September/October 2014

Sept/Oct 2014 Vol 4 | No 5 $9.95

Distribution Canada Report

+produce PM # 42211029

MANAGER

FORTINOS’

Vince Scorniaenchi THE VISIONARY grocerybusiness.ca

Grocery Business September | October, 2014 Volume 4, Number 5

contents

Vince’s Market, Aurora, Ontario: Deli Department

DEPARTMENTS 6

Front End

People & News

11 Open Mike

Harnessing the brainpower of the boomers

57

Q&A with Hannah Perrin-Haynes

74 Launch It, List It

59

Wonderful Welsh Lamb

78 It Figures

60

Cheers to UK Products

14

New and now products Making the healthy choice

60 4

September | October 2014

Taste of the UK

61

anadian Importers, Distributors C & Suppliers of British Food & Drink Products

ON THE COVER Vince Scorniaenchi: 16 Fortinos’ The Visionary

40

13 21

FEATURES

PHOTO GALLERY

13 Congratulations, Cori and Ken

47 Summer Fancy Food Show, New York City

14 Walmart’s Grab&Go

Click-and-collect service debuts in 10 Ontario stores

15 Home Brew

McDonald’s and Kraft bring McCafé home

36

Advantage Report

39

Distribution Canada Inc.

77

World Crops, Locally Grown

Strength in numbers

Cover Photo: Matthew Liteplo grocerybusiness.ca

INDEPENDENTS’ DAY

23 R isk Management for Produce Dealers

25 Produce Marketing Association Fresh Summit 2014

65 Swipe Fees Cost Everyone

29 Mike and Mike’s Organics

68

Fresh Thyme Farmers Market

32 The Convenience Consumer

70

National Grocers Association Financial Survey

72

Responding to a Union Drive

73

Ace Hardware Grows with Grocers

8 September | October 2014

5

Front End

CFIG Life Member Awards The Canadian Federation of Independent Grocers (CFIG) has named Nestlé Canada’s Steve R. Fox, as well as Quality Foods founders Ken Schley, Noel Hayward and John Briuolo, 2014 Life Member Award recipients.

Fox, who is senior vice-president, customer development, at Nestlé Canada Inc., receives CFIG’s prestigious Life Member Award in the Industry Builder category. Fox, a past chair of the CFIG Associate Members’ Council, spent 12 years with Kraft. He was also vice-president of sales for Adam’s Canada before joining Nestlé in 2003.

He is a strong supporter of the Network of Executive Women, and is an active participant in Kids Help Phone initiatives.

“What makes Steve unique is not that he is a great supporter of the grocery sector, but that he gives of his personal time to help make Canada a better place,” says Thomas Barlow, president

and CEO of CFIG. “His selfless commitment to causes like Kids Help Phone is a testament to why Steve is this year’s Industry Builder Life Member.”

Ken Schley, Noel Hayward and John Briuolo of Quality Foods, Vancouver Island, B.C., receive the 2014 Life Member Award in the Independent Grocer category.

Quality Foods’ story began in 1982 when Schley, Briuolo and Hayward took a failed SuperValu at Vancouver Island’s Qualicum Beach, and renamed it Qualicum Foods. Today, their stores are known as Quality Foods. “We are one of a very few grocers who continue to be Island-owned and grown,” says Schley.

From the beginning, the three partners focused on customer service, store design, exceptional merchandising and leading-edge technology.

“The Quality Foods story is one of inspiration, perseverance and collabora-

tion between partners,” says Barlow.

“By staying focused on what their customers want and giving back to the communities in which they operate, Quality Foods personifies what makes independent grocers a vital part of the Canadian social fabric.”

Fox and the three Quality Foods founders were officially recognized at CFIG’s Luncheon of Honour on September 29, during Grocery Innovations Canada 2014, in Toronto.

Noel Hayward, Ken Schley and John Briuolo of Quality Foods

September | October 2014 Volume 4, Number 5

Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca

Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey

Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca

grocerybusiness.ca Nancy Croitoru, Food and Consumer Products of Canada Tim Berman, Kraft Foods Canada Michael Marinangeli, MIDEB Consulting Inc. Cheryl Smith, Parmalat Canada David Wilkes, Retail Council of Canada

Contributing Writers Peter Diekmeyer (Montreal), Marjo Johne

Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca

6

Contributors Tom Barlow, Rodney Daw, Tom Gorsky, Ron Lemaire, Michael Marinangeli, Virginia Zimm

September | October 2014

Steve R. Fox, Nestlé Canada

Grocery Business Advisory Council Phil Donne, consultant Tom Barlow, Canadian Federation of Independent Grocers Perry Caicco, CIBC World Markets

Cori Bonina, Stong’s Market

@grocerybusiness © Copyright 2014. 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 Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6

Chris Terrio, CROSSMARK Canada Inc.

Sign up for our eNewsletter at grocerybusiness.ca

Front End

Golden Pencil Awards 2014 Marc Guay and Louise Wendling

The Food Industry Association of Canada has named Marc Guay, president, Pepsico Foods Canada, and Costco executive Louise Wendling, recipients of the 2014 Golden Pencil Award.

Guay is president of PepsiCo Foods Canada.

He began his career with PepsiCo, Inc. in Canada in 1986 and held a variety of positions, primarily in sales and general management, before being named Frito Lay Canada president in 2001, and PepsiCo Foods Canada president in 2008, with the added responsibility of Quaker Canada. He holds a Bachelors Degree in Business Management from l’Ecole des Hautes Etudes Commerciales (affiliée à l’Université de Montréal). Since 2001, Guay has served on the board of directors of Food & Consumer Products of Canada, and was

appointed chair in 2007. In 2008, he joined the board of directors of The Grocery Foundation.

Wendling recently announced her retirement as country manager (president and CEO) of Costco Wholesale Canada Ltd., after 28 years.

Wendling began her career in retail in 1976 when she joined the Hudson’s Bay Co. as a senior executive. In 1986, Wendling was one of three original founders of Price Club Canada, developing the concept and culture from inception through to when it merged with Costco Wholesale. In 2001, she was named country manager for Costco Wholesale. She held the Canadian board chairmanship, and was an executive committee member of Costco Wholesale International.

The 2014 Golden Pencil Awards ceremony will take place on Monday, November 24, 2014, 5 to 7 p.m., at the Fairmont Royal York Hotel, Concert Hall, Toronto.

Purchase tickets: goldenpencilaward.com/tickets.html

“ We chose FCC because of their

flexibility.”

Vincent Messier-Lemoyne, Financial Director, Courchesne Larose, Montreal, Que.

When you talk financing with FCC, we’ll listen fccfinancing.ca

Front End

À LA CART: A SUPPLIER’S GUIDE TO RETAILERS’ PRIORITIES Peter Chapman, principal of GPS Business Solutions, is a marketer and consultant who spent 19 years with Loblaw Companies Ltd, most recently as senior director of merchandising. Grocery Business spoke with Chapman about his new book, À LA CART: A Supplier’s Guide to Retailers’ Priorities.

GROCERY BUSINESS: WHAT PROMPTED YOU TO WRITE THIS BOOK? Peter Chapman: I wrote À LA CART to help suppliers better understand their retail customers and their priorities. Having been a retailer myself, I realized that vendors could use some guidance as they navigate their way around the business.

WHY NOW? Our retail landscape continues to evolve. New retailers have entered the market and those who have been here for a while have changed quite a bit.

Peach Perfection

WHAT COULD SUPPLIERS IMPROVE UPON? Suppliers tend to view all retailers in the same light. In reality, they are very different, each with its own strategies and objectives. Suppliers’ products and programs need to support that.

AS A RETAILER, WHAT WAS YOUR GREATEST FRUSTRATION? My biggest frustration was with suppliers who thought their job was to get their product listed.

That is only one part of the sale; ultimately that product needs to be purchased by a consumer.

The days are gone when you could deliver an item to the warehouse and then focus on the next purchase order.

This past August, the California Cling Peach Board invited a group of Canadian distributors and media to California to witness the harvest and processing of cling peaches, almost all of which come from small family-run farms. From orchard to sorting/grading and canning, this procedure is carried out with quality and food safety in mind. Innovative and efficient processes mean that, in most cases, the trip from field to can occurs the same day.

When compared to fresh peaches, canned cling peaches have been found to be four times higher in Vitamin C, 10 times higher in foliate, and 1.5 times higher in antioxidants, according to an Oregon State University study.

September | October 2014

WHAT THREE TIPS WOULD YOU GIVE SUPPLIERS? » Develop a unique strategy for each retailer. » Realize that your product is only sold when it goes through the cash register, not when the order’s received at the DC [distribution centre]. » Never lose sight of how important great relationships are to your business.

À LA CART is available on Amazon.ca. For more information, contact pchapman@gpsbusiness.ca

Pictured (l-r): Chuck Jung, Calkins & Burke; Kara Mytrunec, Sysco; Karin Lorz, Sysco; Kristen Smith, Ontario Restaurant News; Michelle Paul, California Cling Peach Board; Bill Hammerstrom, California Cling Peach Board member; Ordell Yasinski, Tree of Life; Ken Berger, California Cling Peach Board; James Lonsdale, Shafer-Haggart.

8

HOW HAVE RETAILER/VENDOR RELATIONSHIPS CHANGED OVER THE YEARS? Relationships used to be more multi-level.

Unfortunately, now it’s all about cost, category profitability, and using leverage to get another one per cent out of the business. It’s not uncommon to hear industry people say, “It used to be more fun.”

Agritalia launched five specialty pastas from five regions of Italy at the recent Summer Fancy Food show in New York City. The event featured a cooking contest in which competing teams followed a recipe using the new Regionali brand of pastas and sauces. Tree of Life Canada is introducing the line in Canada this fall. Pictured: Contest winners Leanne Franklin and Jacqueline Moody.

Front End

Transitions Metro Inc. recently named Carmen Fortino senior vice-president and Ontario division head.

Formerly, Fortino was executive vice-president, business development, for GNC Holdings, Inc. Nielsen has made two executive leadership changes: John Lewis was named global president, and Karen Fichuk was promoted to president, North America.

Greg Foran has been promoted to president and CEO of Walmart U.S. Foran most recently was president and CEO of Walmart Asia.

Shelagh Stoneham has been named senior vice-president, marketing, for Shoppers Drug Mart.

Before joining Shoppers, Stoneham was senior vice-president, general manager,

brands & marketing communications, for Rogers Communications Inc. Crosby Molasses Co. has made a number of changes related to the family-owned company’s succession plan. James Crosby was promoted to chief operating officer, while William Crosby joins the team with an initial focus on managing customer relationships. Lorne Goodman takes on the role of senior vice-president, with a focus on sales, business development and customer relationships.

Nick Jennery is the new executive director of provincial food bank Feed Nova Scotia.

Jennery brings more than 30 years of experience in the food and beverage industry, most recently as CEO of the Winery Association of Nova Scotia.

Previously, he was president and CEO of the Canadian Council of Grocery Distributors for 13 years.

Ana Dominguez is the new president at Campbell Canada.

Dominguez joins the company from SC Johnson Canada, where she most recently was general manager.

Doug Rodriguez is the new vice-president, corporate accounts, for Mike and Mike’s Organics. Previously, he was senior director of national concept and design for produce at Loblaw Companies Ltd.

BROKER BULLETIN Bellisio Foods and ACH Food Companies have each appointed Concord National as their national broker for grocery, drug and mass merchandiser channels. Concord National is currently the broker representative for ACH in Ontario and Quebec.

bizerba

Open Mike

Harnessing the brainpower of the boomers

By Michael Marinangeli

The baby boomers are retiring. Have you started to plan for the transition of wealth?

By “wealth,” I am not referring to money; I’m talking about the transition of knowledge and experience to the remaining generation of employees. The oldest baby boomers are now reaching the traditional age of retirement. Those of us who have had influential mentors in our lives understand the importance of wisdom passed down from those who share their personal or professional experiences.

Senior leaders who have worked in your organization for a long time understand its history, culture and values. Mission statements are important, but the stories these experienced employees pass onto the next generation can be more far-reaching and powerful.

People are the most important asset in any organization. Successful execution is primarily the product of excellent talent from top to bottom. However, many companies continue to squander this important asset. They allow this wealth of experience, ideas and insights to walk out the door upon retirement, without giving it a second thought. These employees take with them knowledge that is critical to the performance of their job, gained through experience. grocerybusiness.ca

The food industry is no different from any other. Over the next several years, it will be facing a mass exodus of competent and well-trained staff at all levels – from the clerk filling the shelves to the leader of the company.

Is your organization prepared for this?

Transition Tips • C onsider bringing back some of these older employees on a part-time basis to help fill the void in experience and to mentor some of the younger employees who have been identified for promotion.

• E nsure the work environment is conducive, not only for older and more experienced employees to act as mentors, but also for exposing younger people to all facets of the business that made it successful.

• M ake sure that today’s managers understand that a key component of their role is people development, and that the tools and processes are in place to facilitate this requirement.

• I dentify internal potential successors, and ensure these people have a development plan in place before the experienced employees depart.

The lifeblood of any organization is its people.

Succession planning and talent development must be a top priority. This topic deserves as much industry attention as consolidation, declining margins, sales erosion, and squarefootage growth. And its impact could be much more far-reaching.

After all, sometimes, older is better.

• H ave people development plans in place that incorporate the use of retired employees.

• A void the pressure to deliver short-term results by allocating the time and money to develop future talent.

Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. Contact: mjmarinangeli@gmail.com Michael is a founding member of the Grocery Business Advisory Board.

September | October 2014

11

You can never be too rich Introducing new IĂ–GO Moment. An irresistibly rich 8% fat yogurt, made with whole milk, fresh cream and luscious fruits. A launch supported by National TV, Foodie magazines, web, social media, in-store support and a National couponing program. Sales projections are up. Enjoy the moment.

Find out more at iogomoment.ca IĂ–GO. Owned by Canadian dairy farmers.

Congratulations!

CORI & KEN

Cori Bonina and Ken Nilsson

Cori Bonina and Ken Nilsson couldn’t have picked a more appropriate

“ It was the perfect day for our Perfect Pairing wedding.”

Cori Bonina

theme for their May 17, 2014 wedding than “A Perfect Pairing.” Bonina, a trained chef, owner of Stong’s Market, and past chair of the Canadian Federation of Independent Grocers, and Nilsson, general manager of Cori’s Kitchen, welcomed 145 guests to the ceremony at the Seymour Golf & Country Club, North Vancouver, B.C. It made perfect sense that the newlyweds later honeymooned in Napa, California.

“The sun was shining, food and wine were beautifully matched and we were surrounded by the love and support of our friends and family,” Bonina says.

“Ken and I had a fabulous and memorable wedding; thanks to everyone who helped us celebrate our very special day.”

grocerybusiness.ca

September | October 2014

13

Walmart rolls out

Grab&Go

Grab&Go locker at Walmart’s Scarborough West Supercentre

Walmart Canada began rolling out its Grab&Go service in late August, with 10 Supercentres in southern Ontario, plus the Walmart Canada head office in Mississsauga, installing lockers.

