March/April 2017

March / April 2017 Vol 7 | No 2 $9.95

Thrifty Foods

Celebrates 40 Years

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+produce

PM # 42211029

MANAGER

WHOLE HEALTH NEED-TO-KNOW

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Grocery Business March | April, 2017 Volume 7, Number 2

contents

Blue Rodeo performs at the Night to Nurture Gala

DEPARTMENTS 7

Front End People & News

12

Open Mike

Is the online investment worth it?

18 Deloitte

Grocery retailers respond to the digital age

19

Perspective

It’s time for a “Universal Venue”

73

Launch It, List It

80

It Figures

82

In Other Words

New & now discoveries

Premium products pack a punch

Costco Canada’s 2017 expansion plan

11 4

March | April 2017

ON THE COVER Foods 21 Thrifty Celebrates 40 Years

47

76 45 FEATURES

WHOLE HEALTH REPORT

16 Metro Inc.’s

31 In-person is Simply Better 35 Digestive Health 36 Trade Show Trend

Responsible

Procurement Policy

43

Exit Interview

45

Making It

75

Pierre Charron

Lee’s Provisions

Spring Into BBQ

Toppers

36 37 37

SANA Show Stoppers

49

Celebrating 150 Years of Fresh Food in Canada!

53 56

Fresh & Hot

Organic “Need to Know”

Growing From the Ground Up

Sweet on Sour

PHOTO GALLERY 76 Night to Nurture Gala

C O V E R P H O T O : C O U RT E S Y O F T H R I F T Y F O O D S

grocerybusiness.ca

57 tasteus.com

tasteUSFoodBev

March | April 2017

5

“They want to know the story behind the numbers – FCC wants us to be successful.”

Dan Flanagan, President Flanagan Foodservice Food Distribution

Agribusiness and Agri-Food

The food business is unique Your financing should be too Grow with a lender who understands Canadian food. With over 100,000 customers, big and small, and a portfolio that tops $30 billion, Farm Credit Canada can help build your business success story.

fccfinancing.ca

Front End

Transitions

In Memoriam

Sandra Sanderson has left

Duncan Mac Naughton, a

Walmart Canada, where she

former Walmart Canada

was chief marketing and

executive, has joined the

quality officer, to join White

Family Dollar retail chain

House Black Market in

as president and chief

Fort Myers, Fla., as senior vice-president

operating officer, with responsibility for

of marketing. Sanderson will report to

overseeing all banners, including Dollar

Shelley Broader, who previously headed

Tree, Family Dollar and Dollar Tree Canada.

up Walmart Canada.

His most recent position was as CEO of Mills Fleet Farm.

Charles McKague Charles LeRoy McKague passed away peacefully on February 27, 2017 at age 83. McKague’s distinguished career in the Canadian grocery industry included leadership roles at A&P Canada.

PepsiCo has appointed Greg Lyons chief

U.S. Foods Holding Corp.

marketing officer for North

has appointed Andrew

American beverages.

Iacobucci chief

Previously, Lyons was

merchandising officer. Prior

senior vice-president of marketing for

to joining U.S. Foods,

PepsiCo, and was vice-president of

Iacobucci was executive vice-president,

marketing, PepsiCo Beverages, PepsiCo

merchandising, for retailer Ahold USA.

Canada, from 2011 to 2013.

“I’d known Charlie for many years and always held him in the highest regard,” says Don Harrison, retired chairman of William M. Dunne & Associates. “He was a man of great personal integrity. His word was his bond.”

Etalex appoints Sandy Casaluce in Toronto and Glen Bailey in Calgary Sandy Casaluce has joined the Etalex sales team in Toronto as an Account Manager, and will work closely with Joe Doan, Account Sandy Casaluce Joe Doan Manager with Etalex since spring 2014.

They both bring over 12 years of experience in shelving and specialty display systems. Doan has been a vital part of growing the business in Ontario, and Casaluce will look after existing accounts and assist him with business development.

grocerybusiness.ca

Glen Bailey has been appointed Western Canadian Account Manager.

He brings over 20 years in key account management in office products with retail and commercial accounts. He is based in Calgary and will look after Glen Bailey existing accounts as well as business development in the territory.

Etalex is the largest manufacturer of store fixtures and storage systems in Canada. Based in Montreal, it has been providing retail and racking solutions since 1966.

March | April 2017

7

THIS EARTH MONTH,

THE PLANET WILL PROSPER. AND SO WILL YOU.

For Earth Month, EnviroCare® will feature an on-pack promotion offering consumers a chance to win a trip and exciting prizes. There’s never been a better time to stock up on EnviroCare® because there’s never been a better time for customers to buy premium quality EnviroCare – made from 100% recycled paper.

Registered trademarks of Kruger Products L.P. © 2017 Kruger Products L.P. ®’ used under licence.

®

Front End

Canadians at the Food Marketing Institute Mid-Winter conference

Horizon Group of B.C. to buy Ontario Natural Food Co-op The Horizon Group of western Canada is acquiring the business and key assets of the Ontario Federation of Food Cooperatives and Clubs, Inc., operating as the Ontario Natural Food Co-op (ONFC).

The acquisition would be an important step toward preserving a strong Canadian natural and organic food distribution system in the province of Ontario, said ONFC general manager Randy Whitteker.

Under the agreement, Horizon Group’s Ontario operations would remain at the existing location in Mississauga, Ont., he adds.

