, USA, and Food Export USA-Northeast: foodexport.org Southern United States Trade Association: susta.org Western United States Agricultural Trade Association: wusata.org

Rico-based roasted coffee bean company visit Canada last fall, and while he was interested to see the conventional retail outlets, he also wanted to visit small specialty coffee stores,” says Alison George, vice-president of Argyle Communications in Toronto, consultant to SUSTA in Canada.

Trade shows such as SIAL Canada and the Canadian Produce Marketing Association are also a great opportunity for U.S. food manufacturers to learn more about the market and to meet Canadian brokers and distributors.

Food Export Association of the Midwest USA, Food Export USA–Northeast, and SUSTA will have a presence at important Canadian trade shows this year, including SIAL Canada and the Canadian Restaurant and Foodservices Association show. Among the many ways these groups help small and medium-sized companies become export ready is through education programs, food export helplines, newsletters and webinars.

New Jersey Department of Agriculture state.nj.us/agriculture

Caribbean Crescent Inc. caribcres.com

Imagilin Technology LLC imagilin.com

Salwa Foods salwafoods.com

Virginia Department of Agriculture vdacs.virginia.gov

Cassandra’s Gourmet Clasics Corp. islandtreasuresgourmet.com

Jelly Belly Candy Company jellybelly.com

Southern Culture Artisan Foods southernculturefoods.com

SIAL CANADA

Cellars at Jasper Hill cellarsatjasperhill.com

La Tourangelle, Inc. latourangelle.com

Toronto April 30 – May 2 A listing of USA Pavilion Exhibitors

Cordoba Foods LLC gauchoranchfoods.com

Margie’s Brands, Inc. margiesbrands.com

Southern United States Trade Association wvagriculture.org

Dell’Amore dellamore.com

Oskri oskri.com

1-2-3 Gluten Free 123glutenfree.com

Food Export – Northeast foodexport.org

PPi Technologies Group ppitechnologies.com

Ariston Specialties LLC aristonoliveoil.com

Ford’s Gourmet Foods bonesuckin.com

Big Picture Farm bigpicturefarm.com

Gringo Jack’s gringojacks.com

USDA/FAS U.S. Embassy Ottawa fas.usda.gov

Primex International Trading Corp. primex.us Safie Specialty Foods Company, Inc. safiespecialtyfoods.com

Spartanburg Meat Processing Co. eatbbqribs.com Sutter Buttes Olive Oil Co. sutterbuttesoliveoil.com Vermont Agency of Agriculture Food & Markets vermont.gov Vermont Harvest vtharvest.com March | April 2013

53

Canadians

are nuts

for peanuts!

Did you know... the average Canadian consumes nearly three kilograms of peanuts and peanut butter per year? Also, more than 80 per cent of the peanuts consumed in Canada are grown in the United States.

That’s why the Peanut Bureau of Canada was established. It is the information office of the American Peanut Council and is dedicated to educating Canadians about peanuts as part of a healthy diet and about the quality of U.S.-grown peanuts.

To learn more about the versatility, taste and health benefits of Quality USA peanuts – and to find a selection of delicious recipes visit:

www.peanutbureau.ca or e-mail info@peanutbureau.ca

Peanuts make sense (and cents!). Compared to other tree nuts, peanuts are the lowest cost nut available to retailers and consumers.

Foreign Agricultural Service SPECIAL REPORT

Sutter Buttes Olive Oil Co. When Alka Kumar and her husband Arek Kazmierczak decided to sell their flavour-infused olive oils and balsamic vinegars in Canada, it was a new market, but not an unfamiliar one.

Kumar is a Toronto native with strong ties here. “We wanted people to have an olive oil that’s fresh and healthy and that can be used quickly and easily,” Kumar says. “All of our olive oils are certified extra virgin, and we infuse them with fresh local ingredients such as blood oranges, Meyer lemons and Habanero chiles.” The company also offers mustards, jams and other gourmet products.

With assistance from WUSATA, Sutter Buttes started shipping jams to stores in British Columbia last year. Costco’s Western Canada stores sold a large gift box featuring two Sutter Buttes olive oils and two balsamic vinegars.

Certified Extra Virgin

The California Olive Oil Council (COOC) certification program guarantees that products bearing its seal are extra virgin grade.

COOC members using the extra virgin label must annually undergo a chemical analysis, a blind tasting, and sign legal documents attesting to production practices and truth in labelling, says Patricia Darragh, executive director. The COOC represents more than 90 per cent of all olive oil production in California.