Grab&Go is Walmart’s click-and-collect service, which allows customers to place an order on Walmart.ca and pick it up at any

location equipped with Grab&Go lockers.

Each locker unit includes 40 doors.

During the online checkout process, customers choose the most convenient location, and, when the order is ready to be picked up, receive an email confirmation and a six-digit code to access a designated Grab&Go locker.

When the code is entered at the in-store

IS A

PROUD SUPPLIER TO

FORTINOS

locker, the door to the compartment containing the parcel pops open. Customers have three days to pick up their orders.

Walmart has installed Grab&Go lockers at 10 Supercentre locations, in Oakville, Waterdown, Vaughan/Maple, Mississauga, Georgetown, Milton, Burlington, North York and Scarborough.

Home Brew Grocery store sales of packaged coffee are expected to perk up as McDonald’s introduces its McCafé brand of ground, whole bean, and single-cup coffee pods to supermarket shelves over the next several months. McDonald’s manufacturing and distribution deal with Kraft Foods Group Inc. means the fast-food retailer is taking its quest to be #1 with coffee lovers, right into consumers’ homes.

Grocery Business spoke to John Betts, president and CEO, McDonald’s Restaurants of Canada Limited, about what the deal means to Canadian grocery retailers.

Grocery Business: The distribution of McCafé into the grocery channel is major news for the industry. What does this collaboration mean for your respective companies?

John Betts: The launch of McCafé Premium Roast Coffee in grocery stores is a game changer for us that builds on our strong coffee credentials. We have been working with Kraft for more than two decades, and this is a fantastic opportunity to collaborate and bring McCafé into consumers’ homes. The Kraft distribution network is second-to-none and was a natural choice for our entry into the grocery channel.

What consumer insights drove the deal?

Everything we do is about meeting our customers’ needs. We know that more than half of Canadians enjoy at least one cup of coffee per day at home and QSR-branded offerings in retail make up 16 per cent of the category. There is a great demand and incremental growth potential for McCafé

Premium Roast Coffee on grocery shelves, and, by offering it in a variety of formats, we are making it even easier for our customers to integrate their favourite coffee into their everyday routines.

How will McCafé be positioned to the consumer?

McCafé is a premium brand, and will continue to be positioned the same way in grocery channels. McCafé Premium Roast Coffee will be available in several new formats: roast and ground, K-Cup compatible and TASSIMO single-serve cups.

So, Canadians can now add McCafé coffee to their grocery lists, and we couldn’t be more excited to make our great tasting coffee part of their everyday routines.

When will we see McCafé in stores, and can you describe the marketing support for the launch?

Beginning September 29, McCafé Premium Roast will be in major retailers across the

John Betts, president and CEO McDonald’s Restaurants

country. The launch is supported by a large multi-channel advertising campaign, including TV, radio and digital.

Will additional SKUs be launched?

We always aim to surprise and delight our customers, and we’ll continue to evolve our offerings based on their needs and wants.

We’re excited to partner with McDonald’s Canada to help Canadian consumers enjoy their much-loved McCafé Premium Roast Coffee at home. Our partnership leverages each of our best-in-class capabilities and will ultimately help us drive category growth by delivering one of Canada’s largest, fastest-growing coffee brands to coffee lovers nationwide.

Brian Kerr, vice-president, Beverages, Kraft Canada

September | October 2014

15

It doesn’t often happen that a senior executive begins the corporate climb at the age of 12, but during his four decades in

THE INNOVATIVE

Visionary VINCE SCORNIAENCHI GROCERY CAREER HIGHLIGHTS » Executive VP Fortinos and Fresh Food Development » Executive VP, Fortinos & Zehrs Markets » Executive VP, Fortinos » VP Operations, Fortinos

HOMETOWN: Hamilton, Ont. EDUCATION: Graduated from a marketing program at Mohawk College FAMILY: Married for 34 years to Elisa, with a grown family: Natasha, Jennifer and David. Proud grandfather of Sienna.

PERSONAL INTERESTS: Golf, collecting wine

the grocery business, that’s just what Vince Scorniaenchi has done.

Along the way, he has worked in just about every capacity in the 53-year-old chain, now a selfmanaged banner within the Loblaw family.

By Sally Praskey

Photos: Matthew Liteplo

During that time, Scorniaenchi has been instrumental in the

Never seeking the spotlight, Scorniaenchi takes his greatest

retailer’s growth to 22 stores, its expansion into the Greater

pleasure in mentoring employees who go on to assume senior

Toronto Area, and the rollout of franchise stores.

leadership positions in the industry, much as his uncle John

But where Scorniaenchi has really made his mark is in realizing

Fortino did for him.

his vision for Adventure Stores, which, among other innovations,

“Vince is both an entrepreneur and a visionary,” says Jim

brought a focus on the fresh department, natural foods, and

Slomka, sales director, Clorox Canada. “Respected by his

home-meal replacement that was far ahead of the industry when

competitors, suppliers and employees, Vince continues to be a

the prototype debuted in 1996. Over the years, the concept has

pioneer with innovation that is the talk of the industry.”

evolved into an expanded fresh offering, extensive line of organ-

Grocery Business recently visited Fortinos’ impressive new

ics, and the Pane Fresco food hall, boasting 200 ready-to-eat

store at Fiesta Mall in Hamilton, Ont. What follows is our

items with seating for 125 people – again raising the industry bar.

interview with Scorniaenchi about his career and his view of the grocery industry.

VINCE SCORNIAENCHI EXECUTIVE VP FORTINOS AND FRESH FOOD DEVELOPMENT Grocery Business: Vince, you’ve worked over 40 years in the grocery business; how did you start out?

one side of the store. This had never been

Did you have a mentor?

done before. The store also featured an

I’ve had the benefit of working with many

Vince Scorniaenchi: I started off as a

within a store, with over 2,000 SKUs.

janitor at the stores when I was 12 years

industry first in natural foods – a store In 2011, we opened the next generation

old. I’ve worked all the fresh departments

of Adventure Stores. With this one, we

and most aspects of the store. Some of

expanded the fresh offering further, and

my key roles were director, and then VP of

put all our prep areas onto the floor, in full

operations until I became executive

view of the customer. We doubled our

vice-president in 1994.

organic food section to over 4,000 lines, with a special emphasis on the fresh

What career accomplishments are important to you?

component of organics.

On two separate occasions, the team

different food stations with 200 ready-to-

redefined the food shopping experience.

eat items, and seating for 125 people.

The initial time was in 1996, when we

Since then, we’ve opened three stores in

opened the first of what we call the

that model and expanded/renovated

Adventure Stores. They featured a vastly

seven others. I expect it to be in 20 of our

expanded fresh food offering. All the fresh

22 stores in the next couple of years.

departments were brought together on grocerybusiness.ca

We also introduced Pane Fresco – six

people who have mentored me along the way, but I would say the most influential was John Fortino. He gave me the opportunity to grow within the business. I was a store manager at 23 years old, managing 150 people.

John taught me that people come first – employees and customers – and that’s always remained with me. His motto was: honesty, modesty and hard work. I like to believe that those are the things I stand for as well.

What do you think differentiates Fortinos?

We’re a franchise business, so we have franchisees in large stores, which is unique in the industry.

September | October 2014

17

differentiation that are difficult to copy. We

What do you see as the future of grocery retailing?

have rail beef, which is kind of a dying trade;

I see that customers will not want to shop as

we boil our Montreal-style bagels in the

frequently in the big stores – those that have

old-fashioned way; we have store-made

general merchandise and are over 100,000

artisan bread; a natural food department; the

sq.ft. I think small stores that offer personal-

Pane Fresco offering; and a full-service floral

ized service in urban markets will do well.

I think we have multiple points of

department.

Plus, the company invests a lot in training

But I think the bulk of consumers are looking for convenience, one-stop shopping for food,

employees, and I think it’s a difference that

and a great HMR offering because they’re

the customers experience when they are in

time-starved.

the store.

What do conventional stores need to do to compete?

What will be the impact of online grocery shopping?

I think it will have an impact, but much greater

The key would be an unwavering commitment

on dry and non-perishable goods than on the

to fresh. Everybody talks about being better at

fresh goods. It’s going to take time before it

fresh, but you go into the store and it doesn’t

builds to a significant portion of the business,

match the commentary or the flyers.

simply because of the logistics involved. Even

Second, after many years of everybody tiptoeing into HMR, it’s time to get serious and

with the click-and-collect model, the stores have to be reconfigured in order to handle that.

be committed to it. The consumer is now demanding it. The bar has been raised, and I

Final thoughts?

think if you’re not into it in a very significant

In my 40-year career, I’ve seen companies

way, it’s going to be very detrimental to a conventional store.

come and go. I’ve seen independents rise and decline, and then rise again. Same thing with discounters; we’re back on an upswing for discount stores now. But in the end, I think the secrets to success in this industry are, simply: • Treat your employees well; • Be 100 per cent focused on your customers; • Be consistent in store execution – don’t change strategy week to week, or month to month, or year to year; • Make a commitment to fresh.

Those four things have always been there, and regardless of what’s new in the market, the ones who do those the best are the ones who will win.

18

September | October 2014

FOR Fort When John Fortino and two partners opened a 700-sq.-ft. market in the heart of Hamilton in 1961, few would have predicted it would grow into one of the most successful and innovative chains in southern Ontario. But Fortino always dreamed big. “Even then, John’s vision was to grow bigger, to have lots of stores, and I believed that it would happen,” said original partner Umberto Spagnuolo in the retailer’s 50th anniversary book From the Heart.

TINOS inos

By Sally Praskey

And grow he did, going up – and succeeding

175,000-sq.-ft. distribution centre in Hamilton,

– against much larger competitors who

and expansion into the Greater Toronto Area

couldn’t match Fortinos’ unwavering

in 1991.

commitment to fresh meats and produce.

When Scorniaenchi took the helm in 1994, As price wars raged in the 1980s, manage-

he ushered in a new era for grocery retailing

ment developed a plan for the future that used

with the opening of the first of the “Adventure”

a unique franchising model to accelerate

concept stores in 1996, making his dream of a

growth. The first of Fortinos’ franchised stores

new shopping experience a reality.

debuted in 1988 to much fanfare.

After a period of consolidation with Loblaw, Meanwhile, Loblaw came calling that same

Fortinos transitioned back to a self-managed

year, and, after much soul-searching, the

banner within the Loblaw family in 2010, and

partners made the decision to sell Fortinos.

re-opened its head office in Hamilton.

Because the business was thriving, Loblaw executives wisely decided that the new

Fifty-three years later, with John Fortino’s

acquisition should continue to be operated

vision realized, Fortinos continues to stay

as a separate business by the existing

ahead of the competition by defining the best

management.

of grocery retailing.

With the financial resources of a new parent company behind it and the conversion of three Hamilton SuperCentres to the Fortinos banner, the chain began to experience explosive growth. “With the conversion of the Loblaw stores, we were now into the 60,000-squarefoot range, and we started to see the magic of bigger stores… So that became the model moving forward,” said executive vice-president Vince Scorniaenchi in From the Heart. The growth also precipitated the construction of a

grocerybusiness.ca

JOHN FORTINO: A BELOVED FOUNDER Fortinos founder John Fortino, who passed away in 2011 at age 76, was the “heart” behind the “Supermarket with a heart.”

Honesty, modesty and hard work were the hallmarks of his success.

The idea for the original store was simple: give the growing Italian immigrant population of Hamilton a market where they could find fresh-cut meats and produce – in other words, a taste of home. The focus on fresh remains a cornerstone to this day.

A commemorative monument to the beloved company founder – who knew every employee and their families – stands outside the entrance to Fortinos Mall Road, where he visited with friends almost every day after his retirement.

GREAT CIRCULATION & READERSHIP

GREAT

RESULTS

Sept | Oct 2014

Mike and Mike’s Organics The Convenience Consumer What’s driving growth in packaged produce?

Produce Manager

RISK

MANAGEMENT The Canadian produce industry is working to secure financial risk protection for fresh fruit and vegetable dealers.

By Ron Lemaire

Growing, harvesting, packing and shipping perishables is risky. With unique characteristics and an often volatile financial environment, the fresh produce sector is particularly vulnerable to payment disruption.

Recognizing the unique risks in this sector, the Government of Canada included special protection for suppliers of perishable products in the Bankruptcy and Insolvency Act (BIA).

Unfortunately, the conditions required are so complicated and limiting that few fruit and vegetable suppliers can access the security provided by the law. In practice, produce suppliers have no protection in Canada when buyers declare bankruptcy.

The absence of this protection in Canada has also resulted in a growing trade irritant with the United States, a critical source of fresh fruit and vegetables for the Canadian market. In the U.S., produce suppliers are protected by a statutory deemed trust established through the Perishable Agricultural Commodities Act (PACA). When shipping to the U.S., Canadian firms receive the same PACA trust benefits as U.S. entities. This lack of reciprocity has caused frustration within the U.S. industry, which has a large Canadian market presence and is concerned about the higher financial risks from operating in Canada.

In order to address the gaps between the two countries, the Regulatory Cooperation Council mandate agreed to by President Obama and Prime Minister Harper in 2011 included commitments to "develop comparable approaches to financial risk mitigation tools to protect Canadian and U.S. fruit and vegetable suppliers from buyers that default on their payment obligations."

grocerybusiness.ca

Ron Lemaire President of the Canadian Produce Marketing Association

Industry Canada is currently undertaking a statutory review of the BIA, including looking at the specific protections for fruit and vegetable suppliers. The minister of industry is expected to table a report in Parliament in the fall.

The recommendations in the minister’s report will have important effects for the dynamic produce industry. In light of this, the Canadian Produce Marketing Association, together with our Fresh Produce Alliance partners at the Fruit and Vegetable Dispute Resolution Corporation and the Canadian Horticultural Council, submitted a brief to Industry Canada outlining the preferred solution of the produce industry – a limited statutory deemed trust, modelled on what currently exists in the U.S. The Canadian and U.S. industries have long worked together on this file, and U.S. produce industry associations and companies also submitted comments.

Action is urgently required. Steps are already being taken within the U.S. government to remove the special access to PACA that Canadian firms receive if a solution is not found soon. With 40 per cent of the produce grown in Canada exported to the U.S., such a move would add costs and complexity to exporting produce that Canadian firms simply can’t afford.

A limited, statutory deemed trust would provide effective, inclusive protection that takes into account the unique characteristics of trade in perishable products. Without a solution, the end result will be higher prices and lower selection and quality for Canadian fruit and vegetable consumers.

September | October 2014

23

o t s d i k e r i p s n i s ’ t e l , r Togethe

’ ! r e t h g i r b t a e ‘ Join the movement On March 31, 2014, the ‘eat brighter!’ movement was launched.