Anthony Longo, Longo Bros.; Art Smith, GS1

March | April 2017 Volume 7, Number 2

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

grocerybusiness.ca

Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Angela Kryhul, Sally Praskey Contributors Marie-Claude Bacon, Dr. Sara Celik, Sandi Hester, Dave Lank, Ron Lemaire, Tia Loftsgard, Michael Marinangeli, Maria Proulx, Bonnie Schiedel, John F.T. Scott, Judy Sharpe, Steve Watt, Marty Weintraub

David Wilkes, Retail Council of Canada

Grocery Business Advisory Council 2017

Bill Ivany, Tree of Life Canada

Shaun McKenna, Acosta Sales & Marketing Thomas A. Barlow, Canadian Federation of Independent Grocers Perry Caicco (retired, CIBC) Jim Slomka, Clorox Canada

@grocerybusiness

grocerybusiness.ca

Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Publications Mail Agreement No. PM42211029 ISSN 1927-243X

Mary Dalimonte, Sobeys Cori Bonina, Stong’s Markets

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

Denis Gendron, United Grocers Inc. © Copyright 2017. All rights reserved.

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

GST Registration No. 83032 6807 RT0001

Mike Longo, Longo Brothers Fruit Markets Michael Marinangeli, MIDEB Consulting Inc. Darrell Jones, Overwaitea Food Group Cheryl Smith, Parmalat Canada

Creative Agency Boomerang Art & Design Inc. boomart.net

Founded in 1976, ONFC employs more than 120 people and counts buying clubs, local co-operatives, natural food retailers, restaurateurs and caterers among its 1,500 members and customers. Its annual sales approach $55 million, and it owns the Black River Juice Company Limited and the Ontario Natural Food Co-op brands.

Whitteker said a number of reasons led to the board’s decision to seek a larger partner to maintain service for independent and other organic and natural retailers in Ontario,

Kevin Smith, Grocery Business; Eric Claus, Save-a-Lot

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

including recent pressures in the organic and natural food industry, the co-operative’s expansion during this time, and a strong U.S. dollar impacting the cost of imported products.

Sign up for our weekly digital edition at

grocerybusiness.ca

March | April 2017

9

Front End

Michelle Scott announces retirement from The Grocery Foundation Michelle Scott has announced her retirement as executive director of The Grocery Foundation, a position she has held for the past six years.

funds are most effectively used in its mission of feeding hungry kids, Longo said. Prior to joining the Foundation, Scott was vice-president, events and Grand Prix, at the now dissolved Canadian Council of Grocery Distributors (CCGD).

“Michelle has done an exceptional job of leading the Foundation,” The Grocery Foundation chair, Anthony Longo, said in a letter to the grocery industry. “Michelle is a true friend of our industry and the children we serve.”

Scott will remain with the Foundation until the end of October 2017, Longo said. “I am confident that every member of this industry joins me in offering her our most sincere appreciation for her dedicated years of service.”

During her tenure as executive director, Scott restructured the Foundation’s signature Night to Nurture gala, revitalized the Toonies for Tummies program, and developed processes to ensure that Foundation

The Foundation’s board of directors will be developing a process to hire a new executive director.

MEGA DEALS Coming to

Canadian Health Food Association West April 8 & 9, 2017 Discover our portfolio of exciting show deals – MEGA DEALS will only be available during show hours UNFI Introduces our show partner and Canada’s organic fresh food leader PRO Organics

Come visit UNFI and Pro Organics at booths 1527 & 1627 Take advantage of our show deals and MEGA DEALS 10

March | April 2017

Galleria Supermarket’s Lunar New Year Hot Pot Banquet Galleria Supermarket in Don Mills, Ont., welcomed the Lunar 2017 New Year by hosting a hot pot banquet where guests sampled an “Asian fondue” featuring classic hot pot dishes from China, South Korea and Japan. Sharing hot pot is a popular and essential part of the New Year’s ritual across Asia, meant to bring good luck, peace and happiness to the entire family.

Front End

Walmart debuts new

high-tech Supercenter Wal-Mart Stores, Inc., has opened a new 190,000-square-foot high-tech Supercenter in Florida featuring innovations such as Mobile Scan & Go and an Interactive Product Education Table.

The new Lake Nona location has also dispensed with the usual Supercenter on-site restaurant and instead has partnered with Miami-based organic restaurant, Grown, which planned to open an outlet at the front of the store.

Among the new technologies employed at the store: Mobile Scan & Go: Instead of standing in checkout lines, customers can immediately scan and pay for items with the Walmart Mobile Scan & Go app on their phones while shopping in the store. The Lake Nona Walmart is the second store in the U.S. to use the app.

High-tech customer table: The store features an interactive table – dubbed the Interactive Product Education Table – which displays product advertisements and information when customers wave their hand over the table. The technology uses digital live projectors that can sense movement,

detecting the pixels selected with a swipe of a hand.

Pick-up service: The store includes a drive-thru that allows online customers to have their purchases delivered straight to their cars.

The Lake Nona store also features clerestory windows that allow more natural light, along with combined departments to create a better flow and clear signage.

Open Mike

Online grocery shopping

Is it worth the investment?

By Michael Marinangeli

Online grocery shopping has been around for over 20 years. Yet, it still represents only about one per cent of the grocery business in Canada, three per cent in the U.S., and four per cent in the U.K., according to the grocery e-commerce report issued last year by BMO’s Peter Sklar. The analysis also mentioned a Mintel report that found 88 per cent of Canadian grocery shoppers have never tried online ordering, and 68 per cent are not interested in it at all. The grocery industry seems to be badly lagging other retail segments such as clothing, electronics, shoes and sporting goods, which are much more developed and have experienced exponential growth over the past few years.