Canada and California make a perfect pear. bartlett

bosc

sunsprite

comice

forelle

butter french

seckel

red pear

taylor gold

(Actually, we make quite a few of them.)

You’re probably familiar with the sweet, flavourful Bartlett pear, but there’s a whole lot more where that came from.

The tiny, colorful Forelle is an ideal appetizer, and the buttery smooth Comice makes for a sweet snack. In fact — from the aromatic Bosc to the adorably delicious Seckel — you’ll find a perfect pear in season any time from July through November. It’s no wonder California pears are a tasty supplement to Canada’s own homegrown selection.

Partner with us for a juicy addition to your produce section. contact merchandising representative Ken Berger at 416-200-7207 ken.berger@rogers.com grocerybusiness.ca

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55

Register today at pacnext.com

PRESENTS

PA C K A G I N G O P T I M I Z AT I O N S U M M I T

PRESENTED BY

North American Retail and CPG thought-leaders will identify the critical issues and present best practices solutions for the optimization of packaging across the supply chain with over 800 Summit executives and managers in this collaborative, interactive and fun event.

Price includes: Ticket to the Packaging Optimization Summit; PACKEX Toronto; PAC NEXT Sustainability Village; Lunch and Networking Reception

when

O N L I N E

May 15, 2013 Summit: 8am to 5pm Reception: 5pm to 7pm At PACKEX Toronto Toronto Congress Centre Cohen Room 650 Dixon Rd., Toronto

cost

R E G I S T E R

where

Hosted by Retail & CPG leaders collaborating on advancing sustainability and packaging.

PAC NEXT members - $50 PAC members - $75 General admission - $100

PAC NEXT members, please contact labraham@pac.ca for your discount code.

speakers

All Retail and CPG hosts will be presenting at the Summit. Confirmed speakers to date are: Joanne McMillin Assistant VP, Business Sustainability Canadian Tire

Bruce Karas VP, Environment & Sustainability Coca-Cola Refreshments

Luc Lortie Sustainability & Environmental Director Costco

Catherine O’Brien VP Communications Nestle

Len Sauers VP, Global Sustainability P&G

David Smith VP Sustainability Sobeys

John D. Coyne Vice President, Legal & External Affairs And General Counsel Unilever Canada Inc. Contact for more information: Lindsey Ogle, PAC Education Manager and Events Coordinator, 416.646.4641, logle@pac.ca

Media sponsor

Contact for more information: Lindsey Ogle, PAC Education Manager and Events Coordinator, 416.646.4641, logle@pac.ca Visit www.pacnext.com for more information

Profile

THE INSIDE SCOOP How Chapman’s Ice Cream turned adversity into opportunity and stayed true to its “ice cream is for everyone” philosophy

By Angela Kryhul The Chapman family (l-r): Ashley, Penny and David

It seems fitting that David and Penny Chapman would bestow the name Phoenix on a new ice cream manufacturing complex erected after a September 2009 fire that completely destroyed their original factory. Some in the food business fully expected the tragedy would bury Canada’s largest independent ice cream manufacturer.

But it didn’t. Like the mythological bird, the family-owned business rose from the ashes and is bigger than ever today.

“My parents believe that ice cream should be for everyone. That’s always been our philosophy.”

The couple started their ice cream business 40 years ago when they purchased an old ice cream factory in the village of Markdale, Ont. Company CEO David Chapman, and president Penny Chapman, built the business while raising their two children, Frances and Ashley.

“We lived above the old ice cream factory for the first year of my life,” says vice-president Ashley Chapman, who joined the company full-time in 2008 after an early career as a chef, and who now runs the business day-to-day.

The fire proved that the Chapman family is made of strong stuff. They used part of their insurance money to keep their employees on the payroll, even as multinational competitors grocerybusiness.ca

hungrily eyed the company’s hard-earned retail real estate. It was dog-eat-dog for a while, Ashley Chapman remembers, with industry rumours swirling that the business would never recover. “Our competition tried to push us out of our positioning,” Chapman says.

Meanwhile, small ice cream makers, including the now defunct Stoney Creek Dairy, rallied to help the company get back on its feet by allowing Chapman’s staff to make products in their factories. “Several small processors like Country Smith, Reid’s Dairy and Shaw’s offered to help,” says Chapman. Grocery retailers weren’t left empty-handed since the company had about $11 million worth of inventory stored off-site on the day of the fire. “We figured we had enough ice cream supply to last for three months,” Chapman says. “We never actually stopped shipping.”