The two-year commitment between Sesame Workshop and PMA enables produce suppliers and retailers to tap into the influence of the Sesame Street brand to help kids ages 2-5 eat more fresh fruits and vegetables.

What the ‘eat brighter!’ movement provides: • Royalty-free access to Sesame Street character images for packaging, POS, in-store signage, advertising and more • A unified industry message to promote something great— healthy eating and lifestyles—to children and their families • Alignment with the Sesame Street brand, trusted by moms and loved by kids

Visit pma.com/eatbrighter to learn more.

Produce Marketing Association pma.com | +1(302)738-7100 ©2014. Sesame Workshop. All rights reserved.

#eatbrighter

Schedule-at-a-glance

PRODUCE MARKETING ASSOCIATION, 2014

SCHEDULE AT-A-GLANCE

ANAHEIM, CALIFORNIA OCTOBER 16-19

Thursday, October 16

Saturday, October 18

Sunday, October 19

12:30 p.m. – 5:00 p.m.

Retail Produce Tour *

7:00 am – 8:30 am PMA Foundation - Race for Talent*

8:00 am – 5:00 pm Innovation @ Work

Friday, October 17

8:00 am – 5:00 pm Innovation @ Work

7:45 am – 9:45 am Breakfast General Session

7:45 am – 9:45 am Breakfast General Session

10:00 am – 5:00 pm Exposition

7:00 am – 8:30 am PMA Foundation Women’s Fresh Perspectives Leadership Breakfast* 8:00 a.m. – 5:00 p.m.

Innovation @ Work 8:45 am – 10:15 am Workshop Series I 10:30 am – 12:30 pm Brunch General Session 12:45 pm – 2:15 pm Workshop Series II 12:45 pm – 2:15 pm Eat Brighter! Town Hall 2:35 p.m. – 4:05 p.m.

Workshop Series III

10:30 am – 11:00 am Rookies & Cookies Reception 10:00 am – 5:00 pm Exposition 5:15 pm – 7:30 pm Floral Networking Reception 5:15 pm – 7:00 pm Global Connections Reception 5:15 pm – 7:00 pm Industry Talent Reception 5:15 pm – 7:00 pm Science & Technology Reception

3:30 pm – 5:00 pm Emerging Leaders Program Capstone and Graduation 4:00 pm – 5:00 pm Fresh Ideas in Action Reception 5:00 pm – 6:30 pm PMA Foundation Young Professionals Reception 5:30 pm – 6:30 pm President’s Invitational Reception 6:30 pm – 8:30 pm Welcoming Reception

* May require separate registration grocerybusiness.ca

September | October 2014

25

©2014 POM Wonderful LLC. All rights reserved. POM, POM POMS WONDERFUL, POM WONDERFUL and the accompanying logos are registered trade-marks of Canada Bread Company, Limited, and used by POM Wonderful LLC under license. The “Double Bubble Bottle” Design is a registered trade-mark of POM Wonderful LLC. PF11391

It’s P∂M Time!

At P∂M, we believe fall is the most W∑nderful time of the year. Especially if your produce department is fully stocked with P∂M P∂MS, P∂M Wonderful 100% Pomegranate Juice and P∂M Wonderful fresh pomegranates. All three will be supported with a national marketing campaign including TV, in-store POS, promotional support, and public relations! To help sweeten your season, our tasty trio will be supported by the biggest merchandising team in produce.

Get ready. It’s gonna be P∂M time all the time.

Order your P∂M display bins now at GetBins@POMWonderful.com or contact your local W∑nderful Brands sales representative at 877.328.7667.

wellpict.com

WE’VE GOT ORGANICS! Moms, foodies, athletes, and even kids — plus everyone in between — will be looking to enjoy the delicious health benefits that come with including Well•Pict’s Strawberries in their daily diet. Grown to the highest USDA organic standards using eco-friendly green practices, they pack a healthy punch. So order today, and watch your customers check them out faster than you stock the shelves.

See for yourself at PMA Booth #912

Produce Manager

MIKE AND MIKE’S

ORGANICS

By Angela Kryhul

Ten years ago, Mike Dattoli and Mike Fronte took a “leap of faith” when they established their organic produce distribution business. Today, Mike and Mike’s Organics is the go-to source for hundreds of fresh, certified organic fruits and vegetables.

Extolling the virtues of organic fruits and vegetables wasn’t exactly a hip line of work to be in 10 years ago when Mike Dattoli and Mike Fronte started Mike and Mike’s Organics. Organic produce had yet to really catch on with consumers, and it was barely on the radar of grocery retailers.

But what a difference a decade makes.

From apples, oranges, pears and avocados to kale and shishito peppers, Mike and Mike’s Organics is the go-to for a vast selection of certified organic products sourced from Ontario, Quebec, B.C., the U.S., and internationally.

The company has grown from only three employees a decade ago to 35 staff working out of a warehouse/distribution facility in Vaughan, Ont. The company offers as many as 300 different fresh items each week, plus a 25-item snack line.

Both Fronte, president, and Dattoli, vicepresident, operations, have deep roots in the produce business. Fronte worked for Longo Brothers Fruit Markets and Pusateri’s Fine Foods in Toronto before taking a general manager position with Pro Organics, a produce distributor. Dattoli, meanwhile, cut his teeth in retail produce at the tender age of 14 while working weekends at Sunkist Food Market in Toronto’s Greektown neighbourhood, and later as a produce department manger for No Frills.

The two met more than a decade ago at Simply Organics, a distribution business then owned by Fronte. After Fronte sold the company to another distribution firm, the two Mikes decided it was time to start their own business Like any new business, the first few years were challenging. While the partners saw the potential for growth in organic produce, consumer demand was still in the early stages.

The company went through a learning curve during the first five years that included a multitude of sales calls, and educating retail buyers about organic produce.

“To be honest, at first I didn’t know what to expect because I’d been working in the conventional [produce] business for a number of years and organics were very new to me,” Dattoli says. “But I felt really strongly that organic was the right thing to do. I felt it was the way of the future.”

Dattoli and Fronte were right. Consumer demand for organics has exploded over the past five years, and there are more growers offering more selection.

Ten years on, the two partners are refreshing the brand by bringing everything, including the Organic Select snack line, under the Mike and Mike’s Organics name. There’s a new logo, updated website, and a new slogan: “We are all organic.”

One thing that hasn’t changed is the company’s commitment to offering fresh, certified organic produce, 365 days of the year.

“We’ve always prided ourselves on having the largest selection and availability,” Fronte says. “Our mantra is: If it’s available, we’re going to stock it.”

Mike Dattoli (left) and Mike Fronte at their head office in Vaughan, Ont.

September | October 2014

29

E C U D C O U E R D P O PR

R O D VEN OR R S I O V AD ES DAT ES T DA

SPONSORED BY: SPONSORED BY:

HUGE SALES GROWTH IN CANADA HUGE SALES GROWTH CANADA Natural Delights Medjool Date SalesIN to Canada Natural Delights Medjool Date Sales to Canada

Natural Delights Medjool Dates Natural Delights Medjool Dates are the King of Dates. They offer a melt-in-your-mouth caramel taste are the King of Dates. They offer a melt-in-your-mouth caramel taste and chewy texture, amazing versatility, lots of antioxidants, a lovely and chewy texture, amazing versatility, lots of antioxidants, a lovely amber colour and easy portability. Medjools are grown in the ideal amber colour and easy portability. Medjools are grown in the ideal climate of the Bard Valley straddling California and Arizona, which climate of the Bard Valley straddling California and Arizona, which produces the biggest, moistest, and sweetest dates in the world. produces the biggest, moistest, and sweetest dates in the world.

Datepac LLC Datepac LLC was established in 2002 to consolidate the packing of Medjool dates was established in 2002 to consolidate the packing of Medjool dates for the Bard Valley Medjool Date growers. Based in Yuma, AZ, it for the Bard Valley Medjool Date growers. Based in Yuma, AZ, it remains the largest and most modern Medjool date packing and remains the largest and most modern Medjool date packing and marketing facility in the US. marketing facility in the US.

NATURAL DELIGHTS IN CANADA NATURAL DELIGHTS IN CANADA

% 15 15% ANNUALIZED ANNUALIZED

$7.9 Million $7.9 Million $3 Million $3 Million

GROWTH OVER THE LASTOVER 5 YEARS GROWTH THE LAST 5 YEARS

% % 163 163

2007-2008 2007-2008

2013-2014 2013-2014

OUR OUR FAMILY FAMILY TREE TREE

More SKUs = more customer trial more often More SKUs = more customer trial more often

Research proves that a sales lift occurs—even when Research proves that a sales lift occurs—even when sold at a higher price—when carrying a larger family sold at a higher price—when carrying a larger family of Natural Delights SKUs, and merchandising and of Natural Delights SKUs, and merchandising and promoting them. We offer different grades, packages promoting them. We offer different grades, packages and sizes—including 11lb bulk boxes, 1lb and 12oz tubs—and and sizes—including 11lb bulk boxes, 1lb and 12oz tubs—and bulk, whole, conventional, organic, as well as coconut, bulk, whole, conventional, organic, as well as coconut, almond and pistachio date rolls to appeal to every almond and pistachio date rolls to appeal to every customer segment. customer segment.

MEDJOOLS AND MEDJOOLS AND THE THE HOLIDAYS HOLIDAYS

55% 55% of annual sales are made of annualthe sales are made between Thanksgiving between Thanksgiving and Newthe Year’s holiday and Newseason Year’s holiday season

Medjool Dates are perfect for the Medjool are perfect for they’re the holidays.Dates You might even say holidays.

You might even say they’re naughty and nice: decadent, yet naughty and nice: decadent, good-for-you!

No wonder theyet good-for-you!

No wonder Thanksgiving through Newthe Year’s Thanksgiving through New period accounts for 55% ofYear’s all period 55%sales. of allSo it’s Naturalaccounts Delights for annual Natural Delights annual sales. Sofilled it’s important to keep the pipelines important to ordered, keep the merchandised pipelines filled and all SKUs and all SKUs ordered, merchandised and promoted during the top-selling and promoted during the top-selling Medjool date season.

Medjool date season.

Place Natural Delights Medjool Dates on or near Place Natural Delights Medjool Dates on or near banana tables and with the fresh-cut or valuebanana tables and with the fresh-cut or valueadded fruit sections. added fruit sections.

LEADING IN LEADING IN SUSTAINABILITY SUSTAINABILITY

Use floor-standing shipper/displayers for: Use floor-standing shipper/displayers for:

The Bard Valley doesn’t The Bard Valley doesn’t suffer from insects or suffer from insects pests, so pesticidesor are pests, so pesticides are not used and we safeguard not usedbirds and we safeguard against with protecagainst birds with protective netting. Our industry tive netting.

Our industry also uses advanced water also uses advanced water conservation technologies. conservation technologies.

PRIME SELLING MONTHS PRIME SELLING MONTHS

ORGANIC ORGANIC GROWTH GROWTH

D CEERRTTIIFFNIIEEIDC CORGANIC ORGA

Customers are looking for a range of organic whole dates and Customers are looking for a range of organic whole dates and date rolls, and organic represents our fastest growth segment. date rolls, and organic represents our fastest growth segment.

Only special fertilizers—and no chemical pesticides or herbicides— Only special fertilizers—and no chemical pesticides or herbicides— are used. Many growers also use organic practices but have not are used. Many growers also use organic practices but have not certified as organic. certified as organic.

• BULK •• BULK WHOLE •• WHOLE CONVENTIONAL • CONVENTIONAL & ORGANIC ORGANIC •& DATE ROLLS • DATE ROLLS Coconut Coconut Almond Almond Pistachio Pistachio

MEDJOOL MEDJOOL MERCHANDISING MERCHANDISING

11 lb. red bulk box 11 lb. red bulk box

WWW.NATURALDELIGHTS.CA WWW.NATURALDELIGHTS.CA

Jan. Jan. Feb. Feb. Mar. Mar. Apr. Apr. May May Jun. Jun.

Health & Wellness Health & Wellness Valentine’s Day Valentine’s Day Easter Easter Ramadan Ramadan

Jul. Jul. Aug. Aug. Sep. Sep. Oct. Oct. Nov. Nov. Dec. Dec.

Ramadan Ramadan

New Crop New Crop Holidays Holidays

Store Medjool dates in your cooler, away from all Store Medjool dates in your cooler, away from all moisture. Keeping your dates cool yet dry is the moisture. Keeping your dates cool yet dry is the best way to enhance shelf life, and make sure to best way to enhance shelf life, and make sure to rotate older product with recently received product. rotate older product with recently received product.

For more information on For more information on merchandising and promotional merchandising and promotional tools, or a “Promo-in-a-Box” tools, or a “Promo-in-a-Box” kit, please contact kit, please contact Ken Berger at Ken Berger at ken.berger@rogers.com ken.berger@rogers.com or 416-200-7207. or 416-200-7207.

Bilingual shipper/ Bilingual shipper/ displayers are available displayers are available in Canada. in Canada.

Produce Manager

FRESH AND FAST

THE CONVENIENCE CONSUMER WANTS IT ALL

By Virginia Zimm

For consumers, and particularly Millennials, planning and shopping for meals is not a pre-planned activity. Customers are deciding what to have for dinner while in the store and just prior to dinner that night. Because little or no thought has been put into meal prep, retailers have an opportunity to offer unique items that cater to the Convenience Consumers’ specific needs.

So, how do you engage the Convenience Consumer?

For starters, retailers should focus on changing habitual shopping patterns by moving the focus from discount stock-up visits to meal occasions, which can include cooking from scratch, semi-homemade or fully-prepared meals.

In-store merchandising by meal occasion is

key because offering consumers a convenient solution also creates an opportunity for incremental sales.

And how does this opportunity play out within the produce department?

Canada is a multicultural culinary mosaic, which presents a wide variety of opportunities for retailers to create mealtime solutions tailored to their store’s specific demographic.

Produce managers should observe who frequents their store and what they purchase.

And while it’s important to stock the shelves with the products these customers are looking for, it’s also important to add value to their shopping experience and keep them engaged by creating new meal possibilities.

In the produce department, meal components requiring minimal thought and

preparation, including salad kits and valueadded vegetable side dishes, are gaining in popularity and, according to Nielsen, growing in double digits.

These convenient produce options fit the “semi-prepared” bill for consumers who want to feel involved with food prep, however limited.

Retailers have an opportunity to provide easy meal solutions. For example, combining produce items that complement each other creates an associative behaviour that will be repeated. It’s a perfect way to drive incremental sales.

Another idea, which encourages a new salad or roasted veggie opportunity, is to cross-promote or package together fennel, beets and jicama – a combination that would

Step Up to the Plate Assembling meals is a popular trend among Convenience Consumers who still want to be involved with food preparation but are happy the guesswork and prep has been done for them. These consumers look for meals with pre-made or valueadded elements. In the produce department, there are so many combinations that the choices really are endless.