At the recent FMI Winter Conference, a panel of experts made the following predictions for online grocery shopping:

Greater Toronto market since 1999. Loblaws and Walmart have offered click-and-collect since 2014 at selected locations. In addition, Walmart recently announced that, after testing grocery delivery in three Toronto condos, it will take the service to more homes in the city core. Throughout Canada, other grocers, including Overwaitea, Thrifty Foods and IGA in Quebec, provide an online service as well. Metro has announced it will be launching this service soon in Quebec.

But grocery retailers have been slow to embrace online grocery shopping for two simple reasons:

• Grocers will move more aggressively to digital by 2025.

• In the next decade, online grocery shopping will reach maturation in the U.S. • Centre of the store will shift to online more rapidly than other departments.

• Online grocery shopping in the U.S. could reach $100 billion in the next eight years, equivalent to the volume of 3,900 stores.

• 25 per cent of U.S. shoppers will buy groceries online.

• 60 per cent of consumers who buy online will spend 25 per cent of their food dollars online in 10 years.

All eyes are on Amazon, which seems to be pulling out all the stops to penetrate the large grocery market. We have witnessed the tremendous success that Amazon has had in recent years in expanding its online business in other retail segments. If it gains a similar foothold in the grocery industry, the impact could be catastrophic to existing grocers. Amazon could be a major disrupter in the grocery business. Some say it is contemplating a new grocerystore concept in which a staff of robots grab and bag groceries for shoppers. Robots and possibly the use of drones, if executed successfully, would change the dynamics and economics of online grocery shopping, making the concept more viable.

Time will tell whether the bold predictions for online grocery shopping hold true. I am skeptical that it will ever be a large segment of the Canadian market. It will service a niche and be a small part of the grocery sector. Canada‘s vast geography and small population with limited major urban centres make the economics challenging.

In Canada, the two main types of online grocery shopping provided to consumers are home delivery and click-and-collect (order online and pick up the assembled order at the store). Longo’s, through its Grocery Gateway service, has been providing home delivery in the

12

March | April 2017

1. Consumer demand has been weak.

2. The economics of providing this service in a cost-efficient manner are challenging.

Open Mike

Pros and Cons of Online Grocery Shopping Pros Consumer • Saves time • Reduces costly impulse buys • Reasonable fees • Online specials available • No crowds • Convenience • Efficient websites and smart phone apps

Retailer • Protect market share • Attract more profitable customers • Build store loyalty • Defend against retailers that provide this service • Part of an omni-channel marketing approach

Cons Consumer • Fees • Can’t hand-pick perishables • Delivery windows can be narrow or inconvenient • More difficult to cherry-pick and ad-match • Less assortment • Missing out on other services (floral, HMR, pharmacy, etc.)

• No last-minute additions • Plenty of grocery stores and formats in close proximity • No savings

Both click-and-collect and home delivery are inefficient and costly, with numerous consumer and logistical issues. I consider online grocery shopping more of a defensive play than an offensive one.

You can’t allow your competitors to steal market share from you.

You also can’t be caught flat-footed and allow others like Amazon to gain a significant share of the market without resistance.

Most customers today aren’t interested in this service. However, you need to be prepared in case they change their minds as some pundits have predicted. Don’t be surprised if analysts tout significant doubledigit sales increases over the next few years as retailers expand their

grocerybusiness.ca

Retailer • Expensive and inefficient • Most customers aren’t interested • Profitability not assured • Logistics complexity • Perishables handling • Population size doesn’t warrant the service

e-commerce service. Remember, these percentage gains are off a very low sales base and are not as compelling as they seem.

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.

March | April 2017

13

INCREASE MEAT SNACKS VOLUME!

Q&A MIKE RAKIC

Meat Snacks provide sizeable ways for retailers to build a destination category that drives volume and profits. With huge upside potential in reaching more Canadians and increasing its shopping frequency, meat snacks have more than enough room to grow.

Shoppers are seeking higher-protein snacks and are very open to making a meat snack purchase.

How can you capture that growth potential and build a destination within the wall of your stores?

Identifying Unmet Needs: To start, it is imperative to identify and strategize against unmet category needs. Category trends and analysis show that there are several unmet needs in today’s market: • Healthier protein options • New occasions • Portable solutions for on-the-go consumers There is a big opportunity to drive explosive growth by meeting these needs across the store and leveraging the versatility of meat snacks. But how do you engage with consumers, meet their needs and drive growth?

Master Merchandising Efforts: The number one barrier to meat snack purchase is that half of consumers don’t think about the category. To help overcome this, start by surrounding shoppers in-store with multiple merchandising touchpoints.

In-line sets, secondary displays and checkout locations all help to capture sales for both planned and impulse purchases.

Of meat snack

56%

purchases are made outside the aisle!

Of shoppers don’t

50%

decide to buy the category until they are inside the store.

*25% said a display influences a purchase

Mike Rakic, Vice President and General Manager at Jack Link’s Canada, shares some insights into how to expand the meat snack category’s presence, making it top of mind and a destination for a growing population interested in protein-based snacks.

Q: What are the key attributes necessary to make meat snacks a destination category at retail?