The clock was ticking, however, since the company’s business interruption insurance

covered only a one-year period. Within seven weeks of the fire, Chapman’s got a mini-factory up and running.

The family also realized that opportunity is often found in adversity. They decided to build a complex that is three times the size of the original 85,000-sq.ft. factory, including separate nut and nut-free facilities. The company now has 17 lines running compared to 11 lines before the fire, Chapman says, and they are still Canada’s largest independent ice cream manufacturer.

And being independent has its marketing advantages. The company is pursuing the ice cream sundae category that was recently introduced by their competition. “We decided this is a hell of an idea, and the 1-litre size is great for small families,” says Chapman.

“My parents believe that ice cream should be for everyone,” Chapman explains. “That’s always been our philosophy.”

JUST THE FACTS »» Year founded: 1973 »» Number of employees: 500 »» Number of production lines: 17 »» Total annual production: 100-150 million litres »» Number of products lines: More than 15

»» Best-selling product: Chapman’s Frozen Yogurt, launched in 1988 »» Awards: David and Penny Chapman were awarded Queen Elizabeth II Diamond Jubilee Medals, recognizing their ecological leadership »» Key industry trends: Affordability; smaller pack sizes; peanut-free; gluten-free; “better for you” options

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LIST IT

New products you need to know about

Summer Fresh Summer Fresh has introduced a lineup of five new Fresh Sauces. Made with natural, top quality ingredients and with no added preservatives, Fresh Sauces are versatile and can be used as marinades, in stir-frys or as finishing sauces. summerfreshsauces.com

New Resealable Fisherman’s Friend Packages Fisherman’s Friend is introducing new resealable packaging on its line of throat lozenges. In addition to keeping the lozenges securely inside the package, they use 10 per cent less packaging material. The introduction is being supported with national TV advertising. fishermansfriend.com

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March | April 2013

New Look, Same Wings Red Bull’s latest Canadian launch, Edition, features three new flavours – cranberry, lime and blueberry – and a sleek look.

The newly designed red, silver and blue cans offer the same carbonated formula and energy boost as the original. redbull.ca

Bee Even Cuter McCormick Canada has given its iconic Billy Bee Honey a makeover with a new bee character-style bottle. Consumers can peel back the label to find an appetizing recipe and the URL for the 55-year-old honey brand’s revamped and interactive website. billybee.ca

A Pinch of Sweetness Just a Pinch’s Savour the Flavour Infused Sugars feature two simple ingredients – fair trade organic cane sugar and all-natural flavours such as sweet raspberries, Korjante cinnamon and Tahitian vanilla beans. From fresh and fruity to rich and savoury, these sugars can be used on desserts or when grilling meat or seafood. justapinch.ca

grocerybusiness.ca

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Making It

MORE CHEESE, PLEASE

By Noelle Stapinsky

When Canadians say “cheese, please,” they could be asking for any one of the copious different varieties of this popular product.

Did you know that Canada produces more than 1,050 types of cheese? Or that Quebec is home to over 100 cheese makers – more than any other province – producing three-quarters of the country’s cheese products?

From coast-to-coast, there are hundreds of artisan cheese makers creating one-of-a-kind products, and much like a vintner, a great cheese maker can predict the flavour, texture and aroma of their product by working with the natural terroir of the region. And behind each unique product there’s usually an interesting story to tell.

For grocery retailers looking to differentiate and get onboard with the buy local trend, this spells big opportunity. Gilles Deschênes of the Dairy Farmers of Canada suggests that grocery retailers look for what’s being produced in their region, as well as what’s available across the country.

P.E.I., for example, is known for its potatoes, but it has some very passionate cheese makers. Cows Creamery is one of them. Its traditionally made Avonlea Clothbound Cheddar has a very distinct flavour and quality due to the salt air from the ocean and iron-rich red soil.

On Vancouver Island, Natural Pastures produces a variety of soft, hard, semi-soft and –hard, and fresh cheeses. “Its dairy herd feeds on grass and herbs that are generously watered by Pacific Ocean soaked rain, giving the cheese its own terroir or distinct flavour,” says Deschênes.

CULTURE SHOCKERS Canada can be justly proud of the outstanding cheeses that are produced here. Grocery Innovations Canada (GIC) 2012 showcased a number of new innovative cheese makers and dairy product manufacturers. From Ontario – the country’s second largest cheese producing province – there are over 40 cheese makers producing a variety of unique products. Some of these innovators exhibited at GIC and we were so impressed by their enthusiasm we wanted to introduce them here.

