November/December 2014

Nov / Dec 2014 Vol 4 | No 6 $9.95

BE PREPARED The Rise of the

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Grocery Business November | December, 2014 Volume 4, Number 6

contents

Price Chopper, Latham, N.Y.

13

DEPARTMENTS 6

Front End People & News

34 Making It

66 Perry’s Point of View

Organic Meadow

60 Launch It, List It

November | December 2014

New and now discoveries

64 It Figures

6

11 Open Mike

Think outside the box!

Cover Photo: Matt Johannsson

62 Launch It, List It

What’s new at CHFA East

Super snacking

It gets better

ON THE COVER

15

Be Prepared The rise of the grocerant

56

15

FEATURES

PHOTO GALLERIES

24 BrandSpark

13 OPMA 20th Annual

37 Advantage Group –

31 Grocery Innovations

Golf Tournament

11 Critical Shopper Factors

Canada

Mirror Report

Vendors reflect on retailer relationships

53 Canadian Health Food

40 Leaders on Leadership

Blair Ruelens, PepsiCo Foods Canada

42 SIAL Paris

Association – East

56 United Grocers Inc. Annual Vendor Awards Dinner

Food of the future

BE PREPARED 15 The Rise of the

19

17 A Moveable Feast

20 Tony Chapman

Grocerant

NPD: QSRs a Recipe for Growth

Is the restaurant industry eating your lunch?

42 November | December 2014

7

Front End

John Scott receives the

Wild Rose Spirit Award The Independent Retail Grocers Association of Alberta recently honoured John Scott with the Wild Rose Spirit Award. The award was given to Scott in appreciation of his dedication and efforts to develop and foster the spirit of the independent and franchised grocers belonging to the Independent Retail Grocers Association (IRGA). The organization consists of independent retailers as well as Sobeys and IGA franchisees.

“From my perspective, this closed a full loop on my career,” says Scott, who is the former president and CEO of the Canadian Federation of Independent Grocers (CFIG).

“I started in this sector because IRGA retained me to undertake the arduous process to secure an increase in the minimum price of fluid milk in the early ’80s. That success led to other contracts and ultimately to work with CFIG.”

Frank Lovsin (left), chairman of Freson Market, presents the Wild Rose Spirit Award to John Scott.

SOBEY FAMILY CREATES QUEEN’S UNIVERSITY SCHOLARSHIP FUND

Our own “Open Mike” (Michael Marinangeli) took a moment from his recent Mediterranean cruise to enjoy a copy of Grocery Business.

Donald R. Sobey and his son, Rob Sobey, have created a scholarship fund to support MBA candidates from Atlantic Canada applying to study at Queen’s School of Business.

November | December 2014 Volume 4, Number 6

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 Contributing Writers Peter Diekmeyer (Montreal), Mary Scianna

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

8

Contributors Rodney Daw, Michael Marinangeli, Perry Caicco, Tony Chapman

November | December 2014

Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca Grocery Business Advisory Council Tom Barlow, Canadian Federation of Independent Grocers Perry Caicco, CIBC World Markets Chris Terrio, CROSSMARK Canada Inc.

The D&R Sobey Atlantic MBA Scholarship fund amounts to $4 million, and will provide several scholarships each year. Donald and Rob Sobey, who are both alumni of Queen’s University, established an undergraduate scholarship at the university in 1999.

grocerybusiness.ca

Mark Ayer, Kraft Foods Canada Tim Berman, Kraft Foods Canada Michael Marinangeli, MIDEB Consulting Inc. Cheryl Smith, Parmalat Canada David Wilkes, Retail Council of Canada 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

Nancy Croitoru, Food and Consumer Products of Canada

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Front End

Sobeys nudges its vendors toward better eating program

By Peter Diekmeyer

In late October, Sobeys Quebec hosted a special supplier forum in Montreal that was designed to promote the benefits of its Joy of Eating Better campaign. A select group of more than 400 participants – representing 200 suppliers – enjoyed a packed schedule of presenters, including nutritionists and market professionals, who shared ideas on how to better meet the needs of the province’s food-fussy consumers.

Sobeys’ research reveals 95 per cent of Quebecers believe that eating well is important. Three-quarters of them read the ingredients when buying food products, and 60 per cent try to find ways to reduce salt, sugar and fat intake. “Consumers are changing. We need to change with them,” said Claude Tessier, president of Sobeys IGA Operations, whose key goal is to get suppliers to improve product offerings.

The bid aligns the grocer’s social responsibility agenda with a move to grab a bigger share of food consumers’ budgets. The hope is that, as Quebecers continue to improve their diets, they will prepare more of their own meals.

A particularly interesting panel featured francophone Quebec television food show personalities, who are major influencers of food in the province. “I don’t think the fact that Quebecers read food labels is a good thing. If they trusted the ingredients, they would not have to read them,” joked Christian Bégin, host of the show Curieux Bégin.

suppliers there,” said Bégin, a nod to the fact that 90 per cent of Sobeys’ Quebec grocers are independent operators who have considerable freedom when it comes to buying for their stores. “I recently visited Italy, where grocers’ labels indicate the kilometres between the grocer and producer.”

Bégin observed that, with so many factors vying for consumers’ attention, food consumption is one of the few links that brings people together. He also stressed the importance of offering locally produced items.

“IGA has a chance to be the heart of local communities by creating real links with

Youri Rivest, vice-president of CROP Inc., which has been researching Quebec food buyer behaviour for nearly two decades, provided insights into why it’s beneficial for the industry to act: “Quebecers take their food consumption seriously… So you had better treat them right.”

grocerybusiness.ca

Claude Tessier, president, Sobeys IGA Operations, presents to their vendor community.

November | December 2014

9

Front End

FARMERS’ MARKETS “POP-UP” AT CALGARY CO-OP

Tea-ing Off Ron Sadler, chairman of TAC, and Louise Roberge, president of the Tea Association of Canada (TAC), and managing director of Twinings North America, welcomed Canadian and international attendees to SolidariTea, the 5th Annual North American Tea Conference. The event took place September 16-18 in Niagara Falls, Ont.

By Sally Praskey

Pat O’Keefe (left), Finlay Tea Solutions U.S. Inc., with Ron Sadler, Twinings Tea

This past harvest season, three Calgary Co-op stores took local food to a new level when they hosted pop-up farmers’ markets. Each one-day market was home to 12-16 local producers and some of Calgary’s favourite food trucks.

“Local producers often have a selection of products that customers otherwise wouldn’t see in traditional grocery stores, which is why markets are a place of discovery,” says Ken Woo, CEO of Calgary Co-op. “Real food innovation is happening on the farms and ranches themselves – talking to the producers directly offers a consumer so much insight.”

Traditional and “Bollywood” style dancers entertained guests during the gala dinner.

On the green (l-r): Paul Higgins Jr., Mother Parkers Tea & Coffee; Philip Miles, Van Rees Group; Peter Scandrett, Van Rees Group; Eugene Amici, Henry P. Thomson, Inc.

Exhibitors at this year’s Grocery Innovations Canada show donated a total 30,210 pounds of food to local food banks. Pictured (l-r): David Bauer, director of public affairs, Maple Leaf Foods; John Phillipson, vice-president of marketing, Weston Bakeries; Gail Nyberg, executive director, Daily Bread Food Bank; Catherine Jackson, director, corporate communications, General Mills; Tom Barlow, CEO & president, Canadian Federation of Independant Grocers.

10

November | December 2014

Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, notes that it is a growing trend for some retailers, in both Canada and the U.S., to locate farmers’ markets in their parking lots. “There is consumer demand for locally grown or produced products,” he says. “Whether it is by buying directly from local suppliers for resale in their stores, or creating an opportunity for local suppliers to sell on their property, supporting local businesses and satisfying this consumer demand is one way that our members differentiate themselves from the big corporate stores.”

The inaugural markets were “unbelievably successful,” Woo enthuses. “It’s been a great experience for the local vendors, who have had an opportunity to share their unique stories and products; for our members, who are discovering new producers; and for Co-op – we’ve been able to give our members a new shopping experience; an experience one simply doesn’t get from everyday shopping.”

He adds that the number of participating vendors doubled after just one event. “Based on the interest we’ve received – from our members and from local producers – we will definitely offer farmers’ markets next year. It’s an incredible opportunity to show our support for local.”

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Front End

Transitions The Clorox Company of Canada Ltd. has appointed Michael Pilato as general manager and president.

Previously, Pilato was vice-president, sales.

Overwaitea Food Group has made several changes to its senior leadership team: Jamie Nelson (pictured, right) was promoted to senior vice-president, retail operations; Blendle (Scotty) Scott (pictured, left) was promoted to senior vice-president, merchandising and business development; Mike Olson was named vicepresident, fresh merchandising; Ken Clark takes on the role of general manager of corporate brands; Gayle Corah was appointed vice-president of information technology; Wayne Currie is the new vice-president, supply chain and e-commerce; and Brian Heppell is general manager of e-commerce.

Tina Lee is the new CEO of T&T Supermarkets. Lee, who previously was director of strategy, takes on the role formerly held by Cindy Lee, who founded the company in 1993 and who is retiring.

12

November | December 2014

Saskatchewan-born Carolyn Tastad has been appointed as group president of Procter & Gamble’s North American business. Tastad previously was global customer development officer.

Tom Gunter has joined Fiera Foods as executive vicepresident and general manager. Gunter’s career includes leadership roles at ConAgra, Del Monte Canada, Frito Lay and Molson Coors.

Moya Brown is the new vice-president of marketing at Campbell Canada. In her new role, Brown is responsible for strengthening Campbell Canada’s core business and overseeing the marketing function.

Luc Groulx is the new CEO of Xavier Les Moûts de Pomme. Groulx has held senior sales roles at Kraft Canada and Mondelez Canada.

Paul D. Sobey, former president and CEO of Empire Company Limited, has been named Chancellor of Halifax-based Saint Mary’s University. Sobey, who retired as Empire’s CEO last December, follows in the footsteps of his father, David F. Sobey, who was the first lay Chancellor of the University from 2008 until 2010.

McCain Foods Limited has appointed Shai Altman as president, Canada.

Altman joins the company from Wm. Wrigley Jr. Company, where he has been president, Wrigley Canada, since 2009.

Calgary Co-operative Association Limited has appointed Ken Keelor as CEO. Keelor most recently was vice-president, national procurement, Sobeys.

Alain Champagne is the new president of McKesson Canada.

Champagne joined the company in 2010, and previously held roles with PepsiCo (FritoLay) and Procter & Gamble.

Danielle Pearson has joined Happy Planet as vice-president of sales. Previously, Pearson was director of customer development, Canada, with Nature’s Path Foods.

Nick Jennery is the new executive director of provincial food bank, Feed Nova Scotia. Previously, Jennery was CEO of the Winery Association of Nova Scotia, and the Canadian Council of Grocery Distrubutors.