There are two attributes that retailers need to focus on to make meat snacks a destination category at retail. First, meat snack sets must expand their holding power to drive more shopper’s awareness of the category. The category still trails all other salty snack categories in penetration, yet it is growing much faster that other salty categories.

Secondly, as a high-impulse category, retailers should create a permanent secondary location for meat snacks. Jack Link’s has partnered with many retailers to install state-of-the-art merchandising racks that optimize sales and simplify the shopping experience.

Retailers that are getting more than their fair share of this growth category have meat snacks and Jack Link’s jerky placed on the frontend check lanes.

Q: How big is the potential opportunity for retailers committed to building a presence and using innovation to make meat snacks a destination?

As the category leader, it is our obligation to invest in innovation to keep the category healthy and growing. Going back to the protein trend, when we compare meat snacks to other protein snacking categories, the opportunity to grow share of stomach with consumers is incredible. Innovation will also help us grow the category, and we have an exciting pipeline for 2017. The category, in many channels, continues to be under-spaced based on sales. Expanding sets will drive awareness, and it will allow for the innovation to truly deliver incremental growth for the category.

Q: How can retailers best partner with Jack Link’s to drive these efforts?

19%

32% Purchase from main set

Saw a display and reminded them to purchase

Notice meat snacks right next to the check out

44% Generate interest and attention to help generate shopper interest in meat snacks consider: • Creating an in-store disruption to capture impulse sales • Using other high-traffic snack categories as an anchor • Driving awareness with signage and promotion • Merchandising in multiple locations

Jack Link’s has many resources to provide our retail partners with deep consumer and shopper insights, and recommendations to accelerate growth in the meat snack category. We are a relationshipbased company and believe the best way to do business is to create meaningful partnerships.

Q: What is YOUR favourite flavour and occasion for eating meat snacks and why?

My favourite flavour is Peppered Jerky and favourite eating occasion is anytime I crave a snack but love to feed my wild side on the golf course.

Sustainability

Metro Launches Responsible Procurement Policy Metro Inc. launched its Responsible Procurement Framework and Supplier Code of Conduct for responsible procurement in February 2017. The Responsible Procurement Framework aims to structure purchasing and optimize the implementation of responsible practices. The new Code of Conduct is meant to guide the business behaviours that Metro expects from its suppliers.

Marie-Claude Bacon, Metro’s senior director, corporate affairs, spoke to Grocery Business about what this new policy will mean for the retailer’s procurement practices.

Why is Metro addressing responsible procurement?

Which of Metro’s activities does the Framework target?

Adopting responsible procurement principles is a best practice in every industry. Around the world, businesses of all sizes are working to market products that are developed ethically, responsibly and sustainably. We see two key benefits to doing so: • A better grasp of the social and environmental impacts of our products, and management of potential risks in our supply chain (e.g., related to animal welfare, deforestation, respect for workers).

• Enhanced responsiveness to our customers’ expectations, since they want to know more about the products they consume, in terms of health and environmental impact.

The Framework will start by targeting Metro’s food-related activities. More specifically, it applies to the products sold in our supermarkets (Metro, Metro Plus), discount stores (Super C, Food Basics) and neighbourhood stores (Marché Richelieu, Marché AMI, Marché Extra) in Québec and Ontario.

We aim to extend the scope of the Framework to our other activity sectors.

What is the purpose of the Framework?

The Framework enables Metro to structure its responsible procurement activities, and define the purchasing criteria it will further take into account with its teams and suppliers.

16

March | April 2017

How long has this program been in the works?

Roughly 24 months. We started with a materiality analysis of our products, to deepen our understanding of our impact and our supply chain. We consulted with stakeholders across the spectrum – most importantly, with some of our suppliers – to understand where they were in the journey. We built the Framework with the support of the section VPs, and started training buyers in its use and applicability.

Sustainability

What key aspects of the program do vendors seeking to do business with Metro need to know?

Our Framework is based on four principles: • Business ethics • Contribution to socioeconomic development and respect for workers • Protection of the environment • Respect for animal health and welfare These principles will be reflected in Metro’s procurement policies (local purchasing and sustainable fisheries, which are already in place, and packaging optimization, which is currently being developed), as well as through purchasing criteria grids established for the central purchasing teams and suppliers.

How does this fit more broadly into Metro’s corporate responsibility strategy?

We launched a new five-year plan in 2015 for the 2016-2020 period with a focus on four main pillars:

• Delighted Customers • Respect for the Environment • Strengthened Communities • Empowered Employees Some initiatives of which we are particularly proud: 1. Our focus on local products and suppliers.

2. Our collaboration with food banks to implement a food recovery program across our network.

3. Our strong environmental results in 2016, surpassing our target to reduce energy consumption by 10 per cent from our 2010 baseline, and increasing waste diversion by more than 25 per cent over the same period.

4. Our Croque Santé/Green Apple School program, aimed at encouraging young people to eat more fruits and vegetables. Over the past five years, Metro has awarded over $7.5 million in grants to schools across Quebec and Ontario to promote nutrition and healthy eating.

C A T E G O RY C A P T A I N

RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERS STRATEGIC LEADERSHIP CONDIMENTS 2017 •

Golden Age of Condiments, Sauces and Dressings

1

Fueled by the cultural and economic trends, condiments have become the second largest specialty foods category in the United States2 and Canada3, trailing only cheese.