Juan and Monica Martinez

Grilled Goodness Founded in 2008 by Juan Carlos Martinez and Ernesto Restrepo, a fourth generation cheese maker, Grandpa’s Dairy produces a variety of traditional Latin American Queso [pronounced: keso] cheeses. These semi-soft cheeses can be eaten on their own or grilled on a barbeque. Due to a special pressing process, these cheeses can withstand high heats and turn into a golden brown, warm cheese when grilled. grandpascheese.ca

All pure Canadian cheeses have the 100% Canadian Milk blue cow logo on the package, a symbol Canadians are becoming familiar with. But to sell such unique products, retailers need well-trained staff who can: »» Engage customers »» Tell the cheese makers’ unique stories »» Offer samples and create buzz

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Making It

Gouda For You Adam van Bergeijk [pictured], a first generation cheese maker and sixth generation dairy farmer, opened MountainOak Cheese with his wife Hannie in July 2012. The two, who immigrated to Canada in 1996, are prize-winning cheese makers from Holland. At their farm in New Hamburg, Ont., the van Bergeijks are producing a variety of traditional Gouda-style cheeses – some with cumin, black truffle and pumpkin flavours – using milk from their very own cows. mountainoakcheese.ca

Delivering Tradition Specializing in South Asian dairy products, Hans Dairy got its start over a decade ago selling milk and offering traditional doorstep delivery to homes in Etobicoke, Ont. Today the dairy company produces ethnic products such as Dahi, a yogurt-like Indian-style curd; Paneer, a soft unripend cheese that’s found in many South Asian dishes; and Lassi yogurt style smoothies. Such products are meeting the demands of Canada’s growing South Asian population, as well as consumers looking to create their favourite ethnic dishes at home. hansdairy.com

Aged to perfection

Sarab Hans of Hans Dairy

Yaroslav and Anya Kats with their mother, Olga

Sweet Treats This isn’t any ordinary frozen treat. Made with cottage cheese and real fruit, moomoo bars are nutritious, nut-free, gluten-free and kosher. This kind of dairy alternative is a long-time favourite in eastern European countries. Brother and sister team, Anya and Yaroslav Kats grew up in Estonia. But when their family moved to Canada and couldn’t find their favourite dairy treats, their father started Dairylicious (in 1998) to introduce the products to the Canadian market. When Anya took the helm of the company in 2010, the brand moomoo bar was born. moomoobars.com

Warm Delights Woodbridge, Ont.-based Nuvo Foods Innovation Inc. is a family-run company known for unique recipes and appetizers such as Risotto Croquettes and stuffed-potato starters. At GIC it debuted its pre-baked heat-and-eat Brie-Osh. Using a double cream Brie from Quality Cheese, this baked Brie appetizer encased in sweet dough can be ready to serve in just three minutes. And it’s offered plain, with caramel and pecans or apricot and cranberries. nuvofoods.com

Balderson, one of Canada’s most wellknown cheddar cheese companies, was started in 1881 by a group of Ontario dairy farmers that decided to pool their excess milk to produce cheese. This co-operative was located just east of Ottawa in Lanark County at a crossroads known as Balderson Corners.

Throughout the years, Balderson gained a reputation for its outstanding aged cheddars and has been shipping products to cheese savvy customers in the U.K. since the 1800s. Balderson was actually the last cheese factory to produce the Mammoth cheese, a popular attraction at the Chicago World’s Fair in 1893.

Today, as a part of Parmalat Canada, Balderson’s award-winning cheeses are the largest domestic cheddar brand in the deli case.

Peter Frangella, owner of Nuvo Foods

grocerybusiness.ca

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A taste of CALIFORNIA...

Grilled Indian Spiced Pork Emphasizing vegetables and fruit is part of healthy eating.

California Cling Peaches financially supports the Health CheckTM Program. This is not an endorsement.

See www.healthcheck.org 130 g (1/2 cup) Cling Peaches in light syrup: 80 Calories, 0g Fat, 20g Carbohydrate, < 1g Protein.

Bring the taste of California to your table with quality canned California Cling Peaches!

•

Convenient and economical, especially when fresh fruit is not in season.

•

We start with the freshest California Cling Peaches - hand sorted and quality inspected.

•

They are harvested and canned at their peak, sealing in their valuable nutrients and fresh taste.