Sandra Martin, former editor of Walmart Canada’s Walmart Live Better magazine, is now editorial director of Canadian Living magazine at TC Media.

United Grocers Inc. has announced that Freson Bros. has joined UGI effective January 1, 2015

Open Mike

Think Outside the Box! Will dollar stores be the next tonnage drain on the food industry?

By Michael Marinangeli

The Canadian grocery retail landscape continues to evolve. Over the past 30 years, we have witnessed the disappearance of iconic retailers such as Dominion, Steinberg, A&P, and the Oshawa Group banners, while new entrants such as Costco and Walmart have captured over 20 per cent of the national business. Meanwhile, industry consolidation is ongoing as Sobeys and Loblaw digest their acquisitions of Safeway and Shoppers Drug Mart, respectively.

We have also seen the rapid growth of discount stores, leaving conventional stores to reinvent themselves, or face oblivion.

Square-footage growth has outpaced market growth for a number of years, putting tremendous pressure on store productivity and viability. While some predict that less space will be added in 2015 than in previous years, the existing square footage will continue to negatively impact sales and margins in the years ahead.

Plus, new competitive threats are bound to surface as others see opportunities in our markets. Rumours of Aldi and Lidl coming to

grocerybusiness.ca

Canada have circulated for many years.

These retailers are true discounters, and would leave everyone (including our discounters) scrambling to compete on price.

So what’s next?

The consolidation of dollar stores south of the border might provide a clue as to what we can expect down the road. The combination of Dollar Tree and Family Dollar would result in 13,000 locations throughout the U.S., with plenty of room for expansion in Canada.

These organizations are starting to get more attention from CPG manufacturers, resulting in special pack sizes for dollar stores. Sound familiar? Do you remember 25 years ago when manufacturers started expanding their SKU base for large packs for Price Club and Costco? This time, it is at the other end of the spectrum, with small sizes and low price points the key components.

Dollar stores in the U.S. carry a larger variety of packaged grocery and frozen foods than their counterparts in Canada, where the grocery assortment is limited, and no

perishables are offered. That could represent a growth opportunity here.

Currently, our homegrown Dollarama has over 900 stores across Canada, and counting.

Some analysts believe we have not yet reached the saturation point and there is still room for expansion. Loblaw is often ahead of the curve on many industry trends, so it is interesting to note that it has launched three Box stores recently. The approximately 10,000-sq.-ft. stores have no advertising, about one-third fewer assortments than No Frills, and an EDLP (Everyday Low Pricing) formula.

History does repeat itself. Steinberg launched Valdi, the original box store in Canada, in 1979. I remember the first three stores in Toronto were so bad that I had difficulty acknowledging to suppliers that the stores were part of our organization.

Within a few years, however, Valdi had developed a winning formula and had grown to over 100 stores before its demise as Steinberg changed owners and eventually went bankrupt.

November | December 2014

13

Open Mike

Valdi’s formula for success was simple: • 25 to 30 per cent cheaper than conventional stores; • Smaller stores – 6,500 to 11,000 sq.ft. versus conventional stores at 25,000 to 30,000 sq.ft. (at the time)=lower rent; • No advertising – just word of mouth and a price sheet available to customers at the store; • Limited SKUs, sizes and brands – only 500 to 700 dry-grocery items; • Mixture of control-label and national brands; • Fewer hours and staff – one manager, one assistant and seven to 10 part-time employees; • No shelving – just skids;

• No produce, meat, deli, dairy products, frozen food, or in-store bakery departments; • No refrigerated staple items (milk, eggs and butter) to drag down margins; • Everyday price points as low as or lower than the lead front-page items at conventional retailers; • No complicated vendor programs – dead-net grocery costing to support EDLP, and Valdi made its own arrangements for procurement, warehousing, delivery and accounting.

For a decade, Valdi flew under the radar of its major competitors. There was no scanning data, so there was no outside record of how much tonnage it was moving. Its prices were

so low that it also acted as a cash-and-carry wholesaler for small and independent retailers.

I was once told that Valdi sold more paper products than any other banner in Ontario.

Despite its limited number of stores, it could move as much dry-grocery tonnage as any other grocery banner in the province. Plus, it was very profitable.

I think it would be an interesting retail concept to take the current dollar-store general-merchandise offering and combine it with a Valdi-type dry-grocery offering. I believe such a concept would have tremendous appeal to consumers, and could compete against club and large-store formats operating under a higher overhead structure.

It’s time for traditional grocery retailers to take off the gloves and fight to regain some of the market share, tonnage and margin dollars they have lost over the past five years. A new retail format with limited SKUs and a low cost structure might be the answer.

Consolidation in the grocery business has had its run; it is now time to grow the business the old-fashioned way – one customer at a time – by opening new stores that build sustainable customer loyalty and make the competition shiver when you roll into town.

Another option could be acquiring a dollar-store chain and adding the dry-grocery component. I think the dollar-store/discount dry-grocery concept has legs. First one in could be the winner.

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.

14

November | December 2014

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November | December 2014

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BE

PREPARED

by Sally Praskey

As grocers strive to differentiate themselves against a backdrop of online shopping and the proliferation of multi-channel competitors, they may find salvation by enticing customers into their stores with delicious and convenient fresh prepared foods.

One doesn’t have to look far to see what success looks like. It’s no longer an uncommon site to see families enjoying dinner and peoplewatching at Whole Foods, while Loblaws at Maple Leaf Gardens, Quality Foods, Longo’s, Fortinos, and Urban Fare in Vancouver have become meal destinations, whether for takehome or in-store dining.

And noting that fresh food is a traffic builder like no other, Saks Fifth Avenue recently announced a partnership with Pusateri’s Fine Foods to operate food-hall installations in the luxury retailer’s Canadian stores, starting in 2016. Italy’s famous Eataly, a unique hybrid of grocery and food service, is rumoured to soon be setting up shop in Canada.

Driven by consumers’ need for healthy and convenient foods, coupled with favourable demographics – aging baby boomers, smaller households and Millennials’ apparent lack of cooking skills – fresh prepared food offerings are experiencing double-digit growth.

Grocery retailers are ideally positioned to take advantage of this trend, especially when it comes to the battle for dinner.

grocerybusiness.ca Market Bistro by Price Chopper, Latham, N.Y.

November | December 2014

17

Continente Stores, Portugal

A 2013 study by A.T. Kearney, titled Fresh Prepared Foods: A Growth Driver for Your Company?, notes that “retailers have a considerable advantage in that they can offer one-stop shopping for ready meals and other household needs.”

But it won’t come easily. The business of fresh prepared foods is very different from that of traditional grocery, and the big question for grocers is how to make money at it. Hiring staff with food-service expertise, and partnering with a reputable fresh food provider who understands how to create appealing and cost-effective offerings, are the key to success.

Whether the prep is done in-store or at an off-site commissary, now is the time for grocers to act. “When it comes to fresh prepared foods, retailers must contemporize or risk losing relevance (and patronage),”

create new revenue (and profits), but it is not a foolproof solution. Retailers should look to fresh prepared food ‘winners’ for inspiration, but should not proceed without a model for how to replicate ideas in a way that is economical

warns the study. “Improving fresh prepared foods has potential to

and makes sense for their positioning.”

THE RISE OF

ping, exciting and flavourful fresh prepared foods may very well be the on-trend, tasty differentiator grocers have been

THE GROCERANT David Donnan, who has spent his entire career in the food and beverage industry, is a partner with A.T. Kearney, heading up its global food and beverage practice. He spoke with Grocery Business about why fresh prepared foods are the grocery channel’s best opportunity to energize a stagnant marketplace.

Beyond the plain-vanilla food experience of online shop-

seeking as consumers come to eat, and stay to shop.

WHY ARE FRESH PREPARED FOODS GROWING SO QUICKLY?

WHERE ARE GROCERS GETTING THEIR PREPARED FOODS?

There’s a convergence of several trends, with healthy eating being the biggest one.

The second major trend is the need for convenience. We’re eating more and more of our meals on the go and looking for convenient solutions at dinnertime.

And the third one is changing demographics, where Millennials and the boomers overlap in their meal preparation needs because they are both one- or two-person households (at least until the Millennials form their families).

Both those demographics are looking for ways to get convenient, healthy foods.

There are a variety of options. Retailers can prepare the food in-store, partner with a CPG food manufacturer that has a food-service offering, or work with a third party that specializes in prepared foods. The retailers that are making money have found the right combination of product and price point.

And price point is very important because retailers can charge a bit more if their offering is good quality and healthy. The retailers that are doing it well have figured out the equation and are able to realize better margins.

CAN RETAILERS MAKE MONEY AT THIS, OR IS IT MORE OF A TRAFFIC BUILDER? They can make money, although a lot don’t because of how they manage their labour costs. Food service in grocery stores should be operated much more like a restaurant.

David Donnan

18

November | December 2014

DONNAN SAYS: •M erchandise boldly. Whole Foods and Wegmans in the U.S. put a big focus on merchandising their prepared food offering because they know they are really competing against restaurants.

Market Bistro by Price Chopper, Latham, N.Y.

DINING IN STYLE

Yummy Market, Maple, Ontario

REGIONAL SPECIALTIES HARRISON COVE, LOUISIANA

A MOVEABLE

FEAST

Beyond fresh prepared food counters, grocers that want to differentiate their store offering may need to look no further than the new and exciting trend to food halls. Grocery Business spoke with Juan Romero, president and CEO of international store design firm api(+), and Tom Henken, vice president and director of design, about their take on this cutting-edge trend.

WHAT’S IMPACTING THE GROWTH OF FRESH PREPARED FOOD?

SPEAKING OF MARGINS, WHAT DO YOU THINK IS POSSIBLE? If you are able to control your labour and input costs and set a reasonable price point, you can potentially get contribution margins of +20 per cent.

WHAT ARE THE CAVEATS? A big caveat for grocers is to be prepared to invest time, money and people because doing a less than stellar job will work against a fresh and healthy brand image. If your prepared food counter looks like a wasteland, you’re not going to be able to sustain a fresh positioning.

Henken: My view is that Millennials are more meal-oriented, rather than people who stock-up their pantries. Because they’re not cooking as much as previous generations, they are looking for meal solutions, which is driving the growth of fresh prepared in grocery and the trend to food halls.

HOW ARE GROCERY CUSTOMERS TAKING TO THESE NEW FRESH PREPARED OFFERINGS? Romero: Around 12 years ago, at an FMI Convention, the grocery retailers were concerned that restaurants were taking all of their business. And this year, at the National Restaurant Association convention in Chicago, the restaurant people were concerned that the grocery stores were taking all of their business. Grocery stores have definitely gotten better at their fresh prepared offering while creating a more interesting food experience.