This unprecedented growth has unleashed a culinary arms race that is redefining dining experiences around the world. What a time to be alive!

Category Performance Today • In 2016, retail value of all types of sauces, condiments and dressings grew by 2%, reaching CAD 3.3 billion .

4

• Kraft Heinz is the category leader, with 51% $Shr5 across all category segments: Pasta Sauces (#1), BBQ Sauces (#1), Ketchup (#1), Dressings (#1), Viscous (#2).

CATEGORY GROWTH PROSPECTS • The growth of premium and superpremium condiments, sauces and dressings will be the key focus of innovation and future product changes.

OVERALL MARKET BY MARKET SEGMENT 20% TL Ketchup (Excluding Salsa) & Mustard

7%

• Health and wellness concerns will be a major cause of the shift in

TL Sauces - Barbeque

27%

TL Pasta Sauce

preferences when consumers will be choosing products.

• Increased consumer demand in

21% TL Viscous

25%

TL Portable Salad Dressing

STRATEGIC LEADERSHIP • 2017

variety/new flavours will play a critical role in shaping growth.

PREMIUMIZATION

Pasta Sauce is one of the fastest-growing segments within the Sauces, Condiments and Dressings category, driven by premium offerings.

CLASSICO Pasta Sauce is driving category growth.

PASTA SAUCE $ SALES (BY VALUE TIER)

Pasta Sauce category is +1.9% over the past 3 years, while CLASSICO is +14.3%, largely driven by

TL Super Premium Pasta Sauce $13MM

innovation (50% of the overall CLASSICO growth).

+17%

$ Volume CLASSICO vs.

All Other Pasta Sauce

5% 15%

TL Value Pasta Sauce $39MM

-4%

59% $96,573,192 $84,171,745

CLASSICO Pasta Sauce Other Pasta Sauces

$159,929,212

TL Premium Pasta Sauce $152MM

21%

+9% $162,900,851

TL Mainstream Pasta Sauce $54MM

-1% L52 2 YAGO

L52

MARKET FACTS

SUPER-PREMIUM INNOVATION

Consumers are increasingly looking

Restaurant Quality at Home

for restaurant-quality gourmet food.

They are much more concerned about food quality, and tend to choose more premium products with simple, fresh and healthier ingredients.

At the same time, money spent on food at home rose 10%, signaling a major shift in consumer dining behaviour.

NO PRESERVATIVES NO ADDED SUGAR GLUTEN FREE EXTRA VIRGIN OLIVE OIL SEA SALT

WELLNESS

Health and wellness concerns are a major cause of the shift in consumer preferences. Millennials are shaking up the food industry, demanding products that are low in salt, sugar or fat, rich in protein or antioxidants, or free of artificial flavours and preservatives, gluten or other ingredients.

New Design for the Leader in Shelf-Stable Dressings •N ew design clearly communicates Kraft Dressings are focused on providing no artificial flavours and colours within its portfolio.

•R efresh your shelf with this consumer-relevant and eye-catching packaging.

TOP CONSUMER NEEDS All Natual No Preservatives Simple Ingredients

In Dressings Segment, Refrigerated, healthy-perceived products are outpacing

55%

the overall segment growth, with

61%

Renee’s being a leader with 78% $Shr, +3.1% growth in 2016 vs. 2015.

63%

Nearly 70% of consumers demand greater transparency over ingredient contents, and 49% of consumers believe fewer ingredients in a product correlate to healthier food.

Source: Simple, natural and pure increasingly define perceptions of health, Mintel, Apr (Consumer - April 2016)

STRATEGIC LEADERSHIP • 2017

VARIETY

Consumers continue to demonstrate adventurous eating habits, and have an increasing desire to try new and unique flavours.

•7 5% of millennials say they want to experience more flavours in their everyday eating** • 71% of all consumers enjoy trying new flavours occasionally, while • 37% of consumers say they are increasingly driven to try new flavours* • 18% of consumers actively seek out new, bold flavours to try on a regular basis* Sources: *Flavor Consumer Trend Report 2013 – Technomic **Mintel Group Limited - Innovation on the Menu - Flavor Trends - June 2014

RISE OF ORGANIC EXPERIENCE

HEINZ brings a sophisticated Dijon flavour to the mustard category.

48% believe organic foods are healthier

• Dijon is on trend with consumer preferences, and is considered a better for you condiment.

3 9% believe they do not contain unnecessary ingredients

• No. 1 Canada grade mustard seeds.

44% of adult consumers are buying organic food or drinks for themselves or their household

2 2% believe they taste better than non-organic

NEW

Source: Organic Food and Beverage Shoppers – US, Mintel, March 2015

Kraft Heinz brands own the summer!

•G enerate excitement in-store with bold, show-stopping and summer branded BBQ displays and consumer favourite products.

M A K E YO U R SALES SIZZLE THIS SUMMER!

•C elebrate the summer with this leading annual in-store program, and drive the incremental sales.

MARCH TO

AUGUST 2017

Bloomberg Business Week, Oct 7, 2010 “Spreading the love” Bloomberg Business Week, Oct 7, 2010 “Spreading the love” 3 Nielsen GDM, L52, data ending Jan 31, 2017 1

4

2

5

Euromonitor report – Condiments, Sauces and Dressings in Canada, November 2016 Nielsen GDM, L52, data ending Jan 31, 2017

Deloitte

Grocery retailers respond to the digital age

By Marty Weintraub

The rapidly changing competitive landscape in grocery retail is forcing grocers to rethink how they do business in the digital age. With growing numbers of new, innovative companies entering the grocery space, it’s time for traditional grocers to embrace a new attitude toward risk and investment.