•

California canned fruits are packed in either juice or light syrup with absolutely no additives or preservatives used in the canning process.

•

The canning process is one of the safest forms of packing – the high heat and vacuum seal prevent micro-organisms that cause food-borne illness.

For more recipe ideas visit the California Cling Peach Board at:

www.calclingpeach.ca

A participant of Heart & Stroke Foundation of Canada’s Health CheckTM Program

March | April 2013

trends impacting the produce industry A Fresh

App For Bar codes Juicer Trend

Produce by the Numbers CPMA Show Agenda

Presidentâ&#x20AC;&#x2122;s Message

Turn customers into fans

RON LEMAIRE,

president of the Canadian Produce Marketing Association, shares his thoughts on current trends

Grocery Business: Ron, what do you feel are the largest trends impacting the Canadian produce industry?

Ron Lemaire: Produce trends in Canada will be largely driven by the changing demographics of the Canadian population. Across Canada, Asian consumers represent the largest growing segment of the population and their preference for cooking at home and incorporating fresh produce will affect produce sales.

The aging boomer population with its significant disposable income will pay particular attention to nutrition as they age. They are seeking fresh varieties but also smaller portion options as their household size is smaller.

Both groups mirror the majority of Canadians who indicate that the quality of fresh produce influences their decision of where to shop.

GB: How have eating patterns changed?

RL: Snacking and mini-meals are becoming the norm for the time-pressed consumer who is choosing smaller, more frequent portions. Fruit and vegetables support this eating pattern. Tasty, affordable, portable fresh fruit is a natural snack choice and is leading the snacking trend in North America.

GB: Are Canadians consuming enough vegetables?

RL: Vegetables are moving to the centre of the plate to become the stars of the meal.

Both consumers and chefs are discovering new vegetables and interesting ways to incorporate them into meals. This is encouraging Canadians to try new varieties and combinations of produce. It also drives creative thinking on how to incorporate fruit and vegetables into oneâ&#x20AC;&#x2122;s diet.

Although price is still a core driver for fresh produce, it is not the only consideration for consumers. With more varieties, the entire fresh category is emerging as a retail differentiator.

And todayâ&#x20AC;&#x2122;s shopper has access to real time information on product origins, recipes and serving suggestions which means consumers consider many factors, beyond price, before making a purchasing decision.

The educated consumer will look to retailers who offer quality, selection and product knowledge. This customer interaction will be key to expanding sales and keeping customers coming back.

jerseyfresh.nj.gov

visit us at booth #1234

Program-at-a-glance

CPMA SHOW AGENDA APRIL 17-19, 2013 TORONTO, ONTARIO Tuesday, April 16

Thursday, April 18

7:30 am – 5 pm Registration

KEYNOTE SPEAKER

8 pm – 10 pm Directors & New Members’ Reception (by invitation only)

Extreme Adventurer, Motivational Speaker

JAMIE CLARKE

Wednesday, April 17 7:30 am – 6 pm Registration 1 pm – 2 pm CPMA Members’ Annual General Meeting 1 pm – 4 pm Retail Tour 8 pm – 11 pm Chair’s Welcome Reception

Thursday, April 18 7:30 am – 6 pm Registration 8 am – 9:30 am Delegates’ and Companions’ Breakfast KEYNOTE SPEAKER

MARIO PILOZZI, Former CEO, Walmart Canada 10 am – 11:15 am Business Sessions 11 am – 2:30 pm Companions’ Program

1:30 pm – 5:30 pm Trade Show 8:30 pm – 12 am Variety Night

Friday, April 19 7:30 am – 4:30 pm Registration 8 am – 9:30 am Awards Breakfast

For more information visit

cpma.ca

The Mary FitzGerald Award The Packer’s Produce Person of the Year Award CPMA Lifetime Achievement Award 10 am – 11:15 am Business Sessions 11:30 am – 4:30 pm Trade Show 11:30 am – 2 pm Lunch on the Trade Show floor 6:30 pm – 7:30 pm Annual Banquet Reception 7:30 pm – 11 pm Annual Banquet

11:30 am – 1 pm Delegates’ Luncheon

grocerybusiness.ca

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GSW 2013

GROCERY SHOWCASE WEST: WHERE THE WEST MEETS GROCERY’S BEST

APRIL 14 AND 15, 2013, AT THE VANCOUVER CONVENTION CENTRE

CFIG.CA

APRIL 14 & 15, 2013 VANCOUVER CONVENTION CENTRE

GS W

GROCERY SHOWCASE WEST

Produce

THE MAIN

Squeeze Health conscious consumers are shaking down the produce section for their next juice fix

By Noelle Stapinsky

In a quest to detoxify, cleanse or just lead healthier lifestyles, more and more consumers are jumping on the “juicing” trend. And when it comes to the exotic concoctions of fruit and vegetable being blended together, every item in the produce department is fair game.