32

September | October 2014

COLESLAW

RAMEN AND TOM YUM

POTATO SALAD

is back mainly because the burger

are traditional Asian soups that

is a huge foodservice trend this

is enjoying renewed popularity.

are becoming very popular dishes

year that also has its own unique

Chefs depend on coleslaw as a

at foodservice. If retailers cross-

twist. Baby red-skinned potatoes

deliciously crunchy topping for

merchandised the ingredients for

are the perfect base for a traditional

lamb, pork, turkey and good ole

these soups, the customers who

warm German potato salad.

beef burgers.

are drawn to these flavours and

Retailers can create the fixins for a coleslaw with a contemporary twist, by putting shredded red, white and napa cabbage together and building a display featuring Vidalia onions, cilantro and lemons.

textures would be delighted to find a soup kit with all the fresh ingredients combined, but not yet cooked.

Cross-promote or package the potatoes with shallots, dill, chives, broccoli and radish sprouts, along with a fresh vinaigrette dressing.

Produce Manager

CUTTING EDGE

What’s driving the double-digit growth of packaged produce and salads? Consumer demand for fresh and “eating clean” is a big driver.

not necessarily have been chosen by the consumer. This approach can also help alleviate shrink within categories with lower turns.

Retailers should also keep up on trends in foodservice. At restaurants, people are noshing on ramen, grilled halloumi and fresh figs, chips made with plantain, yucca and taro, and vegan ceviche made with cubes of citrusy melon.

Encouraged by their restaurant meal adventures, home chefs are embracing produce as an entrée by sculpting skyscraper salads with zucchini noodles, heirloom carrots and candy cane beets, with protein on the side.

Eager to cook up new dishes but not necessarily kitchen savvy, consumers are also looking for suggestions when it comes to particular ingredient combinations and preparation instructions.

They want to make better, healthier and more exciting meals but may lack the knowledge and creativity. By packaging these produce items together and providing preparation tips, the guesswork is taken out of dinner: it’s a quick-fix solution for the consumer and a value-add, premium ring for the store.

Virginia Zimm is president of Faye Clack Communications Inc., Toronto. vzimm@fayeclack.com

grocerybusiness.ca

Mix ’n Match

Packed with Protein

At home, consumers like to try some of the combinations they've eaten in restaurants, including chopped greens and salad blends containing kale, wasabi arugula and bok choy.

Marketers are adding protein-rich foods and ingredients to packaged bowl salads.

Popular items are chicken, turkey, cheese, beans and seeds.

Convenience is King The convenience factor is a key selling point for value-added and ready-to-eat vegetables and fruit. And, thanks to salad kits and meals-in-a-bowl, consumers with adventurous palates have the opportunity to sample foods they may be unfamiliar with.

Going Gourmet

Families Prefer Fresh The presence of children in the home is one of the strongest indicators of the likelihood to purchase fresh products.

Affluent households with young children are especially willing to pay more for fresh produce.

Source: Packaged Facts – Produce and Salads U.S. Market Trends

Higher-margin salads, with upscale gourmet positioning, appeal to consumers who consider themselves to be foodies.

IT'S IN THE

BAG

BAGGED SALADS

$ SALES

TOTAL

669,554,007 14 208,162,029

9

SALAD – BAGGED

415,091,745

15

132,064,722

9

BROAD LEAF 254,462,262 VEGETABLES – BAGGED

13

76,097,307

11

$ VOL UNITS % CHG

UNITS VOL % CHG

Source: Nielsen, 52 weeks ended June, 2014, national sales (excluding Newfoundland)

September | October 2014

33

CE U D PRO

W

atermelon is increasingly recognized as not only a delicious and refreshing treat, but as a healthy, must-have part of a well balanced diet. Research from around the globe is making it clear that the healthful attributes of watermelon are such that it should be consumed yearround and not just in the summer. Consumers in both Canada and the US are part of this trend and eating more watermelon whenever it’s available. While the US is the largest supplier of watermelon to Canada during the spring and summer months, Canadian growers are increasingly joining the party with late season production in Ontario and BC. With winter and early spring watermelon coming north from Mexico and Central America, watermelon is becoming a truly continental product for all of North America. For further information on all aspects of watermelon please visit the National Watermelon Promotion Board’s website, www.watermelon.org.

R O D VEN

R O S I ADV S

LON

E ERM WAT

SPONSORED BY: NATIONAL WATERMELON PROMOTIONAL BOARD

1st & 2nd Quarter Retail Revenue Historical and Projections

Millions $1,000 $900 $800

$985

R2 = 0.86036

$700

1st & 2nd Quarter Category Growth by Region 2014 vs 2010-13 Average

$600

$937

Historical Poly Trend

$595

$631

$671

$654

2012

2013

$729

$760

$800

$842

$883

$500 California Great Lakes

Midsouth

Northeast

Plains

50%

South Central

Southeast

West

Total U.S.

$400

40%

$300

30%

$200 $100

20%

$0

10%

2010

2011

0% -10% -20%

PROFIT POTENTIAL

-30%

Mini

Cut

Whole

While tonnage and

1st & 2nd Quarter Cut Segment Pricing 2014 vs 2010-13 Average California Great Lakes

Midsouth

Northeast

Plains

$3.00

South Central

Southeast

West

sales remain flat for whole watermelon the Total U.S.

demand for minis and fresh cut has increased dramatically. The big

$2.50

takeaways here are the enormous margins for

$2.00

fresh cut fruit and the $1.50

increased price of the mini watermelon, at

$1.00

retail, which can also feature higher margins.

$0.50 $0

2014 Mini

2010-13 Cut

Whole

Mini

Cut

Whole

2014

2015

2016

2017

2018

2019

2020

Did you know that a watermelon can feed 3 dozen people?

Enjoy a healthy lifestyle every month of the year with the sweet taste of watermelon.

Packed with vitamins A and C, the antioxidant lycopene and the amino acid citrulline, it's great for the whole family from children to grandparents.

Look for healthy watermelon recipes your family can make together at Scan code for instant access to Watermelon Selection, Health and Recipe Information

watermelon.org.

While many factors affect heart disease, diets low in saturated fat and cholesterol may reduce this risk.

THE ADVANTAGE RETAILER REPORT

TAKING STOCK

Rapidly shifting consumer expectations and the growth of e-commerce are impacting retailers’ expectations of vendors.

By Sally Praskey A gradual improvement in the retailer/supplier relationship over the past few years has stymied in 2014, according to the latest Advantage Report, the annual survey of grocery/mass/club/drug retailers conducted by Toronto-based Advantage.

Retailers rated vendors lower or the same in seven performance areas, with only customer service/ support showing an improvement. The greatest decline was in category management, with a drop in net favourable score from 24 in 2013 to 19 this year.

But there is some good news, as 51 per cent of retailers surveyed said customer/supplier relationships have become stronger. Thirty-seven per cent said they have remained the same, while 12 per cent thought they had weakened. However, when asked how they saw the relationship developing over the next year, 34 per cent of respondents expected it to weaken.

CATEGORY DEVELOPMENT: MISSION CRITICAL RETAILERS SPEAK OUT… ON CATEGORY DEVELOPMENT “ There does not seem to be enough time for us to spend together to plan out innovative promotions, etc. We used to meet with suppliers on a weekly basis.

Now, we are lucky to meet with them every two months.”

“Suppliers are inflexible when it comes to managing product assortment. They apply their policies to all retailers, at all locations, regardless.”

“We would prefer more long-term planning. Vendors should have a proactive approach to the planning cycle and provide more detail on how we can grow the business together.”

36

September | October 2014

Retailer explanations for why relationships won’t improve can be traced to category development, specifically as it relates to the practice titled “Develops category plans that help meet our sales and profit objectives,” says Vincent van der Heijden, director of client service for Canada at Advantage. Jointly agreed growth continues to be top of mind when deploying category plans, he adds.

There has been a significant shift in perceived importance of category planning due to the emergence and convergence of traditional and online category plans. “Category planning dropped in importance in 2008, and continued downward until it rebounded in 2013,” says van der Heijden. “The data suggests that retailers want to see assortments, insights,

recommendations, and long-term category plans that take into account their unique customer base.”

Over the last couple of years, the focus has moved from personnel and supply chain to category development. “This is the first time in a long time that we have seen this particular practice within category development become the top priority among retailer executive/senior management and category management personnel,” notes van der Heijden.

A paradigm shift towards omni-channel consumers coupled with pressure to integrate e-commerce channels have made it increasingly difficult for suppliers to keep pace with growing expectations from retailers.

HOW WOULD YOU CHARACTERIZE RETAILER–SUPPLIER RELATIONSHIPS? Retailers say relationships are in flux Although relationships are considered to have strengthened, retailers predict headwinds going forward

51

12 2014

37

57

34

Stronger Same

Retailer Predictions for 2015

Weaker

CONTINUED ON PAGE 38

9

Help Wanted

Priority Rank for Category Planning 2007

2008

2009

2010

2011

2012

2013

2014

2015

0 1 2

When it comes to category development, Canadian retailers in the grocery, mass, club, and drug channels believe vendors can help more by doing the following: • Managing assortment for a cohesive brand story;

3 4

• Sharing objective and relevant insights;

5

• Providing long-term category plans with at least a one-year outlook;

6

• Sharing consumer/market/category insights;

7

• Being impartial in their recommendations, and presenting objective data;

8 9

• Customizing assortment to meet channel needs (i.e., conventional versus discount);

10

After dropping off in importance for the past few years, category planning has rebounded as the #1 priority for retailers grocerybusiness.ca

• Providing tailored marketing promotions.

September | October 2014

37

>

RETAILERS SPEAK OUT . . . >

CONTINUED FROM PAGE 37

“It is not occurring yet, but when e-commerce for grocery does happen, manufacturers will have to offer us logistics solutions, such as packaging for shipping e-commerce grocery orders.”

E-COMMERCE STEPS UP While Canadian retailers and vendors have largely been taking a “wait-and-see” attitude over the past few years when it comes to e-commerce, the feedback from this year’s survey indicates that this mindset is changing rapidly as both sides become much more proactive in developing strategies and expanding resources to meet the demands of digital commerce, says van der Heijden The growth of e-commerce in the industry is setting higher expectations for communication.

“There is a growing expectation to provide more immediate data and share comprehensive data transparently,” notes van der Heijden. “E-commerce will have similar impacts in logistics: customer service will be expected to be more responsive and accurate in forecasting.

“Retailers will hold their trading partners to the highest level of performance as they demand visibility and increased service levels.”

Retailer Perceptions of Vendors – Average Change in Net Favourable Rating by Performance Area

2013 2014

35

33

Average Net Favourable Rating

30

25

30

30 28

26

25 23

20

24

24 22

23

22

23

22

22

19 15

10

5

Overall Performance

Business Relationship and Support

Personnel

Category Development

Consumer Marketing Support

Customer Marketing/ Promotion Practices

Supply Chain Management

Customer Service/Support

Retailers rated vendors lower or the same in seven performance areas from 2013 to 2014, with only Customer Service/Support showing an improvement. The greatest decline was in Category Development, with a drop in the net favourable score from 24 to 19.

Founded in Canada in 1988, Advantage™ operates internationally. Its jointly sponsored programs provide an ongoing industry benchmark for retailers and manufacturers to measure and track their relationships with key business partners.

38

September | October 2014

For more information or to participate, contact Vincent van der Heijden at 416-863-0685, ext. 134; vvanderheijden@advantagegroup.com

DISTRIBUTIONCANADA33 YEARSOFCOLLABORATION DISTRIBUTIONCANADA33 YEARSOFCOLLABORATION DISTRIBUTIONCANADA33 YEARSOFCOLLABORATION DISTRIBUTIONCANADA33 YEARSOFCOLLABORATION DISTRIBUTIONCANADA33 YEARSOFCOLLABORATION

STRENGTH

IN NUMBERS

grocerybusiness.ca

September | October 2014

39

STRENGTH IN NUMBERS

Brian Parker, president and CEO of DCI (left), with Giancarlo Trimarchi, store supervisor/financial controller, Vince’s Market

By Marjo Johne

It was no small feat when Vince’s Market, an independent Ontario grocer with locations in Sharon, Newmarket and Uxbridge, struck a deal with Montreal-based paper products giant Kruger Inc. Brian Johns, who owns Vince’s Market with his business partner Carmen Trimarchi, offers a concise explanation for how a neighbourhood grocer landed a partnership with the country’s largest paper products manufacturer, whose products include national brands such as Cashmere, Scotties, White Swan and Sponge Towels.

“We have the DCI advantage,” he says.

“With DCI, suppliers who used to have to see

40

September | October 2014

each individual retailer can now speak to 80 shareholders all at once. From an efficiency standpoint, that’s a huge advantage for suppliers. And for us independents, it means we don’t get left behind.”

Short for Distribution Canada Inc., DCI is the collective voice and negotiator for the country’s independent grocers. Since its founding 33 years ago, DCI has built a roster of 80-plus shareholder members representing thousands of independent grocers, small grocery and convenience chains, wholesalers and distributors.

This critical mass of retailers across the country translates to greater purchasing

Photos: Rodney Daw

DISTRIBUTIONCANADA33YEARSOFCOLLABORATION

NEGOTIATED TRADE AGREEMENTS WITH VENDORS ENSURE THAT THERE’S A RETURN ON INVESTMENT FOR BOTH PARTIES, SAYS PARKER. WHETHER IT’S EXECUTING A REVISED PLANOGRAM OR LAUNCHING A NEW PRODUCT, DCI MEMBERS ARE ABLE TO DRIVE SALES IN A COST-EFFECTIVE WAY.

Board of Directors DCI is governed by a board of directors elected from the membership.

Brian Parker President & CEO Peter Cavin Chair

power, says Brian Parker, president and CEO of DCI, which is based in Burlington just west of Toronto.

DCI vendors of record have access to thousands of stores whose collective sales are in the billions. This gives vendors a wealth of options in a market that continues to consolidate.

“Individually, we would have trouble reaching the scale required by some of the consumer packaged-goods companies out there,” says Parker, who took the helm at DCI six years ago. “Collectively, if we maximize our critical mass, we can compete on a more level playing field and give vendors the same opportunities as some of our competitors.”

Peter Cavin, chair of DCI’s board of directors, and director at B.C.-based Country Grocer, experienced first-hand the collective clout of DCI. In the late 1990s, Country Grocer, together with a couple of other retailers in the region, built a warehouse and delivery system to increase buying volumes and offer greater savings to customers.

“DCI helped us go direct with some of the vendors,” recalls Cavin. “Minimum buying quantities were going up and we just needed to buy differently, so it really helped that we were members of DCI.” While it began in 1981 as a buying group, DCI has since evolved into a selling organization – a strategic position that aligns

perfectly with the business goals of its members. Retailers, after all, exist to sell, and DCI works hard to help members boost sales activity, says Parker.