A CHANGING WORLD Technology and customers’ evolving behaviour have had a profound impact on grocery retail.

Customers increasingly want to purchase their food on their terms, whether that’s driving to the store, ordering online for home delivery, or grabbing a few items via mobile for click-andcollect pickup later. Today, convenience and flexibility are key differentiators – just as important, if not more, than price or selection.

This shift has also created opportunities for nimble startups to enter the grocery space, using the latest technologies to zero in on emerging customer needs. Technology has greatly lowered the barriers to entry for these new companies, which can build fit-to-purpose businesses without also having to manage networks of hundreds of stores and thousands of employees.

Grocery retailers eager to evolve their operations to meet customers’ emerging demands and address new competition are focusing on several key areas: Supply chain and fulfilment Customers want click and collect and home delivery, but these fulfillment methods come at a cost, so finding ways to remove costs from

18

March | April 2017

existing supply chains, store operations and inventory management is crucial.

Re-imagining store operating models As customers embrace alternatives to in-store shopping, grocers are rethinking the role of the traditional grocery store. For example, some retailers may redesign stores to serve as mini distribution centres focused on home-delivery and click-and-collect customers in addition to traditional shoppers.

Marketing Integration Today, grocery marketing is a complex, increasingly costly mix of print and electronic flyers, social media posts, app notifications and more. It’s a challenge to tell which channel is having an impact, so it’s imperative to find a solution that will connect the total marketing spend to customer purchases.

NEW CHALLENGES NEED NEW ATTITUDES Traditional grocery chains have responded to these new challenges, but progress is slow. To accelerate change, grocery companies must be willing to embrace new perspectives.

• Rethink the value proposition. The executive team may want to consider

whether their company’s value proposition suits a world where price and selection are no longer the primary key differentiators.

• Re-evaluate risk assessment and investment decision-making. Typically, grocers have been more risk-averse than other retailers. But is risk aversion – and the conservative thinking around investment and ROI it engenders – preventing companies from making investments that will pay off in the long term?

• Test and learn. It can take time to develop a winning offering in the digital age. By starting small and testing new ideas in a few stores, grocers can continue to innovate despite tight resources.

The evolution of grocery retailing will continue to accelerate, but a willingness to take risks and innovate around processes will help grocers succeed.

Marty Weintraub is National Retail Consulting Leader for Deloitte, based in Toronto.

Perspective

It’s time for a “Universal Venue”

By John F.T. Scott

After years of modest success, the recently held Food Marketing Institute (FMI) Mid-Winter Executive Conference attracted a record number of delegates from across the grocery sector. Not long ago, this annual gathering was a “must attend” for senior people in our industry, as it afforded a rare opportunity for networking at the highest level. Its tentative revival suggests that in this age of impersonal electronic communication, perhaps it’s time for casual collaborative discussion around common, non-competitive industry issues. Of course, that particular venue also affords the opportunity to engage in important business-to-business discussions.

A few weeks ago, I was catching up with a CEO when the discussion turned to the absence of this type of gathering in Canada: at a time when industry acrimony is at an all-time high, the need is there. It’s been six years since the final Canadian Council of Grocery Distributors (CCGD) national conference was held, and the loss of this concept is being felt more acutely than ever. Originated as an annual meeting place in various parts of the country for industry executives, over time it diminished in importance because of the marginal attendance of distributor CEOs, resistance by suppliers to the high cost of attendance, and acrimony between the associations representing distributors and suppliers. Rather than embracing the fundamental value of the event as a true opportunity for general or mutual collaboration, those in positions of power at the time took the easy route and terminated the Canadian industry’s only universal venue.

There are currently only two opportunities where many of the senior executives in the industry gather, albeit briefly and in very social settings. Both the Golden Pencil reception and the Night to Nurture Gala are enjoying an era of strong attendance resurgence. This suggests that it is time for the industry to come together at a new event that will attract people from the most senior levels. It would need careful structuring and must be aloof from the stigma of being a fundraiser for a specific organization. It would require a unique location removed from the centres of power but replete with attractive natural or cultural attributes (Whistler, Banff or Victoria come to mind – the Westerner in me). Rather than a traditional program packed with speakers and receptions, great care should be placed on facilitating group or individual networking sessions. Finally, we must find a way to ensure that the most senior people in the industry attend. If they find the first one to be of significant value, then it will be much simpler to replicate and tweak in the years ahead.

Any consideration of this concept would require direction from the senior ranks of both distributors and suppliers that a collaborative committee comprised of the CEOs of all of the major trade associations be structured for that purpose. This type of group could develop a straw case that, properly executed, just might have merit for the entire industry. The FMI experience has clearly demonstrated the huge upside to be gained.

John F.T. Scott speaks, writes and consults on the food distribution sector. He is the author of “Perspectives on the Retail Food Industry,” an itinerant publication that explores various aspects of the industry.

grocerybusiness.ca

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THRIFTY FOODS CE L EB R AT ES

40 YEARS With a unique history and a special place in the hearts of West Coasters, Thrifty Foods is building on its legacy through growth and innovation.

By Dave Lank

As Canadians fete the country’s 150th birthday, Thrifty Foods, the iconic Vancouver Island banner, is celebrating two major milestones of its own this year: 2017 marks the retailer’s 40 years in business and its 10th as part of the Sobeys organization.