As Canadian consumers become increasingly fresh obsessed, they’re shunning sugars and seeking delicious new ways to get their daily dose of fruits and vegetables. And this has opened the door to what’s become known as “juicing” – a verb that now not only describes the act of making juice, but also consuming it as part of a regular diet.

Nutrient rich brews with items such as kale, spinach, beets, carrots and even collard greens are being blended into a juice or smoothie. And of course “superfruits” such as pomegranate, acai and blueberries are also on the top of today’s juice aficionado’s list.

But it’s not just hip and trendy consumers trying to emulate celebrities – everyone from

Nicole Richie to Owen Wilson have been talking about their juicy choices – it’s everyone. Parents are looking for ways to get their kids consuming more fruits and vegetables, while boomers are also driving the trend as they seek out healthier options to integrate into their daily diet.

To feed such demand, juice shops are popping up all across the country, and coffee giant Starbucks has even jumped on the juice bandwagon, rolling out Evolution Fresh juice bars in the U.S. – a clear sign that this trend is growing, and fast. Even in-home juice extractor sales increased by 71 per cent in 2012, according to the NPD Group.

For grocery retailers, this spells big opportunity in the produce department. As more healthoriented consumers seek healthier drink alternatives, stocking fresh juice blends and smoothies among the fruits and vegetables will entice consumers with grab-and-go and meal replacement options.

JUICY SALES Agri-Food Canada reported that the functional and fortified juice market in Canada was valued at $1 billion in 2010 with sales expected to increase by 23.7 per cent by 2015.

And a Euromonitor International report stated that consumer interest in nutritional beverages is driving the demand and product innovation, particularly with fortified beverages. It’s forecasted that the sales of fruit and vegetable juices is expected to be

grocerybusiness.ca

“Superfruits” such as pomegranate, acai and blueberries are also on the top of today’s juice aficionado’s list.

valued at $4 billion by 2016.

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Produce

PRODUCE

BY THE NUMBERS

Where do Asian Consumers Shop in Their Countries of Origin?

Fruits and Vegetables (Data Represented in Percentage) 50

40

SUPERMARKET

30

HYPERMARKET FRUIT AND VEGETABLE SHOP

20

MINI MART/SELF SERVICE WET/OPEN MARKET

10

0 Source: Nielsen Global Survey of Fresh Foods, Q3 2012

Canadian Fruit and Vegetable Sales 2010 and 2011 (Sales in Millions) Source: Statistics Canada

0

0

March | April 2013

At la nt ic

Br iti sh

At la nt ic

68

2011 Fruits Total Sales: $753M

Pr ov in ce s

150

Ca na da

150

Co lu m bi a

250

Pr ai rie s

250

On ta rio

350

Qu eb ec

350

Pr ov in ce s

450

Ca na da

450

2010 Fruits Total Sales: $659M

Vegetables

550

2010 Vegetables Total Sales: $773M

Co lu m bi a

Fruits

550

Pr ai rie s

650

Br iti sh

650

On ta rio

750

Qu eb ec

750

2011 Vegetables Total Sales: $780M

Produce The Grocery Channel is the leader in the sale of fresh foods

War eho us eC lu

g ainin m e R

9%

b

12%

15%

tre ercen p u s ss/ a M

Grocery

2016 Forecast: Retail Fresh Dollar Market Share Fresh is becoming more complex with greater variety in products and package sizes and value added products such as diced vegetables.

64%

Source: Nielsen, 52 weeks ending Q3, 2012

Fresh Shoppers are Increasingly Valuable to Retailers

29%

UP TO

2.1-TIMES

LARGER BASKETS WITH FRESH FOOD

FRESH FOODS CONTRIBUTION TO TOTAL STORE SALES Source: Nielsen Perishables Group FreshFacts, 2012, U.S. grocerybusiness.ca

March | April 2013

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79

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ANNUAL

FOOD & ALLIED

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GOLF TOURNAMENT

DATE

DINNER

Friday, June 7, 2013

Copper Creek Golf Club Dinner will be served at 2:30 p.m.