Peter Cavin, DCI Chair “DCI also helps its members increase sales performance by keeping them up-todate on the latest trends and best practices in the industry,” says Parker. Through the organization’s website and newsletters, as well as through events such as Grocery Showcase West, Grocery Innovations Canada and SIAL Canada food shows, members learn about merchandising, customer service, and other aspects of retailing.

Neil Kudrinko, owner of Kudrinko’s Ltd., in Westport, Ont., says DCI membership gives retailers greater access to product training, plus opportunities at meetings to have vendors update members on trends in various categories.

As it works to boost members’ sales, DCI continues to find ways for its shareholders to save on product purchasing and operational costs. Parker says DCI is constantly enhancing its cooperative trade agreements with vendors to give members more opportunities to earn cost reductions.

Independents Buying Group Ltd. (Country Grocer)

François Bouchard Vice Chair The Country Grocer Inc.

Garth Mercer Treasurer Korea Food Trading/ Galleria Supermarket

Jim Bexis Director Sun Valley Supermarket Inc.

Barry Lanteigne Director A. Lococo Wholesale Ltd.

Michael Pugliese Director Michael-Angelo’s Market Place Inc.

Debra Ramage Director Drayton Food Market (2011) Ltd.

Rina Virgilio Director Concord Food Centre Inc.

Mike Williamson Director Central Meat Market Ltd.

CONTINUED ON PAGE 43 >

grocerybusiness.ca

September | October 2014

41

DISTRIBUTIONCANADA33YEARSOFCOLLABORATION

“Chapman’s Ice Cream has always been able to count on the enthusiastic support of Distribution Canada Inc. Year after year, the DCI Canada merchants have been first to market in supporting Chapman’s innovations with tremendous merchandising and display support. Having DCI Canada Inc. in its corner has been a significant advantage in building the Chapman’s brand over its 40 years.”

— Penny Chapman, president, Chapman’s Ice Cream

DCI president and CEO Brian Parker examines the products of longtime vendor Chapman’s Ice Cream.

CONTINUED FROM PAGE 41

The organization has also negotiated preferred pricing for its members on a number of products and services that retailers typically buy for their business operations. These include various aspects of the business, such as store equipment and vehicle insurance, employee health benefits, and automotive fuel.

“DCI plays a very important role for independent grocers,” says Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, which works closely with the group to advance the interests of smaller retailers.

“It gives independents buying clout, and provides access for members to share in opportunities usually available only to larger organizations.”

But retail members aren't the only ones who gain from affiliation with DCI. Manufacturers who forge cooperative trade agreements with DCI also come out ahead, says Parker.

“With DCI, vendors are able to become a vendor of record, which amps up the partnership aspect of the relationship,” he says. “The advantage for them is that

we disseminate their information to our members while supporting their products and promotions.”

Given the agility and ability of independent grocers, that translates to significant benefits for vendors.

“We can turn on a dime,” says Johns at Vince’s Market. “We’re small but we’re also agile, so we can quickly react to market trends. For example, if the cost of pineapple begins to drop, we can go back and pass that benefit to consumers within hours, whereas a larger retailer may have to go through several CONTINUED ON PAGE 44 >

The soft, fluffy, stick-to-the-roofof-your-mouth, original recipe.

®/TM

Used under license by Weston Bakeries Limited © 2014

Proud partners of

DISTRIBUTIONCANADA33YEARSOFCOLLABORATION

DCI BY THE NUMBERS

33

years

DCI has been in operation

80

+

Total DCI shareholders, representing thousands of retailers across Canada

$1,500

The cost of one share in DCI

5

$

million

Minimum sales volume per member

44

September | October 2014

Vince's Market, Aurora, Ontario: Deli Department

CONTINUED FROM PAGE 43

channels, which can take several days.”

This ability to react quickly means vendors can count on prompt execution of promotional or merchandising requests.

Vendors can also look to DCI for support with payment disputes and other issues with member retailers.

“We would help them with conflict resolution and ensure they get paid according to our agreements,” says Parker.

“When you’re dealing with DCI members, you’re dealing with owners,” says Kudrinko.

“You’re dealing with me, and when I say I want something to happen, it happens right away, whether it’s doing an ad, putting together a seasonal program or just getting your products on the shelf.”

Whether you’re a retailer or vendor, being part of the DCI network provides a sense of community, says Johns. For small grocers, it’s a way to succeed as an independent while

enjoying a strong business relationship with like-minded colleagues.

Just as they often go out of their way to help customers in their stores, most independents go the extra mile for their vendors. They’ll often come up with creative ways to display products or to increase response to a contest or promotion.

“And we have passion,” says Parker. “This is our livelihood, and our stores are our connection to the community.”

Cavin points to another DCI advantage for vendors: independents have always supported national brands. When they deal with DCI members, manufacturers don’t have the issue of competing with private-label products.

“The future is very bright for independents,” says Parker. “We can compete with the best retailers out there, and more than compete; we can excel.”

DISTRIBUTIONCANADA33YEARSOFCOLLABORATION

“DCI provides an opportunity to partner with many of the leading independent grocery retailers across Canada. The members deeply understand their local markets, operate stores that are innovative, and have differentiated themselves to succeed in this highly competitive industry.

Brian Parker and team are as passionate about the members as the members are about their respective operations. Canada Bread has had the privilege to be part of DCI and to work closely with Brian and our valued retail partners on innovative programs to drive profitable incremental growth.”

DCI represents a unified group of thousands of stores that helps our shareholders/ members sell more product and gives vendors the ability to cohesively execute programs. To see how you can benefit, call: Brian Parker President & CEO brianparker@ distributioncanada.ca 905-681-3933 Your Partners in Selling

— Todd Newstead, senior director, Customer Business Team, East, Canada Bread

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The 60th Summer Fancy Food Show featured 1,700 exhibitors and 22,000 attendees from around the world.

The business of buying and selling created a strong buzz, and as Ann Daw, president of the Specialty Food Association, noted, “there was optimism in every aisle.”

grocerybusiness.ca

September | October 2014

47

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RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2014 •

8.875 8.875

YOGOURT IS THE HEALTHY RECIPE INGREDIENT

THE POWER OF UNIQUE FLAVOURS

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

Over the years, yogourt consumers have classically had an affinity for fruit flavours paired with their

C

anadian consumers are still flocking to the yogourt aisle, looking for healthy, all-

yogourt. But the category is seeing a new trend towards unique dessert-inspired flavours such as

natural products that can be consumed at every meal. Yogourt is expanding beyond

Lime, Caramel, Cappuccino, Lemon and Coconut.

healthy breakfast and lunch choices, and is becoming a healthy ingredient alternative in

With health interests continuing to top the consumer

recipes, often replacing mayonnaise and sour cream.

priority list, the shift towards a healthy dessert option is growing.

L52W Nielsen G/D/M PE June 26, 2014

This new flavour trend is inspired by the classic flavours of popular ice creams, and allows the

MARKET FACTS Consumption in the yogourt category continues to rise, and is now valued at $1.3 billion. Yogourt in tubs continues to be the largest segment of the yogourt category, making up 85% of the total $ sales.

Within the tubs segment, Weight Management and Functional products make up over 46% of the total tubs $ sales but continue to lose share to the Greek and All Natural segments. The Greek and All Natural segments continue to grow as consumers look for products with high protein, and no additives and preservatives.

The drinkable yogourt segment, which is the second largest segment in the category, accounts for over 10% of dollar sales.

The yogourt consumer continues to be a valuable one, with a basket size of $93.80.

STRATEGIC LEADERSHIP • 2014

YOGOURT CONSUMER

$89.80

$93.80

consumer to enjoy healthy, high-protein and allnatural options. These exciting new flavours now

$15.70

represent over 16% of the total All Natural/Greek segment and continue to outpace the overall category growth at +45%.

Adding these unique flavours to the shelf-set will

Household Penetration

Basket Size

lain yogourt is an essential ingredient in the P kitchen, and has become a staple in many recipes — not only in classic recipes that call for yogourt, but increasingly as a healthy alternative to higher-fat ingredients. As consumers look for ways to create more healthy options for their families, there is a rise in plain yogourt as an alternative to sour cream, mayonnaise, and as a base for dips and marinades.

T he diversity of fat levels available in the yogourt aisle makes cooking with yogourt ideal. Each different fat level impacts the tanginess, consistency and richness of the recipes it is added to. And successful recipes rely on the right yogourt to make them look and taste great. This consumer is increasingly looking to online sources for answers to their recipe questions.

51% of this group shop for ingredients within 48 hours of finding recipes online

contribute to the category growth by providing

Trips

consumers with the flavour options they are looking

For recipe ideas, visit www.astro.ca

*Source: Allrecipes Global Kitchen Trends Consumer Research, 2013

for to indulge their dessert needs.

TOTAL ADULT YOGOURT IN TUBS Total Functional Adult Yogourt 26.6% (-2%) $292,977,000

Total Weight Management Adult Yogourt 22.3% (-5%) $245,466,000

YOGOURT IN TUBS BY SEGMENT Total Greek/ All Natural

Total Greek Adult Yogourt 28% (21%) $309,066,000

Total Taste Adult Yogourt 10.4% (0%) $114,942,000 Total Natural Adult Yogourt 12.7% (0%) $140,465,000

Plain

Unique Flavours

$394,234,000

(+12%)

$102,406,000 (+17%)

$75,873,000

(+45%) STRATEGIC LEADERSHIP • 2014

8.875 8.875

YOGOURT IS THE HEALTHY RECIPE INGREDIENT

THE POWER OF UNIQUE FLAVOURS

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

Over the years, yogourt consumers have classically had an affinity for fruit flavours paired with their

C

anadian consumers are still flocking to the yogourt aisle, looking for healthy, all-

yogourt. But the category is seeing a new trend towards unique dessert-inspired flavours such as

natural products that can be consumed at every meal. Yogourt is expanding beyond

Lime, Caramel, Cappuccino, Lemon and Coconut.

healthy breakfast and lunch choices, and is becoming a healthy ingredient alternative in

With health interests continuing to top the consumer

recipes, often replacing mayonnaise and sour cream.

priority list, the shift towards a healthy dessert option is growing.

L52W Nielsen G/D/M PE June 26, 2014

This new flavour trend is inspired by the classic flavours of popular ice creams, and allows the

MARKET FACTS Consumption in the yogourt category continues to rise, and is now valued at $1.3 billion. Yogourt in tubs continues to be the largest segment of the yogourt category, making up 85% of the total $ sales.

Within the tubs segment, Weight Management and Functional products make up over 46% of the total tubs $ sales but continue to lose share to the Greek and All Natural segments. The Greek and All Natural segments continue to grow as consumers look for products with high protein, and no additives and preservatives.

The drinkable yogourt segment, which is the second largest segment in the category, accounts for over 10% of dollar sales.

The yogourt consumer continues to be a valuable one, with a basket size of $93.80.

STRATEGIC LEADERSHIP • 2014

YOGOURT CONSUMER

$89.80

$93.80

consumer to enjoy healthy, high-protein and allnatural options. These exciting new flavours now

$15.70

represent over 16% of the total All Natural/Greek segment and continue to outpace the overall category growth at +45%.

Adding these unique flavours to the shelf-set will

Household Penetration

Basket Size

lain yogourt is an essential ingredient in the P kitchen, and has become a staple in many recipes — not only in classic recipes that call for yogourt, but increasingly as a healthy alternative to higher-fat ingredients. As consumers look for ways to create more healthy options for their families, there is a rise in plain yogourt as an alternative to sour cream, mayonnaise, and as a base for dips and marinades.

T he diversity of fat levels available in the yogourt aisle makes cooking with yogourt ideal. Each different fat level impacts the tanginess, consistency and richness of the recipes it is added to. And successful recipes rely on the right yogourt to make them look and taste great. This consumer is increasingly looking to online sources for answers to their recipe questions.

51% of this group shop for ingredients within 48 hours of finding recipes online

contribute to the category growth by providing

Trips

consumers with the flavour options they are looking

For recipe ideas, visit www.astro.ca

*Source: Allrecipes Global Kitchen Trends Consumer Research, 2013

for to indulge their dessert needs.

TOTAL ADULT YOGOURT IN TUBS Total Functional Adult Yogourt 26.6% (-2%) $292,977,000

Total Weight Management Adult Yogourt 22.3% (-5%) $245,466,000

YOGOURT IN TUBS BY SEGMENT Total Greek/ All Natural

Total Greek Adult Yogourt 28% (21%) $309,066,000

Total Taste Adult Yogourt 10.4% (0%) $114,942,000 Total Natural Adult Yogourt 12.7% (0%) $140,465,000

Plain

Unique Flavours

$394,234,000

(+12%)

$102,406,000 (+17%)

$75,873,000

(+45%) STRATEGIC LEADERSHIP • 2014

8.875 8.875

YOGOURT IS THE HEALTHY RECIPE INGREDIENT

THE POWER OF UNIQUE FLAVOURS

STRATEGIC LEADERSHIP – CATEGORY SNAPSHOT

Over the years, yogourt consumers have classically had an affinity for fruit flavours paired with their

C

anadian consumers are still flocking to the yogourt aisle, looking for healthy, all-

yogourt. But the category is seeing a new trend towards unique dessert-inspired flavours such as

natural products that can be consumed at every meal. Yogourt is expanding beyond

Lime, Caramel, Cappuccino, Lemon and Coconut.

healthy breakfast and lunch choices, and is becoming a healthy ingredient alternative in

With health interests continuing to top the consumer

recipes, often replacing mayonnaise and sour cream.

priority list, the shift towards a healthy dessert option is growing.

L52W Nielsen G/D/M PE June 26, 2014

This new flavour trend is inspired by the classic flavours of popular ice creams, and allows the

MARKET FACTS Consumption in the yogourt category continues to rise, and is now valued at $1.3 billion. Yogourt in tubs continues to be the largest segment of the yogourt category, making up 85% of the total $ sales.

Within the tubs segment, Weight Management and Functional products make up over 46% of the total tubs $ sales but continue to lose share to the Greek and All Natural segments. The Greek and All Natural segments continue to grow as consumers look for products with high protein, and no additives and preservatives.

The drinkable yogourt segment, which is the second largest segment in the category, accounts for over 10% of dollar sales.

The yogourt consumer continues to be a valuable one, with a basket size of $93.80.

STRATEGIC LEADERSHIP • 2014

YOGOURT CONSUMER

$89.80

$93.80

consumer to enjoy healthy, high-protein and allnatural options. These exciting new flavours now

$15.70

represent over 16% of the total All Natural/Greek segment and continue to outpace the overall category growth at +45%.

Adding these unique flavours to the shelf-set will

Household Penetration

Basket Size

lain yogourt is an essential ingredient in the P kitchen, and has become a staple in many recipes — not only in classic recipes that call for yogourt, but increasingly as a healthy alternative to higher-fat ingredients. As consumers look for ways to create more healthy options for their families, there is a rise in plain yogourt as an alternative to sour cream, mayonnaise, and as a base for dips and marinades.