FINAL THOUGHTS?

DESCRIBE THE FOOD HALL CONCEPT.

Think like a restaurateur, not a grocer.

Romero: It’s a relatively new food-service concept. If you’re in the restaurant business, a food hall is a food court run by independent food operators, but within a grocery store it can be owned and operated by the retailer.

•H ire staff with restaurant experience because, in this area of the store, you are in the restaurant business.

• Closely manage your shrink.

•H ave a diversified offering for the consumer who may want to eat on-the-go, stay in-store or take a hot meal home.

Henken: When I think of a food hall, I think of multiple stations featuring a variety of cuisines. Price Chopper (a U.S. grocery chain) has been able to create that within a grocery store setting.

Continued on page 18 November | December 2014

19

A MOVEABLE

FEAST

Continued from page 17

HOW FEASIBLE IS IT FOR A GROCERY STORE TO INCORPORATE A FOOD HALL? Henken: It’s possible but the advice I would give is to take baby steps. Mariano’s in the Chicago area isn’t quite a food hall yet, but they’re experimenting with different things. They’ve got a smoker going and a barbeque offering that is pretty compelling. We visited one of their new stores in Chicago and it was doing a brisk business.

Food service is definitely a different business from grocery. Price Chopper created a food hall concept in their Latham, N.Y., store and brought in a manager with food-service experience to take them beyond the usual prepared food offerings.

Olive Market, CJ Foods, Korea

SELL THE SIZZLE

DOES THE RETAILER OPERATE THE STATIONS, OR ARE THEY LEASED OUT TO INDEPENDENT OPERATORS? Henken: The concept is evolving so that’s a blurry line right now.

Typically, the retailer would operate the food stations, but not always. There was a period in the U.S. supermarket industry when they were bringing in food-service operators such as Panda Express and Domino’s Pizza. However, Price Chopper has decided to hire professional expertise to run the food through their supermarket operation.

WHAT IS TYPICALLY THE SQUARE-FOOT MIX OF FOOD SERVICE TO GROCERY? Romero: The Whole Foods in Austin [Texas] is interesting because within each department, they’ve created a food experience. For instance, in the produce department, there is a salad offering.

Within the meat department, there is a barbeque operation with a place to sit and eat brisket. If you move on to the bakery area, there is a dessert island where you can sit and people-watch.

On the other hand, Price Chopper has what they call the Bistro Hall, which offers a variety of foods, such as burgers, hotdogs, tacos, fried fish, plus a pizza parlour, an Italian market and a New York style deli – all in one area of the store.

FINAL THOUGHTS? Henken: Food halls, done well, are consistent traffic drivers and definitely the most exciting thing happening in the grocery industry right now.

JUAN ROMERO PRESIDENT

TOM HENKEN VICE-PRESIDENT

Harrison Cove, Louisiana

TOP-RANKING DRIVERS OF QUICK-SERVICE DINING 1. CONVENIENT LOCATION 2. I LIKE IT THERE 3. ALWAYS/REGULARLY GO THERE 4. GOOD PRICES 5. HAD A SPECIAL TASTE/CRAVING Source: NPD Group

2/3

OF RESTAURANT CONSUMERS WANT UNIQUE, CRAVEABLE ITEMS THEY CAN’T MAKE AT HOME Source: Technomic

BE PREPARED

A RECIPE

FOR GROWTH

How did quick-service restaurants become grocers’ newest competitor?

By Robert Carter

The battle for customers at food service in Canada has never been more intense.

Operators are upping their game in finding new ways to attract guests in what is truly a battle for share in a challenged market. Even at quick-service restaurants (QSR), which have been an area of growth since 2008 in the post-recession era, visits are down one per cent in the latest year.

The impact of QSR on the food-service industry cannot be overstated. Accounting for two-thirds of food-service visits, just under 4.3 billion Canadians went to, or ordered from, a QSR last year – an increase of 300 million since 2008. By contrast, full-service restaurants (FSR) ceded 80 million visits over that period. Retail food service, which includes grocery, department and convenience stores, grew by eight million visits.

For grocers, QSR also represents home meal replacement’s most significant competition, with 22 per cent of consumers surveyed indicating they would visit a QSR ahead of a grocery store.

QSR’s growth since the recession has been notable in a global environment where flat has been the new up. How did QSR grow, and what can grocers learn from its success?

Successful QSR operators have focused on expanding what are traditionally non-core dayparts and driving menu innovation to power excitement and appeal to a broader

grocerybusiness.ca

customer base. What QSR has not done on the whole is reduce prices. Last year, the average cheque was 14 per cent higher versus 2008, which is the largest increase of all formats.

Breakfast has been an area of particular growth for QSR. Since 2008, breakfast has grown by an average of five per cent annually, outpacing all other dayparts. This is followed by the afternoon snack occasion, which has grown 2.4 per cent annually.

Leading QSR operators have been aggressive in growing their morning traffic.

A focus on coffee, along with promotional support for breakfast foods such as sandwiches, has been instrumental in creating habit-forming behaviour among consumers.

Menu innovation, including promotions such as limited-time offers, has been instrumental in generating excitement at QSR. Recent innovation examples include wraps, smoothies and specialty coffees.

The competition at food service, and specifically QSR, is unlikely to let up. And as grocers look to develop their differentiating HMR programs, leveraging QSR’s growth strategies, particularly around promotions and menu innovation, can provide grocers with a strong competitive advantage.

Robert Carter Executive Director NPD Group Canada

RANKING OF THE TOP 5 WORLDWIDE QUICK-SERVICE RESTAURANTS

1 2 3 4 5

McDonald’s Subway Yum Brands Chick-fil-A Chipotle Mexican Grill Source: National Restaurant Association

November | December 2014

21

Is the restaurant industry eating your lunch?

Time-strapped consumers – especially the Millennial generation—are opting for restaurant meals and take-out instead of home-cooked meals. Entice them back to your store with a dynamic HMR offering.

By Tony Chapman

At the turn of the century, two per cent of meals were eaten outside the home.

Today, that figure is almost 50 per cent, and the reality of the eating-out phenomenon is that it’s a sledgehammer hitting the only two metrics that truly matter to your business: traffic and basket.

For decades, we’ve heard health experts connect fast food to North America’s growing problem with obesity, while behavioural psychologists emphasize the importance of the family meal. Research continually shows that children who have regular meals with their parents get better grades, have higher self-esteem, and are more likely to stay out of trouble.

22

November | December 2014

So why aren’t consumers cooking more of their meals at home?

You can argue that we’re all time starved— research shows the number of Canadians working more than 45 hours a week has gone up exponentially in the past 15 years. You can argue that everyone’s family meal agenda varies, and that eating out is very convenient, as there’s always a restaurant nearby.

Then there’s the influence of shows on the Food Network, plus websites and blogs that have unlocked the inner foodie in many of us.

Our palettes have become more adventurous, and we can more easily find different tastes outside our homes. Even fast food is

becoming more exciting, with “street meat” giving way to interestingly themed food trucks.

You can even make a case as to how sophisticated the restaurant business has become in engaging and persuading the consumer. New formats, new menus, constant advertising and too-good-to-be-true promotions like free coffee, free refills, kids eat free, as well as “dollar menus,” are all enticing shoppers away from your store.

All of these factors are real, and they combine to create a mighty force against grocery retailers. But you can fight back with strategies that consumers will respond to.

BE PREPARED

Max out the user experience User experience is becoming the defining tiebreaker for consumers. Apple succeeded with the iPod at a time when the Sony Walkman owned portable music. It didn’t take long before dozens of MP3 players hit the

An investment in HMR is an investment in building your brand, your traffic and your basket. market because they could put 1,000 songs in your pocket, and were so easy to use. Today, Keurig, Tassimo, Nespresso and other high-end coffee makers have taken back some market share from neighbourhood cafés by enabling consumers to become at-home baristas. These

companies have succeeded because they improved the consumer experience.

Consumers’ expectations are rapidly changing. And yet, within grocery stores, the shopping experience is still designed to serve the needs of the various profit centre departments and the demands of the bottom line, while largely ignoring the needs of the shopper.

It’s no wonder consumers are so stressed. In order to assemble a meal, shoppers must create a list of ingredients, carve out time in their busy day and then race around a grocery store, navigating various departments in order to acquire all the ingredients. Then they go home and spend quite a bit of time preparing the meal.

Ask yourself: if you were a time-strapped consumer with limited cooking skills (as many Millennials are), what would you do? Would you head to the grocery store and search through a maze of aisles and products? Or, would you opt for convenience by ordering a take-out dinner, or dining at an affordable quick-service restaurant?

Build Excitement at the HMR Counter • Create meal solutions that are easy to assemble for any daypart, and that include protein, salads and complex

A Game Changing Strategy As a retailer, the easiest place to meet your consumers’ changing needs and to begin winning them back to your store is with your Home Meal Replacement (HMR) strategy.

Why HMR? HMR is your Trojan Horse for winning back consumers from the foodservice sector.

Whether consumers choose to eat-in or take-out, HMR is where you can differentiate your store by understanding the unique needs of your shoppers by daypart.

Your HMR offering can consist of familiar foods, foods with a twist, and menu items offering exciting new flavours that consumers increasingly crave. It’s where you can create immediate appetite appeal, and it’s where you can differentiate your store.

It’s a compelling strategy. Large grocery chains have the resources to hire a famous chef, or partner with experienced vendors to orchestrate a unique menu, while independents have the freedom to create the perfect menu for their particular market.

Both have the ability to distance themselves from many less-healthy quick-service restaurant offerings by promoting the fact that their unique HMR program offers delicious and healthy meals, which often support locally-sourced products.

HMR is a challenging concept to master, but getting it right is much better than watching the restaurant industry continue to eat your lunch.

carbs.

• Ensure your HMR offerings are affordable, healthy and great tasting.

• Think of your HMR department as a paid sampling platform to build business across your entire store.

grocerybusiness.ca

Tony Chapman Is a top-ranked keynote speaker, strategist and writer. You can reach him at tonychapmancan@outlook.com or @TonyChapman

November | December 2014

23

Q&A

Chicken Farmers of Canada’s new branding program takes wing

Responding to growing demands from consumers to know where their food comes from, Chicken Farmers of Canada (CFC) has introduced “Raised by a Canadian Farmer.” The branding program, whose logo will appear right on the packages of chicken, showcases farmers’ commitment to provide consumers with chicken raised to the highest standards of quality and safety.

What programs does CFC have to ensure that its chickens meet the highest standards?

Our mandatory On-Farm Food Safety Assurance Program (OFFSAP) emphasizes cleanliness and safety throughout each step of the production cycle, and follows strict biosecurity measures to protect animal health and prevent flock infections from outside sources.

These rules include requirements for animal care, feed and water management, and testing. Each farmer is audited annually to ensure compliance.