All clubs are licensed

SHOTGUN START 7:30 a.m. for all courses

COURSES Eagles Nest Golf Club Kings Riding Golf Club Copper Creek Golf Club The Country Club

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PRIZES (Must be present to WIN) • Registration Gift $50 value • Prize table with over $2000 in great prizes • Door prizes including $1000 in cash • Closet to the Pin

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Produce Technology

A FRESH APP FOR BARCODES

BY SALLY PRASKEY

Until now, it was difficult for growers to use mobile technology to connect with consumers.

QR codes are too large to apply to an individual fruit or vegetable, and few consumers will take the time to visit websites while shopping.

Enter greenscans, which uses the standard barcode to communicate with consumers while they are making purchasing decisions. Whereas a QR code takes consumers to just one URL, greenscans allows the producer or marketer to share videos, photos, nutritional information, recipes, social media sites and more via a series of tiles. The consumer simply downloads the free app (www.gscan.it) onto his or her mobile device, scans the barcode on the produce, and taps on the tiles he or she wants to view.

“The app was designed with the most frequently asked questions about produce from shoppers,” says Juanita Gaglio, co-founder of greenscans Inc. and a long-time marketer of produce. “What is the product? How is it chosen? How is it prepared or used?They also want nutritional information.” Gaglio says consumers are more likely to buy a product if they know more about it.

The greenscans app can also read QR codes, allowing the customer to use one app to read everything including barcodes on clamshells or bagged products.

For growers/marketers, the technology is as simple as populating each tile with the URL they wish to share with consumers. “Think of each of those tiles as a URL,” explains Gaglio.

grocerybusiness.ca

“When the company opens up the back end to fill in the information for the products, it’s like dropping in URLs. They just copy and paste the URL to the box, so it’s really user-friendly.”

Companies can change the information on the tiles as often as they wish. “The companies have complete control over the information, and they turn it on or off,” says Gaglio.

Eventually, greenscans plans to use the scans to provide product analytics to its customers.

Since the technology was introduced last year, greenscans has brought on board several shippers and growers, including BC Tree Fruits Ltd. in Kelowna, B.C., which will be using it for its Ambrosia apples. The company will share photos, recipes, tasting notes, and more, says Chris Pollock, marketing manager.

There has also been interest among grocers in promoting the app. U.S. retailer, Stater Bros., is planning a consumer launch in early May. Greenscans is working closely with the retailer’s suppliers to obtain product GTIN and PLU information.

“Retailers can actually put something on the tiles too,” notes Mac Riggan, director of marketing, Chelan Fresh Marketing, Chelan, Wash. “They can drive the awareness that consumers can scan these data bars. So they could put it in their ads, on their website and on their in-store signage.” Chelan Fresh Marketing, which was greenscans’ first customer, uses the technology to provide information for its fruits, including nutrition,

A greenscan tile

Connecting consumers and growers is now as easy as scanning a standard barcode

When consumers scan the produce barcode, the greenscan app will display tiles showing nutritional information, videos, photos, recipes and more.

health and wellness, how to use them, how to wash them, and what they might taste like, as well as a video to connect the consumer with the grower that might be picking that particular variety of fruit, says Riggan.

In order to gain a critical mass of users, greenscans is waiving the customer registration fee for the first six months. Gaglio is confident the technology will, in produce parlance, bear fruit. “It really is changing the way growers/ shippers will connect to the consumer.”

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it figures >

30%

Fresh is driving growth and demand When you combine produce, deli, meat, bakery, refrigerated and dairy, the fresh category accounts for 30% of grocery store sales.

Takeaway Fresh is a fantastic opportunity for your business and a good way to get beyond price. Because 53 per cent of consumers cite “quality of fresh” as a motivating factor when deciding where to shop, there’s a case to be made for focusing on fresh in advertising, marketing and in-store promotions.

18%

of Canadians report not having any spare cash Amongst those that do, 44% say they put it towards paying off debt Takeaway Consumers are focused on value – shopping at discount retailers, buying on promotion, looking for coupons and price matching resulting in lower levels of overall sales growth.

Discount retailers have captured 42 per cent of CPG sales and continue to grow. Expect consumers to be very discerning on how they spend throughout 2013.

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March | April 2013

37% of Canadians own

smartphones, with 39% willing to shop at a virtual store Takeaway Smartphones are a game changer. Retailers and manufacturers must become more technologically advanced in order to stay ahead of the tech savvy consumer and their competition. Manufacturers can offer consumers coupons and recipes that highlight products while working with retailers to showcase their brands in retailer apps. Shopping apps should promote non-food items since consumers are most open to purchasing those categories virtually.