T he diversity of fat levels available in the yogourt aisle makes cooking with yogourt ideal. Each different fat level impacts the tanginess, consistency and richness of the recipes it is added to. And successful recipes rely on the right yogourt to make them look and taste great. This consumer is increasingly looking to online sources for answers to their recipe questions.

51% of this group shop for ingredients within 48 hours of finding recipes online

contribute to the category growth by providing

Trips

consumers with the flavour options they are looking

For recipe ideas, visit www.astro.ca

*Source: Allrecipes Global Kitchen Trends Consumer Research, 2013

for to indulge their dessert needs.

TOTAL ADULT YOGOURT IN TUBS Total Functional Adult Yogourt 26.6% (-2%) $292,977,000

Total Weight Management Adult Yogourt 22.3% (-5%) $245,466,000

YOGOURT IN TUBS BY SEGMENT Total Greek/ All Natural

Total Greek Adult Yogourt 28% (21%) $309,066,000

Total Taste Adult Yogourt 10.4% (0%) $114,942,000 Total Natural Adult Yogourt 12.7% (0%) $140,465,000

Plain

Unique Flavours

$394,234,000

(+12%)

$102,406,000 (+17%)

$75,873,000

(+45%) STRATEGIC LEADERSHIP • 2014

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2014 •

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERSH STRATEGIC LEADERSHIP YOGOURT 2014 •

Taste of the UK British food and drink represent an opportunity for grocery retailers to capture not only the hearts of British expats yearning for the familiar flavours of home, but Canadians of all backgrounds who appreciate their uniqueness and quality.

Q&A

with Hannah Perrin-Haynes Hannah Perrin-Haynes is Vice-President of Scottish Development International (SDI) Canada, the Scottish Government’s Trade and Investment agency, based at the British Consulate-General in Toronto. She represents the Scottish Government in Canada, and believes now is the time for the Canadian grocery sector to take advantage of Scotland’s premium grocery offering.

Tell us about the food and drink industry in Scotland.

The food and drink industry today is Scotland’s fastest-growing export sector – up from £3.7bn in 2007 to £5.3bn in 2012, and the industry has set an ambitious target of reaching £7.1bn by 2017. Few countries can boast such a range of quality, premium products with strong provenance credentials, where famous global brands sit side by side with family-run specialty firms. grocerybusiness.ca

What are Scotland’s strengths?

One of Scotland’s major strengths is the combination of quality raw materials, an established culture of wholesome food production and a reputation for research and innovation.

Scotland boasts a naturally healthy larder – for example, berries from Tayside and Grampian, oats from eastern Scotland, and oil-rich fish from the north east. This means that some of our most traditional products,

oatcakes for example, are in prime position to respond to the growing consumer demand for health-enhancing foods through their natural health benefits and by developing specific varieties, such as gluten-free.

Why should Canadians be interested in Scottish products?

When you think of Scotland, you think of beautiful unspoiled landscapes, clean air and pure water. Scotland is home to one of the largest and most diverse food and drink industries in Europe, and we could well have the product that you are looking for.

There are strong cultural ties between Scotland and Canada, and many common interests, including a taste for great Scottish products!

There are many fascinating stories to be told about Scottish grocery products, the places they come from, and the people who make them.

To find out more, e-mail Hannah.PerrinHaynes@scotent.co.uk; call 416 408 1024; or visit www.sdi.co.uk.

September | October 2014

57

THE GREAT TASTES OF THE

Brought to you by

www.treeoflife.ca Toronto: 1-800-263-7054 • Montreal: 1-800-363-2606 • Calgary: 1-800-665-1298 • Vancouver: 1-800-661-9655

Wonderful Welsh Lamb Lamb from the pristine Highlands of Wales is proving to be popular with Canadian consumers, particularly those of European descent who recognize its distinctive flavour.

Since 2010, Welsh Lamb has been sold in many independent grocery stores, as well as one of the major chains, says Pearse Dolan, Owner and President of Toronto-based Dolan Foods, the distributor.

“Our customers really appreciate it because it has a different flavour profile compared to the traditional North American and Australian brands,” he explains. “They feel there’s a crisper, cleaner, fresher flavour versus the other brands.” Chalk it up to the lush green pastures, the temperate climate, the mineral-rich soil, and the unspoiled environment in which the lambs are raised.

The European Commission has awarded Welsh Lamb the coveted status of Protected Geographical Indication (PGI), which recognizes it as having unique regional characteristics.

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Only lambs born and reared in Wales, and fully traceable, can be marketed as Welsh Lamb.

Because it is a premium product, pricing is slightly higher, but still competitive, says Dolan. The distributor offers marketing and POS materials, as well as in-store demos, to help distinguish Welsh Lamb from its competitors.

While Ontario east to Newfoundland has been the primary market to date, Dolan says the company will focus further west over the next six months.

Taste of the UK

Spice it up Naturally Premium

Launched in Canada in 2013, John Crabbie’s Ginger Beer is a premium soft drink containing fruit and real ginger.

On tap in the New Year will be Speyside Glenlivet water, a premium natural mineral water from Scotland’s Highland Spring Group.

One of the lightest of mineral waters, Speyside Glenlivet is bottled on the protected land of the Crown Estate of Glenlivet to maintain its purity.

Cheers!

Get to know these exciting UK products.

Hot prospect Peanut Hottie is the world’s first peanut-butter-flavoured instant hot beverage; just spoon four teaspoons of the powder into a cup and add boiling water.

Peanut Hottie can also be sprinkled over cereal or yogurt.

In the mix Cool as a Qcumber

Fever-Tree is a line of premium mixers, made from natural and fresh ingredients, primarily for alcoholic drinks such as gins, vodkas and rums.

Walkers Scottie Dog Shortbread – The Purebred Shortbread Just in time for Christmas, Walkers Shortbread is introducing a White Scottie Dog Tin and a Cello Bag of Mini Scottie Dog Shortbreads. The tin, filled with Scottie dog-shaped, pure butter shortbread, is the perfect holiday gift.

60

September | October 2014

New in Canada this year is Qcumber, a refreshing spring water flavoured with cucumber. It can be used as a drink on its own or as a mixer for alcoholic drinks.

Taste of the UK

Canadian Importers, Distributors & Suppliers Of British Food & Drink Products A G BROWN & SONS LTD

(Atlantic Canada only) Tel: 902 454 6407 Email: agbrown@agbrown.ca www.agbrown.ca Contact: Mr Jim Brown, Vice President Brand/Product Cross & Blackwell: Condiments BAXTERS CANADA INC.

Tel: 905 813 8678 Email: baxtersenquiries@baxters.com www.baxters.com Contact: Mr Ashley Kanary, VP Sales Brand/Product Baxters: Canned soup BEDESSEE IMPORTS LTD

Tel: 416 292 2400 Email: rayman@bedessee.com invor@bedessee.com www.bedessee.com Contacts: Mr Rayman Bedessee, General Mgr Mr Invor Bedessee, Sales Brand/Product Andrews: salts Bells & Sons: Castor, eucalyptus and almond oil Hacks: Flavoured sweets Horlicks: Ovaltine malted drink mixes Lifebuoy: Soap Liquifruta: Cough syrup Lucozade: Energy drink Reckitts Crown: Laundry Blue Square Seven Seas: Cod liver oil Tunnocks: Caramel wafer biscuits Vimto: Soft drinks Woodwards: Gripe mixture C B POWELL LTD

Tel: 905 625 4000 Email: cglaysher@cbpowell.com www.cbpowell.com Contact: Mr Colin Glaysher, Executive VP Brand/Product Tate & Lyle: Syrups Mamade: Marmalade concentrate Typhoo Tea: Teas (London Fruit & Herb Teas, Typhoo, and Ridgway Organic Tea) DOLAN FOODS INC

Tel: 416 207 8813 Email: pdolan@dolanfoods.com www.dolanfoods.com Contact: Mr Pearse Dolan, Import Manager Brand/Product Welsh Lamb DOVE TALE COLLECTIONS

Tel: 1 877 746 6698 Email: susan@dovetalecollections.com www.dovetalecollections.com Contact: Ms Susan Jacobson, President Brand/Product Artisan Bakers: Cheese crackers and biscuits Artisan Grains: Grains grocerybusiness.ca

Barts: Spices Cawston Press: Apple juices Chocolate In Love: Chocolate bars Duchy Originals: Biscuits, preserves, condiments and tea Fine Cheese Company: Crackers and condiments for cheese Grown Up Chocolate: Chocolate Kirremuir: Gingerbread London Tea: Teas Mackays: Preserves and condiments Mrs Bridges: Preserves and condiments Makers and Merchants: Preserves, condiments, oils, vinegar, confectionery, biscuits Newby Tea: Teas Opie: Pickles and condiments Prestat: Chocolate Rude Health: Cereals Salty Dog: Darling spuds crisps Shortbread House of Edinburgh: Shortbread Summerdown: Chocolate and tea Sussex Valley: Sauces and mayonnaise The Fresh Olive Company: Belazu Olives, olive oil, vinegar and tapenades Whittards: Tea EAT REAL SNACK FOOD CANADA LTD

Tel: 604 595 1596 E: info@eatrealltd.com W: www.cofresh.co.uk Contact: Mr Manny Singh

Brand/Product Healthy Snacks: Quinoa chips, Quinoa & Kale Puffs, Lentil Chips, Hummus Chips, Potato Snacks, Health Bars, Ethnic Snacks ELCO FINE FOODS INC

Tel: 905 474-2400 Email: info@elcofinefoods.com www.elcofinefoods.com Brand/Product John West: Canned fish ELITE SWEETS

Tel: 905.790.9428 Email: info@elitesweets.ca www.elitesweets.ca Brand/Product Cadbury: Cakes FAR-MET IMPORTERS LTD

Tel: 604 876 2241 Email: info@far-met.com Web: www.far-met.com Contacts: Mr Yves Farges, President Ms Jodi McKinnon, Nat Sales Mgr. Brand/Product Anglessey Sea Salt Company: Halen Mon sea salt Maldon Crystal Salt: Maldon and Tidman salts & pepper The Wiltshire Tracklement: Chutney, jelly, horseradish Bennett Opie Ltd: Opies sauces FENTIMANS NORTH AMERICA – HQ

T: 1 877 326 3248 E: info@drinkfentimans.com W: www.deinkfentimans.com

Brand/Product Fentimans: Ginger Beer, Lemonade, Cola, Shandy FINICA FOOD SPECIALTIES LIMITED

T: 905 696 2770 Email: geninfo@finica.on.ca www.finica.com

G J SHORTALL LTD

Tel: 709 747 0655 / 1 800 499 5722 Email: shortalls@bellaliant.com Contacts: Stephen Shortall, Managing Dir. Chris Shortall Brand/Product Kempwrights: Cream crackers Thomas Tunnocks: Caramel logs, caramel wafers, tea cakes, snowballs GLEN ECHO FINE FOODS

Tel: 416 255 5573 Email: Robert@glenechofinefoods.com www.glenechofinefoods.com Contacts: Robert Santen, Partner Daniel Kimura, Partner Brand/Product Inverloch Dairy: Inverloch cheese, Drumloch, Gigha fruit cheese Singleton’s Dairy: Cheese HUSKY FOOD IMPORTERS & DISTRIBUTORS LTD

Tel: 905 850 8288 Email: nmattiace@huskyfoods.com www.huskyfoods.com Contact: Mr Nick Mattiace, Director of Key Accounts Brand/Product Butler’s: Chocolate Deans: Shortbread Haribo: Gummies Mrs Tilley’s: Fudge Taylors of Harrogate: Yorkshire tea HQ

Tel: 450 687 2680 Email: info@idfoods.com www.idfoods.com

I D FOODS CORPORATION CENTRAL DIVISION

Tel: 416 679 0833

I D FOODS CORPORATION WESTERN DIVISION

Tel: 604 942 6022

Brand/Product Crosse & Blackwell: Gourmet sauces and chutneys Camp Coffee: Coffee and chicory essence Wilkin & Sons Ltd: ‘Tiptree’ preserves Colman’s: Mustard JAN K OVERWEEL LTD.

Tel: 604 464 4744 Toll free: 1 800 595 4744 Email: kanderson@jkoverweel.com Contact: Mr Kevin Anderson

JAN K OVERWEEL LTD. EASTERN DIVISION

Brand/Product Snowdonia: Cheese Collier’s: Powerful Welsh Cheddar

I D FOODS CORPORATION

JAN K OVERWEEL LTD. WESTERN DIVISION

HQ

Tel: 905 850 9010 Email: ppelliccione@jkoverweel.com www.jkoverweel.com Contact: Mr Pat Pelliccione

Tel: 450 665 1055 Toll Free: 1 888 494 9021 Email: ftrimarco@jkoverweel.com Contact: Mr Frank Trimarco

Brand/Product Oak Manor English Cheese: Range includes Blue Stilton, Shropshire Blue, Vintage Organic Cheddar, Double Gloucester, Red Leicester, Cheshire, Lancashire, Wensleydale, Double Gloucester Onions & Chives, Cheddar & Balsamic Onion, Wensleydale & Cranberries, White Stilton with Apricots/Cranberries/Mango & Ginger, Redwood, Bollywood, Cosmopolitan JESSE TREE FINE FOODS

Tel: 905 951 2124 Email: info@jessetreefinefoods.com http://jessetreefinefoods.myshopify.com/ Contact: Mr Jesse Pagliaroli Brand/Product Gnaw: Chocolate MASO IMPORTING

Tel: 416 661 5629 Email: Margaret@masoimporting.com www.masoimporting.com Contact: Ms Margaret Bodzeta Brand/Product Firefly: Tonics NATIONAL IMPORTERS CANADA LTD.

Tel: 604 324 1551 Tel: 1 888 894 6464 www.nationalimporters.com

Brand/Product Patak’s: Indian Curry Sauces, pastes and chutneys Tilda: Basmati rice PREMIER BRANDS CANADA LTD.

Tel: 416 750 8807 Email: brianh@premierbrands.net Contact: Mr Brian Hicks, Managing Director Brand/Product Ashbury Confectionery: Waterbridge Occasions – chocolate toffee assortments Burton’s Biscuits: Cadbury chocolate cookies / Royal Edinburgh shortbread / Burton’s biscuits Tangerine: Waterbridge gums/jellies / Waterbridge Liquorice Allsorts Country confectionery: Waterbridge All Gold Toffees and Fudges Glisten Confectionery: Waterbridge panned chocolate items Golden Casket: Private label sugar confectionery Elizabeth Shaw: Chocolates liqueurs Famous Names: Chocolates

September | October 2014

61

The best of Great British Dairy

Hand Rolled.

Thick Cut. Sugar Edged.

www.treeoflife.ca www.walkerscanada.com

www.coombecastle.com

www.treeoflife.ca

Toronto: 1-800-263-7054 • Montreal: 1-800-363-2606 Calgary: 1-800-665-1298 • Vancouver: 1-800-661-9655

QUALIFIRST FOODS LTD.