Thrifty Foods is now poised to embark on a new era of growth, with dynamic initiatives and a renewed energy to take the brand to exciting new heights.

P H O T O S : C O U RT E S Y O F T H R I F T Y F O O D S

4,347 NUMBER OF EMPLOYEES

INNOVATION: A KEY INGREDIENT In a competitive market, Thrifty Foods stands out for its dedication to, and focus on, innovation. It’s something for which the banner is famous, and the company’s newly opened flagship store in Courtenay is a prime example of that innovative spirit. Its 47,000-sq.-ft. space (Thrifty Foods’ largest store to date), filled with creative new offerings, showcases just how far the banner is pushing the retail envelope when it comes to customer experience.

In addition to a redesigned grocery department shopping experience, customers can find a fresh juice and smoothie bar, an expanded produce selection, as well as freshly baked pizza al taglio. The new cake program includes a Belgian chocolate tempering station, where dipping options provide unlimited choice. They’ve also added a new fresh food court with a special aged beef offering, with cuts cured for 58 days (versus the standard 21 days), available on-site or for custom order.

“Our 40th anniversary as a company and our 10th anniversary with Sobeys is a unique opportunity to show the team we are a great banner doing a lot of exciting things,” says general manager Lorne MacLean. “We’ve evolved our offering to ensure it resonates with customers, and we plan to keep building the momentum and growing this business.”

FAMILY BUSINESS, COMMUNITY FOCUS With its roots as a family-owned business, Thrifty Foods became synonymous with Vancouver Island. Its alliance with Sobeys led to the investment of more stores on British Columbia’s lower mainland – growth that founder and industry trailblazer, the late Alex Campbell, who passed away in 2011 and who opened the first Thrifty Foods in Victoria’s Fairfield neighbourhood in 1977 – would have heartily endorsed.

Lorne MacLean was with Nova Scotia-based Sobeys for 38 years before heading west to head the Thrifty Foods team as general manager. His background provides him with unique insight into the many parallels that the two family-run businesses share. “These two families, the Sobeys and the Campbells,” explains MacLean, “grew their businesses, and cared as much about the business and their employees as they did about the people in their communities.”

A SENIOR MOMENT Founded by Alex Campbell Sr. and seniors’ advocate Prue Cunningham in 1987, the Sendial program is a grocery shopping and home delivery service for seniors who are unable to shop without assistance. Staffed by volunteers, hundreds of meals are delivered weekly to seniors who are enrolled in the program.

22

March | April 2017

ROAD SHOW Thrifty Foods is revving up its speed of innovation by hitting the road. Its new food truck is taking pilot product ideas and giving people across the province the opportunity to experience them first-hand. The food truck connects Thrifty Foods more deeply with the community and the many charitable events in which it participates, while also allowing for the gathering of invaluable and instant customer feedback.

5

25

ON THE LOWER MAINLAND

STORES ON VANCOUVER ISLAND

Q&A

WITH LORNE MACLEAN, GENERAL MANAGER, THRIFTY FOODS SOBEYS PURCHASED THRIFTY FOODS IN 2007.

WHAT WAS THE PRIOR CONNECTION BETWEEN THE TWO COMPANIES?

The senior management team (pictured, l-r): Christian Arbez, director of marketing; Lorne MacLean, general manager; Jim Steel, senior director, category management – fresh; Ralf Mundel, senior director, operations.

WHAT HAVE YOU FOUND TO BE THE GREATEST CHALLENGES TO GROWING THE BUSINESS?

John Robert Sobey and Alex Campbell knew each other and as the story goes, Alex called John and said he had just received an offer of $260 million for the company; but would the Sobey family perhaps be interested in growing into B.C.? There was an interest, so Alex decided to sell to Sobeys because he felt that it would be an alliance of shared values; the values of caring for community and growing the local economy.

IN THE 10 YEARS SINCE, WHAT INVESTMENTS ARE BEING MADE TO GROW THE BUSINESS?

One of the biggest challenges is finding the right people because the unemployment rate’s so low here and we’ve had a lot of growth. As a result, we’re introducing new ways of recruiting and have a team working on this. We want to hire the right people – people who care; people passionate about making the overall shopping experience better for our customers.

WHY IS LOCAL SOURCING A PRIORITY? When I moved to B.C., I was surprised at the length of the growing season and the ability to do more with local. Our customers are actually telling us, “I want to have more choices in local.”

Sobeys has invested a significant amount of capital here since the purchase. We’ve added new stores, new technologies, built a massive new warehouse and invested in equipment and training.

So we have a dedicated, locally based team that understands the unique needs of the market and the importance of helping Continued on page 24

“

With the food truck, we are able to get into markets to test local innovations that may be scalable. We’re approaching this as a ‘test and learn,’ so we can drive the food truck over to North Van and sample there, see what people think of it, and then drive it off to Port Moody.

We can also expand products

beyond the store to give people around the province an opportunity to try them. Right now, there’s this cool trend to smoked products, so we added a smoker to the truck. Customers really like the flavours – it’s a home run.

—Lorne MacLean

”

March | April 2017

23

Continued from page 23

BACKGROUNDER local suppliers. We can help these companies navigate through the regulatory system and work through our listing system. It speaks to family values. We know that by growing their businesses, we’re helping to grow the local economy, which is a key value for us.