In 2013, CFC became the first commodity organization to receive full recognition by the Canadian Food Inspection Agency, as a result of OFFSAP.

What CFC programs uphold these standards?

CFC has created an auditable Animal Care Program to demonstrate and maintain the high animal care standards of Canadian chicken farms. It is based on the National Farm Animal Care Council’s (NFACC) Canadian Recommended Code of Practice for the Care and Handling of Chickens, Turkeys and Breeders from Hatchery to Processing Plant.

More than 40 stakeholder organizations were consulted during the development process, including the Canadian Veterinary Medical Association, Canadian Poultry and Egg Processors Council, Further Poultry Processors Association of Canada, and Canadian Federation of Independent Grocers.

The Animal Care Program has been integrated with OFFSAP to make it easier for farmers to implement.

How does the CFC branding respond to consumer demand?

Recent Leger Marketing studies revealed that Canadian primary shoppers believe it is important that chicken be labelled with its country of origin.

According to the study: The vast majority (88%) of Canadians would be likely to buy chicken if it had a label showing it is from Canada rather than elsewhere.

88%

What CFC consumer programs are offered to retailers?

Besides CFC’s strong traditional marketing program, we also offer a grocery store app, digital marketing programs, and a robust social media presence (our last Twitter party garnered over 30 million impressions).

Our new grocery list app lets shoppers create multiple lists and share them with other members of their household, as well as browse chicken.ca recipes for healthy meal ideas, nutritional information, and cooking tips.

What has been the response to the CFC program?

The processors and retailers coming onto the program are very enthusiastic about the “Raised by a Canadian Farmer” program, and have begun using it in their advertising and on their packaging.

This is important because research shows that the majority of Canadians would trust that message if it came directly from the farmers or a farmers’ group, rather than from only a retailer or processor.

However, there are still a variety of different “Canadian” logos and claims that Canadians are encountering when they purchase chicken products. Anecdotally, we’re hearing that this may be causing consumer confusion.

We continue to work with processors and retailers, encouraging them to use only the “Raised by a Canadian Farmer” logo and program.

The consumer messaging then is clear, concise and consistent across all - Lisa Bishop-Spencer, Manager of Communications, stakeholders.

Chicken Farmers of Canada

More significantly, over 87 per cent think it is important that the chicken they buy is raised in Canada.

chicken.ca

11 Critical Shopper Factors™

e p a e4 c s ap d n sc 4 a L nd La3

ChC ah na gneg s eins in th th e Se S oc oc ia ia l l

Canadian consumers are always on the hunt for ways to save money. But when it comes to grocery products, their needs and tastes continue to evolve. Value, performance, enjoyment (especially taste), health, convenience, brand trust and innovation are the key drivers of ENJOYMENT product preference, according to Looking for products that BrandSpark president and ENJOYMENT offer a Looking for pleasurable CEO, Robert Levy. products that experience.

BrandSpark charts these changes with 11 Critical Shopper Factors.

2 PERFORMANCE Consumers are more 2 Expect demanding.

PERFORMANCE to perform products are more Consumers at higher demanding. levels.Expect products to perform at higher levels.

1 VALUE Canadians are the 1 seekers most active VALUE of value for money.

Canadians are the most active seekers of value for money.

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November | December 2014

HEALTH

Looking for better long-term HEALTH prospects and Looking for better health better long-term quality now. prospects and better health quality now.

3

offer a pleasurable experience.

90% 90%

Taste is very important to food choice.

Taste is very important to food choice.

86% 86%

Proud to get value

Nutrition prevents illness Nutrition prevents illness

73% 73%

Family drives food choice

expect products want products to “work the “proven first time” effective”

Proud to get value

87% 87%

Family drives food choice

expect products to “work the first time”

92% 92%

5 Want products that 5 to use are simple CONVENIENCE

want products “proven effective”

81% 81%

Save on everyday items Save on everyday items

CONVENIENCE and save time.

Want products that are simple to use and save time.

Very important that products...

84% 84%

Very important that products...

Are simple to use

72% 72%

Are simple to use Changing to live healthier Changing to live healthier

76% 76%

Save time (Household) Save time (Household)

an Sho pper Study. Copyright BrandS

CANADIAN SHOPPER STUDY

BrandSpark Canadian Shopper Study and BrandSpark Critical Shopper Factors are trademarks of Best New Product Awards Inc. and BrandSpark Int www.BrandSpark.com | www.BestNewProductAwards.biz | www.BrandSparkMostTrusted.com

6 Known and trusted 6 backed companies TRUST

TRUST by trusted Known and trusted recommendations. companies backed by trusted recommendations.

77% 76% 77% 73% 76%

Health Cosmetics Personal Care Health

71% 73%

and improved Consumers benefits.are looking for new and improved benefits.

77% 77%

Like trying new products

67% 67%

Will pay more for a better new product

Household Care Food/Beverage

Will pay more for a better new product

69% 71% 69%

Food/Beverage

8 Connected to media 8 and via mobile CONNECTED

CONNECTED to each other Connected to media via social. via mobile and to each other via social.

Like trying new products

Household Personal Care Care

At Attitu tit d ud

36%

36%

9 Shoppers wield 9 are more more power, EMPOWERED

71% 71% 52% 52%

81% 81%

EMPOWERED informed, and have Shoppers wield a stronger more power, voice.are more informed, and have a stronger voice.

will recommend products

59% 59%

will recommend products Purchase the same products regularly

look for product reviews

Purchase the same products regularly

65% 65%

74% 74%

69% 69%

Personal care

Food

10 Too Much 10 Choice.

OVERWHELMED OVERWHELMED

look for product reviews

Household Care

ngng pppi pi hoho s Ss S rd rd wawa To To es es

Very important to purchase a TRUSTED Verybrand important to purchase a Cosmetics TRUSTED brand

7 Consumers are 7for new looking INNOVATION INNOVATION

Personal care

Food

Too Much Choice.

11 11impacting Diversity MULTIMULTICULTURAL

Household Care

72% 72%

of new Canadians want cultural food products to taste authentic vs.

56% Canadians overall of new Canadians want cultural food products to taste authentic vs.

56% Canadians overall

decisions.

CULTURAL

Diversity impacting decisions.

Source: 2014 BrandSpark Canadian Shopper Study. Copyright BrandSpark International. All Rights Reserved.

grocerybusiness.ca

November | December 2014

27

The As consumers increasingly view supermarkets as an alternative to restaurants, Â grocers have a unique opportunity to satisfy this demand by expanding their fresh food offering.

Tiffany Gate Foods creates customized HMR solutions that help supermarkets tap into this market opportunity efficiently by supplying restaurant-quality foods that are fresh and delicious.

SPECIAL CORPORATE REPORT

TIFFANY GATE “FRESHFOOD SYSTEM” From recipe development and production, to merchandising support and in-store training, Tiffany Gate’s “freshfood system” is an end-to-end solution designed to deliver the freshest, most delicious gourmet salads, prepared foods, soups, dressings, and other home meal replacement solutions.

TREND SETTERS Tiffany Gate’s international team of chefs and food scientists continually develop new recipes that help their retail customers satisfy consumers’ ever-changing tastes. Looking for a tried and true classic? Tiffany Gate has a line of traditional favorites that consumers still ask for by name.

FOOD TECH Tiffany Gate’s food scientists and microbiologists have developed a unique system that delivers uncompromising flavour, visual appeal and food safety – without the use of artificial flavours, colours, and preservatives – that is unrivalled in the fresh-prepared food industry.

TIFFANY GATE AT A GLANCE PLANT •8 1,000-sq.-ft. state-of-the-art research, development, and manufacturing facility in Toronto, Canada EXPERIENCE • Founded 25 years ago • Pioneered high-quality HMR in North America

24% of consumers

purchase fresh-prepared meals from a grocery store rather than a restaurant to save money Source: FMI 2014 Shopper Study

FOOD SAFETY & QA • HACCP and SQF Level 3 certified • US and Canada federally inspected FOCUS •H igh-quality HMR solutions for supermarkets, fresh-cut processors and food-service customers

Dressed to thrill No two salad dressings are alike at Tiffany Gate. Every salad made by Tiffany Gate comes with its own unique dress-

SOCIAL RESPONSIBILITY •W henever possible, sources locally-grown fresh produce • Designs all products with minimal packaging

The

TASTEMAKERS

ing specially designed to optimize the ingredients’ taste, texture and shelf life.

DID YOU KNOW? Quinoa was first used 3,000-4,000 years ago by natives in the high Andes

A DIFFERENT KIND OF FOOD COMPANY:

Quinoa is not a true cereal, but is closely related to beetroot, spinach and tumbleweeds

3 Researching consumer taste trends

Tiffany Gate is one of the largest importers and processors of quinoa in North America

3 Developing new food concepts 3 C ustomized in-store merchandising programs 3 Individualized store personnel training

THE TIFFANY GATE ADVANTAGE

Fresh Kit System

3 P rovides retailers with a turnkey, fresh prepared meal solution

Pioneered by Tiffany Gate Foods, the fresh kit system

3 Reduces labour costs

gives HMR departments the ability to delight consumers

3 M inimizes shrink as fresh food inventories are monitored regularly

with the highest quality salads and prepared foods that are finished in-store. Fresh-cut vegetables, proteins, grains and dressings are delivered perfectly portioned, and ready to be mixed for the first time before serving.

A Recipe for Freshness – Custom Designed Solutions Tiffany Gate works with each retail customer individually and confidentially to develop custom recipes and flavours that are unique to that customer. With no two identical Tiffany Gate products on the market, retailers can build long-term consumer loyalty for their own product lines.

63

%

of consumer meal decisions are made within one hour of mealtime.

Source: Technomic

That’s why Tiffany Gate’s development team designs its products to look as good as they taste.

3 O ffers flexibility to adjust menus according to evolving consumer tastes

FOOD SAFETY

AT THE HEART OF EVERY RECIPE Tiffany Gate designs every product with food safety in mind.

Each ingredient is carefully chosen for its individual properties as well as the way it interacts with other ingredients, in order to ensure the maximum shelf life and food safety of the finished product.

Consumers

27% Millennials

37% often purchase

grab-and-go salads Source: Technomic

FRESH NETWORK Tiffany Gate delivers products with the same optimal level of taste, flavour and freshness to all retailers, regardless of their distance, by partnering with local fresh-cut processors across North America.

The grocery fresh prepared food segment is growing at

6% annually Source: Technomic

For more information, please contact: Tiffany Gate Foods

The

TASTEMAKERS

Toronto, ON Canada (416) 213-9720 | tiffanygate.com

GROCERY INNOVATIONS CANADA

CANADIAN FEDERATION OF INDEPENDANT GROCERS 2014 CONFERENCE AND TRADE SHOW September 29-30, 2014 - TORONTO

One of the highlights of the event was the 52nd Annual Canadian Independent Grocer of the Year Awards ceremony.