Tel: 416 244 1177 Toll free: 1 800 206 1177 Email: info@qualifirst.com www.qualifirst.com Contact: Mr Yves Farges, President Ms Jodi McKinnon, Nat Sales Mgr. Brand/Product Anglessey Sea Salt: Halen Mon sea salt Maldon Crystal Salt: Maldon and Tidman salts & pepper The Wiltshire Tracklement: Chutney, jelly, horseradish Bennett Opie: Opies sauces SCOTT-BATHGATE LTD

CENTRAL DIVISION

SCOTT BATHGATE LTD

WESTERN DIVISION

Tel: 204 943 8525 Email: sales@scottbathgate.com www.scottbathgate.com Contact: Mr J C Burt Tel: 604 946 8684 Contacts: Mr Angus MacDowell Ms Carrie Duffield Ms Lynn Morin Ms Brandie Baker Brand/Product A L Simkins: Assorted travel candies Churchills: Confectionery Walkers: Toffee Burtons Biscuits: Biscuits T MCCONNELL SALES AND MARKETING LTD

Tel: 905 771 7300 Email: tmc@tmccsales.com Contact: Mr Graham McConnell, President Mr Andy Wallace, Imports Brand/Product Fox’s Biscuits: Private label “President’s Choice” (Loblaw)

TFB & ASSOCIATES LTD

HQ

Tel: 905 940 0889 Email: briddell@tfb.ca www.tfb.ca Contact: Mr Bob Riddell, President Brand/Product Aarhus Karlshamn UK Ltd: International Collection olive oils and English mustard A.G. Barr: IRN-BRU soft drinks Belvoir Fruit Farms: Flavoured waters & cordials Campbell’s: Shortbread Coles: Christmas pudding and sauces Cornish Sea Salt: Plain & flavoured sea salts Dorset Cereals: Cereals and muesli Fever Tree Premium Mixers: Tonic water, ginger beer, ginger ale, soda water, bitter lemon Gardiners of Scotland: Gardiners fudge & toffees International Fish: Rob Roy sardines and mackerel Kerry Foods: Greens Yorkshire pudding mix Kerry Foods: Pearce Duffs custard mix Lofthouse of Fleetwood: Fishermen’s Friend medicate lozenges Matthew Walker: Christmas puddings Nairn’s Oatcakes: Oat crackers and biscuits Northern Labs: Goddards waxes and polishes (cleaning products) Premier Foods: Homepride and Batchelors sauces and dry peas Qcumber: Sparkling water Renshaw Napier: Scott’s jams, preserves and whisky marmalades Simpkins: Confectionery Stahly Foods: Canned haggis Thornton’s: Toffee and chocolates Distribute Only John Crabbie’s: Ginger Beer TREE OF LIFE CANADA, A KEHE COMPANY

Tel: 905 361 9429 Toll free: 1 800 263 7054 Email: Helen.pike@treeoflife.com www.treeoflife.ca Contact: Ms Helen Pike, VP Marketing

Brand/Product Abergavenny: Cheese Ambrosia: Custards & puddings Barbers: heese Bottle Green: Drinks Cahills: Cheese Coombe Castle: Cheeses and cream Eat Naked: Nutritious snack bars Ford Farms: Cheese Green & Blacks: Chocolates Ilchester: Cheese Irish Dairy Board: Cheese Long Clawson: Cheese Orkney Cheese: Cheese Robertsons: Preserves Ryvita: Crispbread Sharwoods: Marinades, sauces, chutneys Tyrrell’s: Crisps United Biscuits: Carr’s crackers & McVities biscuits W. Jordan: Cereals Walkers: Shortbread Wexford: Cheese

grocerybusiness.ca

which they are sold. The reason for these differences in regulatory standards is often quite complicated and based a number of factors, both historical and contemporary.

The end result for retailers is ensuring the compliance of your product by sourcing from importers not operating in the grey market. As the incidents earlier this year demonstrated, the enforcement costs after the fact can have major repercussions on your business. For some, this has included the seizure of products that were found to be in non-conformity with Canadian rules.

Marmite: Condiment Nairns: Oat cakes Oak Manor: Cheese Scott’s: Jams Thornton’s: Confectionery Typhoo: Tea Source: UK Trade & Investment. Whereas every effort has been made to ensure that the information provided is accurate, UK Trade & Investment accepts no responsibility for any errors, omissions or misleading statements in that information, and no warranty is given or responsibility is accepted as to the standing of any firm, company or individual mentioned. Further information from: isabell.french@mobile.ukti.gov.uk

TWININGS NORTH AMERICA

Tel: 647 376 5514 Email: henry.evans@twinings.ca Contact: Henry Evans, Director Sales and Marketing Canada WORLDWIDE SPECIALTY FOODS LTD

Tel: 403 255 6262 Email: tjames@worldwidespecfoods.com Contact: Mr Tony James Brand/Product Ambrosia: Custard, rice pudding Barrs: Soft drinks IRN BRU Belvoir: Flavoured waters & cordials United Biscuits/Carr’s: Crackers McVities: Biscuits Dorset: Cereal Duncan’s: Biscuits Fentiman’s: Beverages Fever Tree: Drinks Inverloch: Cheese

Grey market products: it’s black and white Over the last several months, there has been increased interest in the availability of well-known British food and drink products, such as IRNBRU, Marmite and Ovaltine, on store shelves in Canada. The genesis for this interest, as many will already be aware, was the Canadian Food Inspection Agency enforcing regulations that require a product’s additives to conform to Canada’s Food and Drug Regulations.

As that incident demonstrated, not all products of the same brand are created equally with identical formulations, but are instead tailored for the individual markets in

Taste of the UK

Fortunately for those who enjoy these household British products, there are indeed distributors out there who carry the Canadianapproved versions of these items.

If you are unsure about a particular source, the list of Canadian importers/distributors in this supplement is a useful tool, or contact UK Trade & Investment in Toronto (Valerie.strand@mobile.ukti. gov.uk or isabell.french@ mobile.ukti.gov.uk) for further information.

CFIA statement on rejected shipment of products from the UK Early this year, the Canadian Food Inspection Agency (CFIA) issued a statement on grey market products that said in part: “IRN-BRU and Marmite are not banned for sale in Canada.

These products have been available on Canadian store shelves for more than a decade, and will continue to be sold in stores across Canada.

“Recently, a shipment containing a number of products imported from the UK was detained in the course of rear border activities because it contained meat products that were not accompanied by the required documentation.

“Imported products, including IRN-BRU and Marmite, that meet Canadian requirements under Canada’s Food and Drug Regulations are and will continue to be available for sale in Canada.

“The CFIA will continue to work with the food seller to ensure they are accessing the correct products, destined for Canadian markets.”

September | October 2014

63

Great British Brands from TFB & Associates Limited

Your source for the finest imported foods Tel: (905) 940-0889 | Fax: (905) 940-0913 | Email: customer.service@tfb.ca | tfb.ca

Independents’ Day

SWIPE FEES COST EVERYONE CFIG is working with other trade associations to advocate for a process that will bring fairness and transparency to the setting of card swipe fees.

Tom Barlow, CEO and president Canadian Federation of Independent Grocers

By Tom Barlow

As our members at the Canadian Federation of Independent Grocers (CFIG) are well aware, over the last few years, the issue of trying to change the payments landscape has been a cornerstone of our advocacy efforts to government.

It’s not just that a typical single-store grocer can pay $200,000 or more a year in credit card fees. With Visa, MasterCard and American Express controlling more than 90 per cent of credit transactions today, this leaves grocers in a very vulnerable position.

The issue of high credit card swipe fees among those high-end premium cards continues to erode the bottom line of retailers across the country. Canada’s card swipe fees are among the highest in the world. Credit card swipe fees charged to Canadian retailers range from 1.5 to 4 per cent of a purchase.

These fees have represented upwards of $7 billion in revenue for the credit card companies annually, while many small business retailers are barely surviving with razor-thin margins.

Controlling the fees isn’t a pipe dream, as several other countries have reacted to this issue. For example, Australia and most of the grocerybusiness.ca

European Union have imposed controls on credit card fees.

This is the main reason why CFIG has been leading a small business coalition to reduce those credit card fees. If we can reduce the fees, it will mean thousands of dollars in savings annually. Moreover, CFIG is pushing for more transparency on existing fees, as well as engagement with fee increases.

A few months ago, CFIG helped lead the formation of a coalition composed of associations representing small- and mediumsized businesses. Collectively, the Small Business Matters Coalition now represents more than 90,000 businesses in Canada. This Coalition has been meeting with the government and has strongly advocated for reduced fees, as well as a process of controlling how fees are set.

Recently, the Coalition unanimously endorsed a Pledge to Consumers, which is designed to demonstrate that reducing fees helps consumers as much as retailers. We hope that by adopting this pledge, it will further encourage the government to reduce swipe fees.

The pledge, which was supported by CFIG’s board of directors, reads as follows: “Members of the Small Business Matters Coalition, representing thousands of businesses across Canada, urge the Government of Canada to reduce credit card swipe fees and to bring fairness and transparency to the Canadian Payments Industry. In turn, our members pledge that the reduction in credit card fees will be to the benefit of consumers and communities across Canada through improved competitiveness, increased investment, job creation and reduced consumer prices.”

Excessive credit card swipe fees not only impact small business retailers by constraining them from investing in their businesses or hiring more employees, but also result in higher prices for Canadian consumers, whether they use credit cards, cash or debit to make their purchases.

September | October 2014

65

Q&A

Lianne Tombol,

Hussmann’s Canadian General Sales Manager talks innovation and trends in store equipment

What is the purpose of Hussmann’s new “Global Hub”?

It is a collaboration and innovation centre for us to meet with food retailers to gain a better understanding of the issues they are facing, and work with them to develop the products, services and solutions that will help them succeed.

What new store technologies are being showcased at the “Global Hub”?

We demonstrate the innovations and technologies that have the most impact on food retailing. Currently, lighting is one of our feature areas – combining ambient, accent and in-case lighting to create an environment that will attract, guide and influence shoppers.

SPLASH is an innovative lighting technology that optimizes color and enhances product displays.

We also use the Hub for strategic conversations with retailers about industry trends, and how they will impact food retail stores in the future. As a sponsor of the Food Marketing Institute’s “Retail Experience of the Future” project, Hussmann played a role in identifying shopper behaviours that will determine the look and feel of traditional food stores over the next several years.

What are the main merchandising trends related to store equipment?

There are three important trends: LED lighting; doors on medium-temperature multi-decks for both new equipment and “upgrades” to existing display cases; and emphasis on fresh, perishable products. a) LED lighting not only uses less energy than fluorescent lights; it creates a dramatic visual appeal to attract shoppers, while delivering a more even light across the entire display. b) The conversation about French-style doors on mediumtemperature multi-deck cases initially concerned energy savings, but now we are talking about the merchandising benefits. Today, we are getting positive feedback from shoppers that the aisles are warmer, so they are lingering more in the dairy, packaged deli and beverage departments. They believe the product is colder and fresher, and easier to see. c) The emphasis on fresh, perishable products is being driven by increased demand for prepared foods, and the consumption of

more fresh foods generally. Our Q-Series vertical front glass merchandiser family surrounds the product display with a wall of glass. Our new Focal Point lighting is an adjustable, multidirectional LED canopy light that highlights product facings across interchangeable merchandising sets.

As energy prices continue to climb, how can grocers reduce their operational costs?

Energy efficiency is only part of the story when it comes to reducing operational costs. Over the last 10 years, refrigeration equipment has become very energy-efficient through solutions such as LEDs, fan motors, modular coils, microchannel condensers, and doors on medium-temperature merchandisers. But retailers can improve their operating performance by simple maintenance and cleaning procedures that will keep all their refrigeration equipment running at its peak.

Hussmann performs Retail Optimization Level II audits for food retailers; we come into an existing store and do an analysis of the entire store envelope. We also recommend an ongoing service and maintenance program with a qualified refrigeration contractor.

What are the main trends around grocery industry sustainability initiatives?

We are seeing more food retail chains implementing corporate sustainability goals for their entire organization. These include solutions built around energy reduction, lower GWP and other refrigerant alternatives, recycling programs, and food waste reduction, as well as programs to use environmentally friendly building products in their new stores. We are discussing many of these subjects with food retailers to better understand their objectives.

Lianne Tombol General Sales Manager Hussmann Canada For more information, call 1-519-653-9980

Independents’ Day | International

IT’S ABOUT THYME! Phoenix, Arizona

Fresh Thyme Farmers Market is a full-service specialty retailer designed to tap into a neighbourhood market vibe.

With a focus on fresh, healthy, natural and

natural meat department, seafood flown in daily,

organic offerings, Fresh Thyme Farmers

healthy deli foods to go, bakery goods, 400 bulk

Market is a new retail concept that combines

food bins, natural and organic groceries, as well

the spirit of a weekend farmers’ market with the

as dairy and frozen departments. The stores

convenience of a neighbourhood store. In fact,

offer gluten-free and dairy-free options, craft

Fresh Thyme has been described as a cross

beers and wines, and a natural living depart-

between Trader Joe’s and Whole Foods.

ment with an on-site nutritionist.

Based in Phoenix, Ariz., Fresh Thyme was

Fresh Thyme stores don’t follow a traditional

founded by CEO Chris Sherrell, with backing

grocery store layout. For example, the extensive

from Michigan-based Meijer Companies. Fresh

fresh produce department is positioned near the

Thyme is on a fast growth curve that includes

centre of the store.

10 stores opened by the end of 2014 in Illinois,

The stores feature unique items such as milk

Indiana and Ohio, and with plans to open 13

can vessels repurposed into signage holders, as

more over the next two years, including in

well as a full array of cut metal farm icons set

Michigan, Minnesota, Missouri and Wisconsin.

atop in-aisle navigational street signs. At the

“Fresh Thyme plans to open 60 stores in the

checkout is a unique overhead canopy made

Midwest by 2019,” Sherrell says. About 20 of

from antique vintners’ buckets repurposed into

those stores will open in the Chicago area alone.

light fixtures.

Fresh Thyme offers an extensive selection of fresh-from-the-farm produce, much of it organic and often locally grown. The retailer also offers a

68

September | October 2014

fresh

facts

The look, designed by api(+) of Tampa, Fla., recreates a farmers’ market vibe with such finishes as corrugated metal panelling, roughsawn cedar planking, reclaimed barn siding and dismantled snow fence rescued along the Wyoming interstate highway system.

Branded messages and department offerings are printed directly onto these materials.

FOUNDED

2012

LOCATIONS

23 60

by 2016 grocerybusiness.ca

STORE SIZE

by 2019

24,000 -

28,000 sq. ft.