24%

of Canadians say theyâ&#x20AC;&#x2122;re willing to use their smartphones to make payments Takeaway Convenience is king for the consumer.

Payment via smartphones is an emerging game changer and offering this option to your customers could influence where they choose to shop.

Consumers made 11% fewer trips in 2012 than in 2009 and 21% fewer trips since 2006

Takeaway Differentiation is a key strategy since shoppers are making fewer shopping trips. Finding new ways to attract consumers whether itâ&#x20AC;&#x2122;s through fresh, loyalty apps or a unique shopping experience, is the ticket. grocerybusiness.ca

35%

of Canadians are willing to use a retailer app as a replacement for the loyalty cards they carry in their wallets Takeaway Make it convenient to be loyal.

Most retailers offer some form of loyalty or rewards program but cards can be cumbersome. Consider offering your consumer a relationship building app to replace the loyalty card.

Carman Allison is responsible for creating and delivering thought leadership to manufacturer and retailer clients and at CPG industry events. A frequently sought-after speaker, Allison has more than 20 years of experience in the consumer research industry with Nielsen, where he has held various account management and analysis roles.

A L L S TAT S C O U RT E S Y: N I E L S E N

Carman Allison

March | April 2013

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Perry’s Point of View

WHY I LOVE BUFFALO Buffalo offers cheap flights all over the U.S., and NFL football. It has outlet stores, affordable pro hockey, excellent wings and lots of well-known American retailers. It also has lower prices than Canada on turkeys, tires and Tums.

Those low prices are causing angst among consumer groups and politicians, culminating in the mostly benign two-year, 75-page report from the Standing Senate Committee on National Finance entitled The Canada-USA Price Gap. I say mostly benign because, buried on page 54 of the report, are two intelligent comments – one from Mark Carney suggesting that the high level of retail concentration is the issue, and one from Ken Wong pointing out that prices are regulated by competition.

At that point in the report, consumer advocacy groups suggested the Competition Bureau should weigh in, but the Bureau does not consider concentration itself to be anti-competitive behaviour. So, as could be predicted, there is no actual solution to the problem.

No doubt, numerous manufacturers price products higher in Canada than the U.S. for a variety of reasons, some obvious (shipping costs, labelling, supply management), and some not so obvious. One not-so-obvious reason is that the high level of retail concentration forces suppliers to pony up ever larger rebates in order to stay on the shelf. Those

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March | April 2013

rebates must be paid for somehow, and it’s likely they turn up in national invoice costs.

The concentration of retail in Canada is remarkable. The largest three food retailers share about 60 per cent of the food market; Walmart controls about two-thirds of the department store market; Shoppers Drug Mart has about 25 per cent of the drug/HBA market and, of course, Costco has 100 per cent of the club channel.

One way to look at the situation is to examine the results of the three biggest grocers over the past five years. By our math, they have grown tonnage by 10 per cent (that’s aggregate for five years, not annually), but they have grown operating profits by over 30 per cent. When we consider lower Selling, General and Administrative costs, the Canadian dollar, and mix shifts toward higher-margin fresh products, it seems that the actual cost of grocery products may have been reduced by between 15 per cent and 20 per cent, turning low tonnage growth into higher profits. Even more remarkably, food inflation over that time period has been about +3.5 per cent. In other words, it seems that despite lower cost-of-goods, prices actually rose. If nothing else, this indicates the relative

lack of competition in these highly concentrated markets.

This will change. The entry of Target, the continual growth of Walmart, Costco and drugstores in food, and the stunning rise of

The concentration of retail in Canada is remarkable. The largest three food retailers share about 60 per cent of the food market. ethnic grocers in Canada will all put pressure on the big food players, and they will be forced to respond with price.

In the meantime, there’s always Buffalo.

Perry Caicco is the managing director for CIBC World Markets. He has worked for 15 years in the supermarket, general merchandise and packaged goods industries with Loblaw Companies, Coca-Cola and Consumers Distributing.

“ FCC is key to our company

growing

” .

Meb Gilani, President, Gilani Group, Calgary, Alta.

When you talk financing with FCC, we’ll listen Ready to expand? We learn how you want to grow, then create a financing package that helps you do it. Work with the leading lender to agriculture, agribusiness and agri-food in Canada. Let’s talk business.

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