For the complete list of winners, visit cfig.ca P H O T O S : R O D N E Y D AW

grocerybusiness.ca

November | December 2014

33

E N J OY A TA S T E O F

PEANUT COUNTRY! T

o deepen relationships with retail and trade contacts in Canada, the American Peanut Council offers annual

Peanut harvest tour participants hear from farmers about the challenges they face and the solutions they adopt. They

harvest tours to the heart of U.S. peanut country. These tours

meet with researchers who are unravelling the mysteries of

are both fascinating and educational as they include visits

the peanut genome and developing methods to improve crop

with farmers, processors, manufacturers, researchers and

quality and yield. They witness the U.S. peanut industry’s

peanut industry representatives.

Canada is the largest single country importer of U.S. peanuts, accounting for about 25 per cent of worldwide export volume. More than 80 per cent of peanuts in Canada come from a choice of 25,000 growers in the U.S. The main peanut-growing states are Georgia, Texas, Alabama, the Carolinas, Florida, Virginia, New Mexico, Oklahoma

modern farming and processing practices PEANU T FACTS:

and strict adherence to food safety protocols

• High in plant protein • Excellent source of Vitamin E, Folic Acid and Niacin • Contain healthy oils • Grown in 11 states across the U.S. with Georgia accounting for 50% of that production

from planting to processing.

and Mississippi.

U.S. peanut growers have harnessed technology to make their product better.

Growers use GPS systems in fertilizing and irrigating crops. Shellers use electronic eye and laser technology to clean, size and sort peanuts.

And shippers use cold storage where temperature and humidity control keeps the product fresh.

Recently the American Peanut Council invited a group of Canadian grocery industry representatives to attend the 28th Annual Georgia Peanut Tour. The two-day tour offered participants a comprehensive examination of the sophisticated techniques used to grow, harvest and ship peanuts. From leading edge research on disease and pest control conducted by the University of Georgia to the use of state-of-the-art farming and harvesting equipment, the American peanut industry ensures that a safe, economical and superior product reaches the end consumer.

From left to right in photo: Julie Rivest, Krispy Kernels Inc.; Kim Patenaude Krispy Kernels Inc.; Stephanie Grunenfelder, VP International Mktg, American Peanut Council; Christina Taylor, American Peanut Council; Brad Brownsey, Canadian Marketing Consultant, American Peanut Council

Making It

An Organic Pioneer Organic Meadow, Canada’s oldest organic dairy co-operative, is owned and operated by 100 Ontario family-farm producers.

By Angela Kryhul

Don Rees Chief Executive Officer Organic Meadow

Michelle Schmidt Marketing Manager Organic Meadow

Organic Meadow got its start 25 years ago as a big idea: six farmers gathered around a kitchen table in Durham, Ont., because they wanted to find a way to produce wholesome food without synthetic chemicals, pesticides, fungicides or herbicides.

Today, Organic Meadow is a cooperative with deep roots in the local farming community – ownership is shared among 100 Ontario family-farm producers of certified-organic dairy, grain and egg products.

“We pioneered the organic movement in Canada,” according to Organic Meadow CEO, Don Rees. Of the 28 million litres of certified-organic milk produced in Ontario annually, more than 20 million litres is sourced from Organic Meadow co-op members.

At its 22,000-sq.-ft. Guelph, Ont., processing plant – which opened in 2010 and was the first organic dairy in Eastern Canada – Organic Meadow produces more than 90 products, including milk, cream, eggnog, kéfir, yogurt, butter, ice cream, cheese, cream cheese, cottage cheese, lactose-free milk, and eggs.

About 60 per cent of the business is fluid organic milk, and the rest of the portfolio is growing fast, Rees says.

There’s huge potential to grow the organic milk market in Canada if its popularity in other countries is any indication, Rees says. About four per cent of all milk consumed in the U.S. is organic, and in Europe that amount is 12 per cent. However, in Canada, it’s much lower – approximately two per cent of all milk consumed here is organic, he says.

MILK THAT TREND

36

November | December 2014

Organic Meadow gets inspiration for new product development from trends that are emerging in the U.S. and Europe. For example, Organic Meadow’s Kéfir line – a cultured dairy product similar in taste and texture to drinkable yogurt – is booming, thanks in part to demand from eastern European immigrants. The organization also looks at trends in British Columbia, where the independent health food channel has catered to early adopters for at least two generations, Rees says.

Yet, demand for organic dairy is growing, and is primarily driven by new Canadians who are accustomed to a broad selection of organics in their home countries, and by Canada’s Millennial generation who are looking for organic products for their young families.

Gone are the days when the consumer who bought organic was “sort of on the fringe,” adds Michelle Schmidt, marketing manager. “The majority of Canadians are buying organic on a weekly basis.”

Small dairies like Organic Meadow’s Guelph operation face several growth challenges due to Canada’s complex supply management system, Rees says.

While Organic Meadow’s own farmers produce most of the raw organic milk supply, Canadian rules dictate that it

must be pooled so that all dairies, big and small, have access to it. There is also a ceiling on total raw milk production.

“We actually don't have enough raw [organic] material to fill the growing demand for our products,” Rees explains.

In this highly competitive market, Organic Meadow’s strategy is to build a strong, trusted brand, and to invest in its Guelph facility so that it can develop innovative new products for future growth, Rees says.

Canada’s organic food market grew to

58% of all

CELEBRATING

25 YEARS

Canadians buy organic products every week

$3 billion in 2012

Organic Meadow celebrated its 25th anniversary year with a public relations campaign focused on the authenticity of the brand, which is something that consumers really connect with, Schmidt says.

The co-op told its story via print ads, the sponsorship of National Organic Week, and by connecting consumers directly with farmers via in-store demos, consumer shows, farm tours, and on social media.

“I think it shows that customers want [products] to be personalized and authentic,” says Schmidt. “And we welcome the opportunity to do that.”

Milk is the number one entry

point into the organic category, often by young families Source: Canada Organic Trade Association (COTA), 2013

grocerybusiness.ca

November | December 2014

37

TM

THE MIRROR REPORT

VENDORS REFLECT ON RETAILER RELATIONSHIPS

By Sally Praskey

In a role reversal from The Advantage Report, suppliers rate the retailers.

Manufacturers are more pessimistic about their relationships with retailers than they were a year ago, according to Toronto-based Advantage’s 2014 Mirror Report.

Not only has the overall perception of major retailers declined compared with 2013, but there has been deterioration in all the key performance areas surveyed, with the exception of “Business Relationship.” Chalk up that slight improvement to enhanced perceptions of retailer joint business planning efforts.

“Category/Business Development continues to be the lowest-rated performance area,” says Vincent van der Heijden, director, client service, Advantage. “This was also the case in the Advantage Report (feedback from retailers for vendors). It seems that collaboration within this space is becoming increasingly challenging for both sides. Many vendors are experiencing less willingness from retailers to collaborate on category development and more on just extracting funds.” >

CONTINUED ON PAGE 39

Net Favourable Changes in Vendor Perceptions of Retail Relationships

2013

2014

35

30

25

31

25

25

27

27 25

20

21

20 18

19

15

10

5

Overall Performance

grocerybusiness.ca

26

23

Net Favourable (NF) Score

Overall, vendor perceptions of major retailers has declined somewhat over the past year

Business Relationship

Personnel/ Organization

Category/ Business Development

Retail Execution

Supply Chain Management Personnel/ Processes

November | December 2014

39

Scallops made simple.

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Wild-caught scallops coated in one of three signature sauces. Sauté in six minutes and customize with your favourite ingredients. Add them to your seafood lineup today.

Also le! ab avail

clearwater.ca/scallopsandsauce • (905) 858-9514 • cdnsales@clearwater.ca

MANUFACTURERS SAID…

TM

VENDOR–RETAILER RELATIONSHIPS WILL IMPROVE: CONTINUED FROM PAGE 37

“We both need each other. They need our data and market review to do well, and we need their execution in order to do well. Each party has something positive to offer.”

Ontario represented the most significant regional decline, plunging four net favourable points from last year. Category Development suffered the biggest drop versus 2013, specifically the response to the question “Is quick to market with new national brand items and programs.”

Manufacturers are divided on how unprecedented industry consolidation will affect the relationship with their retailer customers. “We’re seeing a more polarized view from vendors on the state of vendor-retailer relationships than in past years,” says van der Heijden. “By that, I mean there are now fewer vendors that believe relationships will stay the same.”

Increased competition appears to be at the heart of the discussion, he adds. “Some vendors think this will force retailers and vendors to strengthen relationships, while others think this will continue to shift the balance of power towards retailers, and will harm relationships.”

Forty-eight per cent of respondents believe retailermanufacturer collaboration will improve in the year ahead, while 30 per cent expect it to decline.

The top priority for manufacturers remains “Implements agreed-upon business plans,” unchanged since 2012 and indicating that stability and trust are at a premium.

Net Favourable Changes By Channel

RELATIONSHIPS WILL WORSEN: “Due to consolidation within the Canadian marketplace, there is an imbalance of power between retailers and vendors, which continues to widen.”

Priorities For Account Support

Implements agreed-upon business plans

3

2

Works productively with us to build profitable business for both parties

81%

2

3

Stores execute promotional and retail marketing plans in accordance with commitments

80%

30

29

20 17

15 12

25 20

10

10 5

Atlantic/Quebec

Ontario

GROCERY grocerybusiness.ca

2014

Drives demand for products through effective consumer-focused marketing

21 13

Is quick to market with new national brand items and programs

12

1

Drives profit through an appropriate balance of consumer sales and efficient buying

11

4

15

12 11

2013

35

24

13

Net Favourable Changes in Category Development – Ontario

2014

32

20

83%

1 1

2013

The top three priorities have remained relatively unchanged, though “Works productively with us to build profitable business plans” has shifted into the #2 position.

IMPORTANCE RATING

2013 2014 PRACTICE

West

Drug

Mass/Club/Value Convenience/Gas

Net Favourable (NF) Score

>

Founded in Canada in 1988, Advantage™ operates in more than 30 countries. Its jointly sponsored programs provide an ongoing industry benchmark for retailers and manufacturers to measure and track their relationships with key business partners.

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

November | December 2014

41

LEADERS ON LEADERSHIP

Blair Ruelens

Vice-president, customer development PepsiCo Foods Canada As part of Grocery Business’s ongoing series on leadership, Karen James, executive editor, interviewed Blair Ruelens of PepsiCo Foods Canada on mentorship, career advice and leadership lessons.

How do you personally define leadership?

Outstanding leaders are principled-based and values-led; operate with honesty and integrity, and consistently filter every decision and action through the lens of objectivity, principles and their values; lead by making others powerful; and recognize that leadership is action.