September | October 2014

69

Independents’ Day

National Grocers Association

Financial Survey Independent food retailers in the United States have shown their ability to adapt and grow as they deal with the ups and downs in the economy, consumer confidence and shopper spending. The 2013 edition of the Independent Grocers Financial Survey, conducted for the National Grocers Association and FMS Solutions*, covers the operational and financial performance of independent food retailers in the U.S. during fiscal 2012. While consumers remained firmly focused on value, independents managed their way to an average 1.65-per-cent jump in net profits (before taxes), as a result of higher same-store sales, tightly controlled expenses and better margins.

Annual Inventory Turns 18.0

16.1

16.4

Meat: 37.8 (+3.2%) turns Produce: 49.9 (+9.3%) turns

2011

2012

*FMS Solutions provides independent retail grocers and supermarkets with the financial information needed to make informed operational decisions.

70

$100k<

1.46% $100â&#x20AC;&#x201C;$200k

1.68% $200â&#x20AC;&#x201C;$300k

1.76% $300k>

Inventory Turns by Department

Dairy: 33.8 (+5.2%) turns

2010

1.65%

Dry grocery: 12.6 (+3%) turns

18.6

2009

% Net Profit

by Weekly Store Sales

September | October 2014

Total Store Gross Margin

26.48%

Independentsâ&#x20AC;&#x2122; Day

Annual Shrink Dry grocery: 1.1%

39.4%

Dairy: 1.8%

* (+12.5%)

Meat: 3.6%

Average turnover part-time

Produce: 5.2% Prepared Food: 6.9%

43%

Sales Distribution Across Departments

* (-2.2%)

Share of employees working full-time

5.15%

13.1% * (+9.17%)

Average turnover full-time

Miscellaneous

10.26%

57.5%

Total Produce

27.09%

Total Grocery

Total Meat

* Year-over-year

Historical Expenses (%)

SINGLE STORE

15

MULTIPLE STORES

12 9 6 3 0

grocerybusiness.ca

LABOUR/ BENEFITS

RENT

UTILITIES

SUPPLIES

ADVERTISING

REPAIR & MAINTENANCE

DEPRECIATION

INTEREST

September | October 2014

71

Independents’ Day

Responding

to a Union Drive Union certification can happen extremely quickly, have an extraordinary impact on a business and, if not addressed lawfully, create significant financial liability for a company.

Being unionized means a union has the right to represent employees regarding conditions of employment such as scheduling, wages, hours of work, termination and overtime. To better understand the implications of a union drive, I’ll use Ontario as an example of the rights and obligations of the employer.

It can be a mistake for an employer to refrain from exercising its rights of free speech because, while there may be some employees committed to a union, there are usually a number who are undecided. It is critical that employees hear management’s side of the story, and members of management should be trained to proactively and persuasively discuss the issue of unionization with employees.

The company has two business days to file its response to the application, including providing a list of employees in the relevant employee group and deciding what legal positions the company wishes to take on the issues raised in the application.

That said, employers must remember that whether to join a union is a decision to be made by employees, not their employer. The Labour Relations Act prohibits an employer from penalizing an employee because he or she supports being a member of a union. Where an employer has disciplined, terminated or laid off an employee related to his or her support for a union, the OLRB can reverse the employer’s decision. The OLRB can reinstate a terminated or laid-off employee and order payment of back wages. Further, if the OLRB finds the employer’s actions amounted to threats or intimidation, the Board can automatically unionize that employer, even where employees voted against the union.

The OLRB conducts a vote of the employee group five days after the application has been filed, and the outcome is decided by 51 per cent of the employees who vote. That means that if only 10 employees vote and six vote in favour of the union, the entire employee group is unionized.

Bottom line: Stakes are high. Establishing and maintaining positive employee relations is fundamentally important. So too is knowing your rights and obligations as an employer and working with labour counsel knowledgeable of and experienced with union organizing drives.

In Ontario, a union files an application with the Ontario Labour Relations Board (OLRB) asking to be certified to represent an identified group who are working for a particular employer. The union needs the support of only 40 per cent of employees to file the application.

Many employers, and even legal counsel, misunderstand what an employer is and is not permitted to say and do during a union campaign. A common misunderstanding is that an employer must remain neutral. In most Canadian jurisdictions, employers have a legislated right of free speech that entitles them to express a preference that there not be a union.

Employers can also point out benefits in the workplace that employees receive without the union, and they can educate employees about unionized companies that pay less than the union is promising them.

72

By Tom Gorsky

September | October 2014

Tom Gorsky is a lawyer with Sherrard Kuzz LLP. sherrardkuzz.com The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice.

Independents’ Day | International

Oak Brook, Illinois

THEY ACED IT A growing number of independent grocers in the U.S. are tapping into Ace Hardware as a new source of revenue.

By Sally Praskey

American independent grocers John Stokes and Jerrold Russell were looking for a competitive edge that would drive traffic to their stores when they discovered Ace Hardware Corporation’s offering for the grocery channel.

Ace, the industry’s largest hardware cooperative, has identified the retail grocery sector as an emerging opportunity for new business, and is recruiting retailers like Stokes and Russell to add hardware to their grocery offering. Curt DeHart, director of new business, Ace Hardware (domestic), explains that the company has three preferred formats for grocery retailers: » The Express model (3,000 sq.ft.); » The Convenience model (4,000 sq.ft.); » The Core model (6,000 sq.ft.).

Currently, there are 75 grocery/hardware stores – and counting – open in the U.S. “We are adding approximately 30 units per year,” says DeHart.

Stokes, a third-generation independent grocer and owner of Stokes Market in Salem, Utah, aligned with Ace in 2011 when he purchased what is now called Ace Hardware–Stokes Market. The hardware component fills 8,000 of the store’s total 42,000 sq.ft. The hardware margins have allowed Stokes to be more aggressively priced in the grocery categories, helping him to compete with local big-box grocery retailers. He reports that overall store revenue is up 10 per cent versus 2012.

Russell, who owns three Piggly Wiggly grocery stores near Birmingham, Ala., opened his first Ace Hardware alongside one of his grocery locations in December 2013. He says he is “consistently seeing 20-per-cent increases each week, grocerybusiness.ca

compared to the prior year. Grocery food sales are up more than 10 per cent, as well.” The concept has been so well received that Russell plans to add an Ace Hardware to a second Piggly Wiggly within the year.

“We’re already seeing excellent forward momentum among independent grocers and regional grocery chains, so much so that we are forecasting approximately 20 per cent of Ace’s growth in the coming years to result from the grocery channel,” says DeHart. “There are incredible synergies between Ace’s convenience hardware “ We are consistently seeing model and that of the 20-per-cent increases each independent grocer.” week, compared to the prior In the U.S., stores that sign up for the year,” says Jerold Russell. program become “Grocery food sales are up members of the Ace more than 10 per cent, cooperative, “much like as well.” a franchise but without royalties or franchise fees,” notes DeHart. Internationally, however, the company “works with a licensing model that offers market exclusivity of the Ace brand, a store development plan over an initial period, and the support resources necessary for a retailer’s business,” says Alberto Vidal, director international business development, Ace Hardware.

Although Ace has not worked with any grocers in Canada to date, it would welcome the prospect, says Vidal. “If the appropriate opportunity presented itself, we certainly would give it solid consideration.”

September | October 2014

73

New products you need to know about!

LIST IT

New Twinings Chai Latte K-Cup Packs Twiningsâ&#x20AC;&#x2122; new Chai Latte combines the finest black tea leaves, and the savoury spice flavours of cinnamon, cardamom, cloves and ginger, with nonfat milk and a touch of naturally-sourced sweetness for a warm, soothing aroma and an appealing spicy taste. twinings.ca

Peanut-free snacks; peanut butter taste Dare Foods introduces Dare Bear Paws Morning Snack Wowbutter and Strawberries, Bear Paws Minis Chocolate Chip & Wowbutter, and Wagon Wheels Wowbutter. These peanut-free snacks are baked in a nut-free/peanut-free facility and are made using Wowbutter, a toasted soy spread, to deliver a peanut butter taste. darefoods.com

74

September | October 2014

Stonefire debuts Naan Crisps Family-owned Stonefire Authentic Flatbreads presents a new take on snack food with the launch of Stonefire Naan Crisps. Prepared using authentic ingredients and flame-baked for a delicious crunch, Stonefire Naan Crisps are available in four flavours: Original, Everything, Garlic Parmesan and Tandoori Spice. stonefire.com

Aloha to jerky paradise Oberto Brands introduces its newest, high-protein, better-for-you snack: Hawaiian Style Pork Jerky, made exclusively with simple, natural ingredients and no preservatives or artificial flavours.

Oberto jerky is available through Old Dutch Foods. oberto.com

SpongeTowels is getting a sexy new look!

SpongeTowels Ultra is a premium paper towel with Sponge Pockets technology that delivers ultra-absorbency. Our best combination of absorbency and strength, SpongeTowels Ultra works twice as hard with double-sided Sponge Pockets.

SpongeTowels.ca

grocerybusiness.ca

September | October 2014

75

presents

Show

&

Conference

11 Country Pavilions!

Register now for FREE until June 30st!

25 countries will be represented

October 27-28, 2014

Miami Beach Convention Center, Hall C

Discover a world of new and creative products!

Network with more than 10,000 food and beverage professionals Attend a variety of Educational Seminars conducted by subject matter experts!

Meet with more than 500 global exhibitors featuring specialty food and beverages!

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For More Information Call (305) 871-7910 x221 or Email: info@worldtrade.org www.americasfoodandbeverage.com

WORLD CROPS,

LOCALLY GROWN Thanks to extensive research, grocers can now offer locally grown world crops.

By Sally Praskey

For world vegetables like eggplant, it’s a long, arduous, and costly journey from the farflung continent of Asia to the tables of growing numbers of new Canadian consumers who expect to find familiar products when they visit their local supermarket.

Enter Niagara Region-based Vineland Research and Innovation Centre, whose world crops breeding program focuses on the commercial production of locally grown okra, Asian long eggplant, and Indian round eggplant, among other produce. Vineland is adapting several vegetable varieties so that they can be produced commerically in Ontario.

By 2020, there will be 2.2 million new Canadians, with immigrants – primarily South Asians, Chinese and Filipinos – accounting for two-thirds of Canada’s population growth, notes Dr. Michael Brownbridge, Vineland’s research director, horticultural production systems, in his report New Vegetables For New Markets: Growing Opportunities for Ethnic Vegetables in Ontario. From 2008 to 2012, Canadian consumption increased by 27 per cent for eggplant, and 55 per cent for okra. These new Canadians will drive more than 70 per cent of sales growth in fresh produce, says Brownbridge.

CROPPING UP:

800 The approximate number of vegetable varieties evaluated in Vineland's world crops breeding program.

When this newly popular produce is grown locally, it can be on a supermarket shelf within 48 to 72 hours of harvest. That means longer shelf life, lower transportation costs, and lower greenhouse gas emissions, while also benefitting the local economy and allowing traceability and food safety.

These locally grown vegetables are already commercially available, says Brownbridge. “In 2013, several of the growers that we work with sold to wholesalers at the Ontario Food Terminal, and produce made it onto shelves of several Ontario supermarkets,” he says. “Other growers sell via farmers’ markets or direct contract to restaurants. However, based on estimates from 2013, local production still only meets about 10 per cent of the in-season demand.”

Longo’s was the first major Ontario food retailer to work in partnership with researchers and field specialists at the Centre to develop a sustainable supply chain for these products, according to Vineland’s 2013 Innovation Report. Over the past four years, Longo’s has championed the introduction of world crops by inviting farmers – who are involved in Vineland’s field trials and are already shipping produce into Longo’s distribution centre – to include the new crops with their shipments.

1.1 MILLION + OTTAWA INVESTS IN WORLD CROPS With a federal government investment of over $1.1 million, Vineland will: • Fund research aimed at increasing seasonal field production of Oriental long eggplant and okra; • Evaluate the use of greenhouse technologies; • Develop sweet-potato varieties adapted to Canadian conditions.

Vineland is adapting several vegetable varieties for production in Ontario ROUND EGGPLANT

OKRA

YARD LONG BEANS

CHINESE GREEN ONION

INDIAN RED CARROT

Also: Callaloo, Chinese and Thai hot chili peppers, bottle gourd, fuzzy melon, daikon radish, and tomatillo.

Source: New Vegetables for New Markets: Growing Opportunities for Ethnic Vegetables in Ontario

grocerybusiness.ca

September | October 2014

77

it figures

82% of consumers are concerned

about minimizing potential future health problems, 68% are concerned about losing weight

78

86%

57%

of consumers think it is important that products are naturally sweetened

avoid artificial sweeteners and sugar substitutes

September | October 2014

Making the healthy choice Takeaway Health is no longer an exclusive concern of older generations, but is now at the forefront in Canadian consumersâ&#x20AC;&#x2122; minds. Campaigns around healthier food options will capture your customersâ&#x20AC;&#x2122; attention.

Takeaway Health-savvy consumers know their way around product labels.

There is an increasing demand for whole foods that require an invested effort in brand development, marketing and sound education about product claims.

41% of Canadians are concerned about reducing the level of salt/sodium in their diets, but 15% find it hard to follow through Takeaway Make the healthier choice the easier choice. Clear labelling and shelf markers can put a healthier option in the spotlight.

No artificial preservatives (16%) and organic (15%) top the food options Canadians are willing to pay more for

51%

Takeaway Consumers are choosing simpler food options. Communicating your organic offerings efficiently to consumers who are less price sensitive will result in added traffic to other profitable areas of your store.

have purchased organic products in the past 12 months; vegetables and fruits are the top items purchased Takeaway Knowing your consumer and the demographics around your store is important in deciding how much space to allocate to this growing segment.

grocerybusiness.ca

41%

Carman Allison is vice-president of Consumer Insights for Nielsen in Canada, and is responsible for creating thought leadership insights for CPG manufacturers and retailers.

Carman Allison

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

September | October 2014

79

The coffee thatâ&#x20AC;&#x2122;s enjoyed by millions

can now be enjoyed by millions more.

The coffee that’s loved by millions is now coming to your store. Your shoppers can enjoy the same rich, smooth and delicious taste of McCafé® Premium Roast coffee, right at home.

Here are a few reasons to get even more excited for McCafé®: • McCafé® is the #2 brand in Away From Home coffee in Canada1 • McDonald’s® has more than doubled its share of brewed coffee (without including restaurant expansion) since 20081 • McCafé® is launching with 4 SKUs across R&G, TASSIMO and Keurig™ compatible pods Merchandising support includes:

End Cap

Talk to your

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representative for more information.

The NPD Group/Crest®, Year Ending February 2014. ©2014 McDonald’s. 2014 Kraft Canada Inc. All rights reserved.

TASSIMO and DESIGN are Trademarks Used Under License.

Works with KeurigTM K-CupTM brewing systems. Not compatible with Keurig VueTM coffee makers. KeurigTM, Keurig VueTM, and K-CupTM are registered trademarks of Keurig Green Mountain, Inc. and its related companies. Kraft Canada Inc. is not affiliated with Keurig Green Mountain, Inc., and its related companies.

1

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