I follow passionately the leaders who show compassion, have strong principles, who act with the attitude of servant leadership, and who recognize that yesterday is over and it is only the future we can, and must, influence.

Churchill, Gandhi, several leaders at the companies I worked for, and my dad, are all leaders I admire greatly.

Whose leadership style do you admire, and why?

I have learned from every leader I’ve had.

I have benefitted from their leadership by seeing first-hand through their actions what to do and what I would not do as a leader. At the core of every business are the people who come to work every day and work to accomplish our common goals, and I admire any leader that recognizes that.

What was your first job?

My first job out of university was as a retail sales representative with Procter & Gamble in Toronto.

42

November | December 2014

Please describe a defining career experience.

There is one specific moment in my career that I learned a great deal from and look back on fondly.

In 1980, as a young sales rep, I was told I was moving to St. John’s, Newfoundland, to take over a very challenging territory. I was the first non-homegrown territory rep to sell in Newfoundland, a territory that had been vacant for several months. After 18 months, I had built lifelong relationships and a business several times greater in volume than when I arrived.

I learned a lot, too, including how to embrace the needs of the customer. I developed what became my core “operating principles,” and how to overcome adversity with a smile and an optimistic can-do attitude.

I returned to Toronto, as Sales Rep of the Year, my first promotion to management. I did not come back alone – I married my amazing wife, Barbara, who is also from an island (Manhattan).

BLAIR’S BIO EDUCATION

Did you have a coach or mentor who had a strong influence on your career?

There are two people, both close personal friends, that I have leaned on for guidance, mentorship and support in good times and in bad over the past 35 years. I have had many great managers over the years, but the man I report to now, Marc Guay (president of PepsiCo Foods Canada), has made these last four years of my career – since returning to Canada from the U.K. – a period of enormous personal growth, support and friendship, all of which I am forever grateful for.

What was the best career advice you received?

“Listen for the echo, cherish feedback.”

What was your best leadership lesson?

One very proud leadership moment in my career was when a young colleague in our IT department came to me asking for a career move to sales. At the time, cross-functional moves were not as accepted as they have become today. There was something very special about her, and I endorsed her transfer. Today she is Procter & Gamble’s group president, North America. I always encourage people to follow their dreams, build their capabilities, and accept every critical experience as a gift.

What qualities do you look for when you hire?

I look for passion for what they do, a compassionate people-first person, a great listener, a team player, a sense of humour, and a willingness to learn.

Your career took you to Europe for a time. What did you enjoy/learn most from that experience?

My global travels have provided me a unique window on the world. I had an opportunity to

grocerybusiness.ca

see, first-hand, unique cultures, beliefs and generational differences. What I saw, experienced and enjoyed was that, at our core, as people, we are really more the same than we are different. All people want happiness, to be loved, good health for ourselves and our loved ones, to learn, to grow and to be successful in whatever we choose to succeed at – and in our definition of success.

It is true our experiences, tools, environment and interactions provide structure to our lives, and sometimes, uniquely, the opportunity to choose the path we take, whom we take it with, and what we want to do along the journey.

Do you think the industry has changed significantly since you began, and if so, how?

At its core, our industry is still in the business of producing and selling quality products to satisfy our consumers’ needs for a happy, healthy life. I do not think that will ever change. The past decade has been recognized for an accelerated pace of change that is demanding transformational thinking to respond to our changing demographics, growth dynamics, technological advancements, globalization and methods to reach our consumer with the products and information they require.

So yes, our industry has needed to change, as change is our only constant. We all need to be focused on making sure every change we make provides a sustainable win-win-win solution, so our industry can remain relevant and strong.

We’ve often discussed books; what are you reading now?

I usually have two books going. I am currently reading Think Like a Freak by Steven Levitt and Stephen J. Dubner, and re-reading The Art of War by Sun Tzu.

York University – Toronto B.A. Honours – Urban Planning, Business

WORK EXPERIENCE 2010-present: VP, Customer Development, PepsiCo Foods Canada 2009-2010: President, IRI, U.K. 2006-2009: EVP, Global Director, Sales, Cadbury PLC, based in London, U.K. 2004-2006: President, Allan Candy SVP, Cadbury Adams 1999-2004: VP, Pillsbury/General Mills 1996-1999: CEO, Hanover Group, VP Sales and Marketing, XL Foods 1979-1996: Procter & Gamble Inc. variety of sales and marketing positions, including VP Sales Paper Products, and Corporate Market Director, Western Canada

INDUSTRY BOARDS/ACTIVITIES CFIG AMC over many years, starting in 1990 FCPC IAC over many years, starting in 1991 United Way, Toronto, 1986

CHARITIES/ASSOCIATIONS Past President MADD – York Region Humber-Guelph School of Business – International Business Advisory Council

PERSONAL INTERESTS Competitive long-distance running, golf and global travel

FAMILY Married to Barbara for 34 years.

Their children: Jonathan, an academic living in Athens, Greece, with his family; Bryan, an entrepreneur, living in Elora, Ont., with his family; and Lauren, a student at Tulane University in New Orleans.

November | December 2014

43

International

SIAL PARIS:

FOOD OF THE

FUTURE

By Mary Scianna

One of the SIAL Paris exposition halls

PARIS – If there’s one thing SIAL Paris does exceptionally well, it is to celebrate food in a way that only the Parisians can do.

This was in evidence during the five-day international food show that ran October 19-23 at the Parc des Expositions. More than 109 countries, including 13 exhibitors from Canada, were on hand to showcase their products.

“Good for you” would aptly describe many of the products on display, from unsaturated, cholesterolfighting pumpkin seed oil, olive oil popcorn, coconut oil chips, and skimmed-milk yogurt with olive oil and fruits, to dried root beet chips,

44

November | December 2014

grow-at-home mushroom kits, gluten-free cake mixes and seaweed spaghetti packaged in a bucket of seawater.

While SIAL Paris is typically the place where North Americans look for trends that will emerge in their marketplace, this year the health-themed trends of gluten-free and organics, for example, emerged in North America first, says Xavier Poncin, executive show director for SIAL Canada.

“If you [compare] North America and Europe, in the U.S. and Canada, consumers are first interested in health in their foods; and in Europe, it’s pleasure first and then health.”

Creative Thinking SIAL is not simply a platform to showcase food; it’s an event to see the creative approaches food suppliers have developed to bring food to peoples’ tables. At SIAL Paris, for example, they combined interesting ingredients to create a fresh take on existing food products, such as crackers with fruits and nuts, and outside-the-box packaging concepts such as one that allows consumers to grow oyster mushrooms from its cardboard packaging.

Xavier Poncin

SIAL Canada in 2015 The food industry is now gearing up for SIAL Canada, a show that promises to be bigger and better than ever, says Poncin.

The Canadian show takes place April 28 - 30 at the Direct Energy Centre in Toronto. “We are expecting 800 exhibitors, with half from Canada and half from approximately 45 other countries,” Poncin says. “We expect to see a lot more innovative products at the show and, of course, the best way to grow your business is to introduce new products to your customers.”

New to SIAL Canada 2015 is a B2B meetings program with U.S. buyers dedicated for international exhibitors.

“That means for two days in the mornings, there will be meetings, and in the afternoons, the U.S. buyers will walk the show to meet all the other Canadian exhibitors,” Poncin says. “We want to create an international show with exhibitors and attendees from around the world.”

grocerybusiness.ca

GET READY FOR TORONTO 2015 TORONTO 2015 IS TWO SHOWS IN ONE. SIAL CANADA IS AN INTERNATIONAL FOOD AND BEVERAGE TRADE SHOW OFFERING A COMPLETE RANGE OF FOOD PRODUCTS VIA MORE THAN 800 NATIONAL AND INTERNATIONAL EXHIBITORS FROM 45 COUNTRIES. SET CANADA TAKES PLACE AT THE SAME TIME AND IN THE SAME VENUE AS SIAL CANADA, AND IS NORTH AMERICA’S BEST SHOW WHEN IT COMES TO EQUIPMENT AND TECHNOLOGY AIMED AT FOOD PROFESSIONALS. TORONTO 2015 APRIL 28-30, 2015 DIRECT ENERGY CENTRE, TORONTO SIALCANADA.COM

November | December 2014

45

Sun-Maid is a proud supporter of Produce for Better Health Foundation.

YEARS

S T RO N G

Mike Fronte + Mike Dattoli built their certified-organic produce business on the strength of quality, selection, reliability and personalized service. By Angela Kryhul Most grocery retailers in the Toronto area have made the pre-dawn trek to the Ontario Food Terminal – sometimes several times a week – so that they could be among the first buyers on site to purchase fresh-from-the-farm fruits and vegetables for their stores. What was their alternative? (continued on page 46)

Special Corporate Report

Left to right, Mike Fronte Robert Kuenzlen Mike Dattoli Marco Capizzo

“We’re a ONE-STOP SHOP… I believe that’s our single biggest differentiator, and the driving force behind our success.” - Mike Fronte

That’s when Mike and Mike’s Organics was born.

Today, M&M is Ontario’s only exclusively certified-organic distributor of packaged and fresh fruits and vegetables.

Convenience is a cornerstone of the M&M business.

Customers place their orders by telephone, confident that only the freshest and highest-quality certified-organic produce will be delivered directly to their stores.

(Read more about the M&M distribution model, “Distribution: The Personal Touch,” p. 48.)

Mike and Mike’s at a Glance ESTABLISHED: 2004 LOCATION: Woodbridge, Ont. SOURCE: Directly from certified-organic produce growers in Ontario,

Fronte, president, and Dattoli, vice-president, operations, have seen their distribution

Quebec and B.C., as well as

business grow exponentially over the past five years as consumer demand for certified

carefully selected sources in

organics has soared. In fact, M&M has grown by 20 per cent in each of the past five years,

the United States and

and is on pace to grow by another 20 per cent for fiscal 2014, Fronte says.

internationally

A good portion of new growth is expected to come from the company’s snack line, which recently underwent a name change, from Organic Select to the Mike and Mike’s Organics brand name. The benefit to retailers of the 21-SKU line of dried fruits, nuts, seeds, and mixed nuts and fruit snacks is that it organizes various non-branded bulk organic commodities under one trusted brand name: Mike and Mike’s Organics. (See “Laying the Foundation for Growth,” p. 49.)

As they build for the future, the two owners – who’ve been very hands-on as M&M’s

DISTRIBUTION: Specialty retailers, major retailers such as Loblaw, Longo’s, Metro, Whole Foods, as well as select restaurants in Ontario.

chief produce buyers – have established a strong executive management team made up of

STAFF:

Marco Capizzo, general manager, who is responsible for day-to-day operations; Robert

35 full-time employees

Kuenzlen, executive vice-president in charge of sales, marketing and operational strategies; and Doug Rodriguez, vice-president, corporate accounts.

When you’ve got a hot commodity like certified-organic produce, you’re bound to face some competition in the market. But this is where M&M really shines. Fronte says the company’s biggest competition these days is coming from conventional produce wholesalers who are “dabbling in organics.”

Meanwhile, M&M offers direct-to-store delivery of more than 300 fresh, certifiedorganic fruits and vegetables each week.

“We’re a one-stop shop… I believe that’s our single biggest differentiator, and the driving force behind our success,” says Fronte.

47

Why Mike and Mike’s is an industry game-changer • A one-stop, solution-based vendor for purchasing certifiedorganic produce, much of it sourced locally; • A trusted and reliable source of unique and exotic certifiedorganic fruits and vegetables; • A source of branded certified-organic snacks that will build trust with consumers, in what has essentially been a bulk-bin business; • An unconditional guarantee that allows customers to return any unsatisfactory product, and to adjust orders the same day.

DISTRIBUTION: THE PERSONAL TOUCH Mike and Mike’s Organics is renowned for fostering high-trust relationships, and offering retailers time-saving, personalized services and solutions.

It seems almost revolutionary in its simplicity: Mike and Mike’s Organics is unique in the Ontario market for offering retailers an organized, solution-based approach to purchasing certified-organic fresh fruits and vegetables.

In Ontario, grocery retailers basically have three choices if they want to purchase

Organic Growth: Packing a Snack

certified-organic produce: directly from farmers; in person at the Ontario Food Terminal

Recognizing the market’s lack of

sight-unseen. They trust M&M reps to accurately assess the freshness and quality of

high-quality certified-organic snacks,

certified-organic produce arriving daily at the company’s distribution warehouse.

M&M in 2008 developed a 21-SKU line

It’s a daunting task, as M&M reps must thoroughly understand the esthetic and taste

of dried fruits, nuts, seeds, and mixed

variations of more than 300 fresh organic produce items. Standing by is a fleet of

nuts and fruit snacks. The line features banana chips, gogi berries, Brazil nuts, chocolate covered almonds, and such mixtures as Sierra Mountain Mix and Goji Sport Mix.

(OFT); and over the phone from Mike and Mike’s Organics.

M&M sales reps are in daily contact with retail customers who place their orders

seven temperature-controlled trucks that deliver orders directly to stores across the Greater Toronto Area (GTA), six days a week.

Mike Fronte says that as demand for certified-organic produce soars, he’s seeing more conventional produce distributors now offering organics. The selection tends to be on high-volume, fast-moving commodities such as broccoli and strawberries, which are a

Organic snacks have so much growth

challenge for M&M to price match. M&M’s strategy is to put less emphasis on those items

potential at the retail level that Fronte

in times of abundance in order to avoid margin erosion. During times of scarcity, however,

and Dattoli expect the category to account for much of M&M’s new growth going forward. The snack line, which recently underwent a change in name from Organic Select to the Mike and Mike’s Organics brand, offers retailers a

M&M is usually able to source these commodities due to strong grower relationships.

“We continue to stress the fact that we are 100 per cent organic, 12 months of the year. We don’t moonlight in organics; we don’t bring in organics only when it’s convenient,” says Fronte.

M&M also offers an unconditional guarantee that allows customers to return

huge advantage over non-branded bulk

any unsatisfactory product. Says Mike Dattoli: “Our customers know that if they’re

organic snacks because it’s being

going to shop organic, they’re going to come to us first because of the

marketed under a trusted brand name.

variety and selection.”

Another advantage is innovative

Strength in Numbers

packaging. M&M recently added a second packaging line to its production facility, so that it can now offer certified organic snacks in convenient stand-up, re-sealable

Mike and Mike’s Organics sources more than 300 fresh, certified-organic fruits and vegetables from reliable growers in Ontario, Quebec, the United States and internationally each week. The company is always

zip-top pouches. (See “Laying the Foundation for Growth.”)

48

1 0 Ye a r s S t r o n g

looking to establish strategic partnerships with growers, with an eye to securing uninterrupted supply.

Last year, M&M entered a supply partnership with Organic Girl, a Salinas, Calif.-based packaged salads provider. M&M was impressed with Organic Girl’s

M&M’s Top-Selling Certified-Organic Produce

quality and innovative packaging, and now distributes at least 21 Organic Girl SKUs, including Baby

Bulk oranges, apples, pears, avocadoes and kale Mike and Mike’s Organics brand ginger, garlic and shallots

Kale, Mache Blend and Supergreens.

Another important partnership is with The New

Exclusive to Mike and Mike’s

Farm in Creemore, Ont. When owners Brent Preston

Organic Girl Salads New Farm Tasty Jade cucumbers Mike and Mike’s Organics 21-item snack line

and Gillian Flies approached M&M with an offer to supply organic mixed salad greens, Fronte and Dattoli instead suggested that the unique Tasty Jade variety of English cucumber might be a better option. Not only did The New Farm establish a new, reliable income stream, but the deal allowed Preston and Flies to invest in new infrastructure (i.e., hoop houses).

LAYING THE FOUNDATION FOR GROWTH A second packaging line means more options for retail customers.

Mike & Mike’s Organics has more than doubled the size of its Woodbridge, Ont., facility to 43,000 sq.ft., which adds more storage and refrigeration room for its bulk certified-organic produce business.

The company has also added new state-of-the-art, automated flow-wrapping equipment, which enables the packaging of fresh items – such as cucumbers, peppers,

Industry Certification:

avocadoes and zucchini – in different sizes and types of

M&M is the largest certified-

packages for retailers’ private-label programs. The innovative

organic food distributor of its kind in Ontario, and the only

wrapping keeps items fresher longer, helps retailers boost

exclusively certified-organic

consumer purchases of certified-organic produce, and allows

non-farm-based produce distributor in the province.

retailers to better differentiate organic from conventional

warehouse and distribution facility is a CSI Certified organic

Altogether, M&M has invested more than $1 million into rebranding, expanding and re-packaging, all with an eye to

operation.

Mike and Mike’s supports two foodrelated charities –The Second Harvest Food Bank, which receives more than

produce when scanning at the checkout.

M&M’s Woodbridge, Ont.,

A SOCIAL MANDATE

helping retailers add unique options at store shelves.

“I think you need to be creative,” says Mike Dattoli.

10,000 pounds per month of “less than perfect” certified-organic food, and North York Harvest Food Bank.

At its Woodbridge, Ont., facility, M&M diverts 86 per cent of waste

“Our new packaging machine helps us stay ahead of the

to recycling and composting. It

curve, and helps give our retail customers a different way

operates an in-house recycling

to sell a product each week, whether it’s to put it in a clamshell, a bag, or something

program that separates five streams –

different from their competition.”

paper/cardboard, metal, plastic, glass and organics. Food that is no longer

Refreshing the Brand

suitable for sale is diverted to an

Mike and Mike’s recently underwent a rebranding that brings its B2B fresh, certified-organic

organic waste stream, which is

produce distribution business, as well as its B2C packaged fresh and packaged dried fruit

collected weekly and composted.

and nut snacks, under one brand: Mike and Mike’s Organics.

The Mike and Mike’s Organics brand launched this fall with the tag line “We are all organic.” The comprehensive marketing plan features a redesigned logo, updated website and truck wraps.

Industry Best Practices Mike and Mike’s is an active member of the following organizations: Organic

M&M is focusing on sales and marketing initiatives at store level, with the goal of

Council of Ontario, Foodland Ontario

educating consumers about the benefits of certified-organic produce. This includes

program, Canadian Health Food

partnering with Organic Girl to hire in-store brand ambassadors who provide

Association, Ontario Produce Marketing

information to consumers about certified-organic greens.

Association, Canadian Organic Trade Association, and the Fruit and Vegetable

1 0 Ye a r s S t r o n g

Dispute Resolution Corporation.

49

Congratulations

Mike & Mike’s on 10 years! from your friends at

Please contact us for any of your transportation needs.

Dave Berman 416-642-5128 dberman@somervilleauto.com

Fiona Ruffolo 416-642-5143 fruffolo@somervilleauto.com

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M&M’s nimble approach to special requirements Mama Earth Organics delivers fresh organic food baskets – contain-

being delivered is always fresh

ing fruits, vegetables, coffee, eggs and other products – right to

and always on time,” she says.

customers’ homes throughout the Toronto area. They began

Mama Earth has compli-

sourcing from Mike and Mike’s Organics about six years ago,

cated needs when it comes to

according to Mama Earth co-owner Heather Billingsley.

supply, Billingsley explains.

“Ordering through Mike and Mike’s is seamless. The product

Customers can tailor their weekly food basket delivery, and they’re allowed to change their order as late as the day before it’s

M&M encourages healthy food choices by offering employees the opportunity to participate in a bi-weekly food bin program featuring a wide selection of affordable, fresh, certified-organic produce at 20 per cent below cost.

delivered. That means Mike and Mike’s must be in daily contact with Billingsley and her team, and be very nimble and responsive to last-minute changes.

“We’re very different from a grocery store. We don’t want to have leftover product at the end of the week, and our inventory is always changing,” Billingsley says. “Mike and Mike’s is always able to exceed our expectations, and they’re willing to work with us on our special requirements. They’ve actually helped us grow our business because we can rely on them to always deliver.”

51

CANADIAN HEALTH FOOD ASSOCIATION - EAST CONFERENCE AND TRADE SHOW September 11-14, TORONTO

grocerybusiness.ca

November | December 2014

55

Supermarket lighting, for every part of the supermarket.

Hornet速 HP & Fiato速 Accents, SlimBar, Producer速, Hornet速 HP Pendant.

Discover what the right light can do for your business at amerlux.com/supermarket.

UNITED GROCERS INC. AWARDS OCTOBER 23, 2014 – TORONTO

Denis Gendron, president of United Grocers Inc., and his staff, welcomed guests to a gala evening to recognize vendors for professional excellence.

HAIN CELESTIAL (YVES VEGGIE)

OFFICE MAX (GRAND & TOY)

Best New Supplier – Fresh Departments: Hain Celestial (Yves Veggie) Pictured (l-r): Ken Clark, Overwaitea; Colleen McDonald, Hain Celestial; Glen Fowlie, Hain Celestial; Judy Jackiw, The Grocery People

Best New Supplier – Services and Equipment: Office Max (Grand & Toy) Pictured (l-r): Joyce Young, H.Y. Louie; Kent Barr, Grand & Toy; Siva Sivaraj, Grand & Toy; Dan Bregg, Buy-Low Foods

ITALPASTA

NOVELIS (REYNOLDS)

Best Private Label Supplier: ItalPasta Pictured (l-r): David Chapman, ItalPasta; Jenny Longo, Longo’s; Frank DeMichino, ItalPasta; Lyne Jette, Metro Inc., Private Label

P H O T O S : R O D N E Y D AW

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November | December 2014

Special Recognition Important Partner/Supplier: Novelis (Reynolds) Pictured (l-r): Tom Mainville, Co-op Atlantic; Dave Graham, Novelis (Reynolds); Al Hollman, Federated Co-operatives Limited

DINNER KRUGER PRODUCTS L.P.

Anthony Longo

Denis Gendron

Partnership/Most Valuable Performance: Kruger Products L.P. Pictured (l-r): Blendle Scott, Overwaitea; Steeve Lamontagne, Kruger; Michel Manseau, Kruger; Matt Blixt, Kruger; Ron Welke, Federated Co-operatives Limited

CONAGRA FOODS

Innovation Award: ConAgra Foods Pictured (l-r): Mike Vargas, H.Y. Louie; Sanaa Zahedi, ConAgra; Quinn Brodie, ConAgra; Dave Chatyrbok, The North West Company

HANDI-FOIL

Best New Supplier – Grocery: Handi-Foil Pictured (l-r): Brenda Kirk, Overwaitea; David Sarnoff, Handi-Foil; Harpreet Ferron, Longo’s

Sign up for our free weekly digital edition.

Send your request to: info@grocerybusiness.ca

LIST IT

AS SEEN @

The Canadian Health Food Association’s annual trade show and conference (September 17-20) was a showcase for the unique flavours and food trends that are emerging in North America and beyond. Flavour profiles ranging from the exotic to the sublime had great appeal. The products showcased here represent some of the key trends shown.

Fabulous fermented flavours Ontario Natural Food Co-op Organic Sauerkrauts include finely sliced, fresh seasonal vegetables that have been slowly fermented, resulting in a product deep in flavour. An excellent condiment or side dish, in a variety of flavour combinations. ontarionatural.ca

Raincoast Crisps On-the-Go New from Lesley Stowe Fine Foods is Raincoast Crisps On-the-Go, a convenient portable snack size for enjoying with soups or salads, or on their own.

These artisanal crisps are made in small batches with visible and familiar ingredients like cranberries, hazelnuts, pumpkin seeds and flax seeds. lesleystowe.com

Canada’s super oil High in Omega 3 and Vitamin E, coldpressed Three Farmers Camelina Oil is known as Canada’s super oil due to its versatility, balanced omegas and a light sweet/nutty taste profile. This oil is perfect for salads, dips and dressings, and unlike olive oil, is stable enough to cook at high temperatures. threefarmers.ca

Healthy Frozen Treats DeeBee’s TeaPops combine 100 per cent certified organic fruit and organic tea for a healthy frozen treat.

TeaPops are non-GMO, kosher parve, vegan, and free of gluten and dairy. deebeesorganics.com

It’s a fine brine Wildbrine uses fresh produce and natural, wild fermentation to produce savoury and probiotic sauerkrauts, kimchi and unique fermented salsas.

Fermented products are known for their probiotic benefits. All Wildbrine products are raw, live, non-GMO certified, gluten-free, and vegan. wildbrine.com

Stylish food storage Shaped and coloured like green apples, Preserve food storage containers are versatile, durable, stackable and dishwasher safe.

They’re made from 100 per cent recycled BPA-free plastic and post-consumer recycled paper. preserveproducts.com

Make mine Mackie’s Mackie’s Crisps are distinctively Scottish premium crisps produced using a unique method that creates an outstanding flavour and crunch. With special Scottish seasonings—including Haggis & Cracked Black Pepper, Whisky & Haggis and Flamegrilled Aberdeen Angus – Mackie’s Crisps have captured the culinary curiosity of consumers worldwide. www.mackiescrisps.co.uk

grocerybusiness.ca

November | December 2014

63

LIST IT

New & now discoveries

Spread the word!

Black Diamond Cheese Spreads now come in two new great tasting flavours: Jalapeno and Herb & Garlic. These versatile flavours are unique to the cheese spreads category and satisfy different consumer needs (spicy versus mild).

Conveniently packed in a re-closable container and found in the refrigerated section of the grocery dairy case, Black Diamond Cheese Spreads will become a new family favourite. blackdiamond.ca

Soup sales heat up Happy Planet introduces two new chicken soups just in time for fall and winter: a gluten-free, green currybased, all-natural Thai Chicken, and a soul-warming organic Kawartha Chicken Noodle. Full of all-natural ingredients and made without any preservatives, these new soups are the only retail fresh soups in Canada made with 100 per cent organic chicken. happyplanet.com

New Kolbassa products from Piller’s Simply Free Piller’s Fine Foods combines its traditional European sausage-making practices with modern innovation with the addition of two new kolbassa products to its gluten- and allergen-free Simply Free line. Both the Piller’s Simply Free Kolbassa meat sticks and sausage pieces are made from pork and natural ingredients, and are free of all major food allergens. pillers.com

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November | December 2014

Power up the produce aisle POM Wonderful introduces a new line of Antioxidant Super Teas that combine the antioxidant power of premium 100 per cent pomegranate juice with gently brewed teas. Flavours include Pomegranate Lemonade Tea, Pomegranate Sweet Tea and Pomegranate Honey Green Tea. POM’s Pomegranate Peach Passion White Tea joins the line with a fresh new look and convenient size. pomwonderful.com

Turn up the heat Maison Orphée’s organic Sunflower Cooking Oil is a delicately flavoured oil that uses top-quality sunflower seeds and is especially formulated for high-temperature frying and sautéing. maisonorphee.com/en

Fisherman’s Friend ready for cough season Fisherman’s Friend is Canada’s leading brand in the throat lozenge market, with more than 40 per cent of package sales. Fisherman’s Friend helps build sales with national TV advertising throughout the November to March 2015 cough, cold and flu season. POP displays are also available. fishermansfriend.ca

grocerybusiness.ca

November | December 2014

65

it figures

Super Snacking

SNACK ATTACK

42%

of consumers are replacing breakfast with a snack

43%

are replacing lunch with snacking

34% #1 PREFERRED SNACK

chocolate

fresh fruit

of Millennials

of Boomers

65% 70% Takeaway Millennials tend to snack more for indulgence while aging consumers prefer healthy and fresh products. Knowing your store’s demographics is key to maximizing your returns.

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November | December 2014

are using snacks to replace dinner

Takeaway For today’s on-the-go consumer, snacks make a portable, convenient meal alternative. This is a great opportunity for grocers to showcase more nutritious snacks, which means a higher basket ring.

%

of Canadians choosing snacks with:

65% 65% 63% High Fiber

Natural Flavours

Low Sodium

Takeaway Health is the #1 concern and key motivator of Canadians, which is key when innovating or designing planograms.

38%

of consumers prefer snacks with ingredients that are sourced sustainably

26%

will pay extra for snacks sourced sustainably or that have a Fair Trade designation Takeaway Socially responsible causes translate into brand loyalty. And while consumers may be willing to pay extra for these products, they are also deal-sensitive and will respond to promotional activities, displays and coupons.

55% of consumers know what they intend to purchase in-store

Takeaway The flip side is that 45% of people shop more impulsively. To increase trial and grow the basket, create in-store snacking displays in alternative sections of the store.

OVERALL TOP SNACKING ITEMS »» Fresh Fruit »» Chocolate »» Chips/Crisps »» Cheese Takeaway The snacking competitive set includes a wide array of items from fresh to confectionery, so redefine the snacking category to include fresh as well as indulgent items.

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

grocerybusiness.ca

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

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67

Perry’s Point of View

IT GETS BETTER As a tumultuous year ends, grocery retailers can expect the market to settle down a bit in 2015.

It’s no secret that 2014 has been one of the worst years for suppliers to the Canadian grocery business. A spike in food retail square footage growth caused an intensely competitive marketplace, particularly in Ontario. A weak Canadian dollar hurt gross margins. And retail consolidations caused operational confusion and placed big pressure on suppliers to write cheques for targeted synergy savings. On top of that, overall tonnage at the primary trade customers was very weak, and the growth moved to more difficult, and sometimes more complex, retail channels such as club, dollar, ethnic and specialty.

Macro industry conditions will improve in 2015. Sobeys’ tough decision to remove 50 stores from their new network, combined with the arrival of Target’s food footage, will drop square footage growth in 2015 to a more sustainable level that is much closer to consumption growth. As a result, the need to defend traffic with hot weekly specials will abate.

The Canadian dollar will remain weak, but the year-over-year impact will ease by the first quarter of 2015. Food inflation has begun to appear in some items in selected markets, and this will spread as competitiveness

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November | December 2014

eases. Not only will costs stabilize, but getting net effective price increases may once more be possible.

The channels should also begin to improve.

The big consolidations will begin to settle out by early 2015, and those channels and programs should begin to clarify. As Loblaw and Sobeys begin to understand better the nature of their purchases, there is a chance for recent tonnage weakness to reverse. The discount channel appears to be flattening, and everyone is investing again in conventional formats, where pricing is not as much of an issue.

Although there are no signs at this writing, Target almost can’t get worse – any improvements they can engineer could provide a much-needed new growth channel.

Ethnic is still on fire, and most suppliers are beginning to figure out how to tap into these complex and disparate organizations. The rapid rise of the natural/organic space is another new channel not dependent on price, and slightly less complex. Walmart has new management with a stronger focus on food, and Costco is still…Costco.

Despite the western economies being reliant on oil, recent shocks should not materially weaken the regions’ spending power, and a

stable U.S. economy and low Canadian dollar should be good for the manufacturing base in the east. Consumer confidence is generally high, and unemployment has been improving. The overall market improvement won’t come quickly, and won’t be comprehensive. The Ontario market will remain competitive for quite a while – consumers have seen other household expenses rise and still look at food as a place to save when times are tight. Larger trade partners are always more challenging, and tonnage growth will always be tough in a mature market. But congratulate yourself on surviving one of the worst years on record, and let’s all look forward to an improving marketplace.

Perry Caicco is the managing director for CIBC World Markets. His experience includes 15 years in the supermarket, general merchandise, and packaged goods industries with companies such as Coca-Cola, Consumers Distributing and Loblaw Companies Ltd. Perry is a founding member of the Grocery Business Advisory Board.

MONDELEZ Easter 2015 Your Customers will LOVE our new hard shell packaging!

• New packaging:

• Improved scanability

• Improved product protection • We turned FUDGEE-O (the 4th ranked brand in core cookies) into an egg this Easter!1

NEW Easter Morning Gifting!

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Contact your Mondelez Canada representative at 1-855-219-6672 or your wholesale representative for further information.

1

Subject to change.

Nielsen Answers, Total CANADA GB+DR+MM Jan. 1, 2013 to Dec. 28, 2013

Better, Healthier Snacks in convenient, ready-to-go packages

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