HOW IS THRIFTY FOODS RESPONDING TO THE TREND TO ONLINE SHOPPING? Online shopping has been a growth area for Thrifty Foods. It’s an evolving service, and we continue to get customer feedback and make adjustments to our online services. It’s an important place to be for our customers, and we have a team dedicated to our online business and finding ways that we can serve our customers better. The company is investing heavily in technology to allow for the rapid increase in this segment of our business.

THRIFTY FOODS RECENTLY DONATED $1 MILLION, IN COLLABORATION WITH CUSTOMERS AND EMPLOYEES, TO B.C. CANCER FOUNDATION; TELL US ABOUT THAT. Thrifty Foods has a more than 20-year relationship with B.C. Cancer Foundation.

This was an important opportunity to make a difference in an area – caring for the overall health of the community – that resonates with our employees and customers. It’s a value that is instilled in our teams.

WHAT’S NEXT FOR THRIFTY FOODS? It’s been part of our strategy for the 40th anniversary to become a food authority, a food leader. We want to celebrate where we’ve come from, but also look ahead to where we are going.

Lorne MacLean began his career as a front-end employee in Sobeys New Waterford, N.S., store in 1979. He was in school then and perhaps didn’t imagine that, 38 years later, he would still be enjoying a grocery career with Sobeys that would take him from one coast of Canada to the other.

Over the years, MacLean assumed many increasingly responsible roles at Sobeys: from store manager trainee, to senior vice-president of operations for Sobeys’ multi-format operations, and now general manager of Thrifty Foods. MacLean’s experience is classic and deep. His roles have included: • Store manager • Grocery merchandiser • Category manager • General manager, Price Chopper Atlantic • VP operations, Atlantic Region • SVP operations, Sobeys multi-format, Canada • General manager, Thrifty Foods (as of July, 2015)

Thrifty Foods benefits from being part of Sobeys’ large supply chain, and is able to pass those savings along to customers. “We have spent this year working on more competitive pricing,” explains MacLean.

But lower prices should not be confused with discount, he insists.

“What we offer is superior service and superior products.”

24

March | April 2017

#1 COFFEEMAKER BRAND IN CANADA

*1

Bringing growth to your coffee aisle *2 *1 Source: NPD Group Canada, all Channels (excludes Costco), all Coffeemaker categories, 12 months ending November 2016. Note: Total Coffeemaker category includes all coffeemakers and espresso makers. NPD data does not include all retailers and is estimated to represent 68% of the total Coffeemaker industry. *2 Source: Nielsen Market Track, Dollars % growth vs last year, National all channels (including Costco estimated from Homescan panel), 52 weeks ending December 10th 2016.

VENDOR

A must-have item on shoppers’ grocery lists, coffee has evolved over the last 5 years. One of the main factors has been the introduction of the single-serve type

ADVISOR

of products that meet consumers’ need for convenience. Influenced by the economic

• COFFEE • SINGLE-SERVE BEVERAGES

will be key to optimize in-store offers and merchandising, in order to become a coffee

SPONSORED BY

environment, some consumers are seeking better value products, such as larger formats. However, as coffee is consumed not only for waking up in the morning, but also as a social occasion, tremendous opportunities remain in educating consumers (coffee beans, roasting, brewing methods). Understanding consumers’ various needs

destination and trade-up consumers to higher value products.

CATEGORY EVOLUTION & GROWTH BY SEGMENT OVERVIEW OF THE CATEGORY SEGMENTS AND PERFORMANCE IN THE LAST YEAR (LATEST 52 WKS)

TOTAL COFFEE CATEGORY GREW BY +2% TL TRADITIONAL R&G COFFEE

TL SINGLE CUP R&G COFFEE

44.9 $ Share +4%

43.7 $ Share -1%

KEURIG SYSTEM

31.5 $ Share +3% TASSIMO SYSTEM

TL WHOLE BEAN

11.8 $ Share -10%

9.2 $ Share +8%

OTHER SINGLE-SERVE

0.3 $ Share -2%

TL GROUND

35.7 $ Share +3%

INSTANT COFFEE Source: Nielsen Market Track, National all channels (including club estimated from Homescan panel), 52 weeks ending December 10th, 2016.

FLAVOURED COFFEE As flavoured coffee shoppers are exclusive and looking for more variety, make sure that these products are easy to find on your shelf!

20% 12% 2.2

Of coffee drinkers buy FLAVOURED COFFEE

Drink ONLY flavoured coffee (exclusive buyers)

Average number of flavoured coffee BLENDS consumers have at home

COFFEE CONSUMPTION In the coffee category, various consumption occasions are conducive to different coffee purchases. Make sure you have a product that fits each of these needs, as the shopper may be looking for one or/and another to answer it.

COFFEE OCCASION

COFFEE NEEDS

Morning coffee

Functional caffeine for waking up

After dinner coffee

Decaffeinated or indulgent beverage

Entertaining guests

Variety of blends and flavours

Offer various beverages to the family

Indulgent beverages

Source: Kantar TNS, November 2016 Source: 2016, Coffee Association of Canada

11.3 $ Share +6%

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

VALUE IN COFFEE

PREMIUM IN COFFEE

With the declining value of the Canadian dollar impacting food inflation, food prices have become one of the top concerns of Canadian consumers. It’s no surprise we are seeing some impacts in the coffee category as well.

TOTAL ROAST & GROUND COFFEE CATEGORY

While some shoppers are looking to save, others are ready to spend more to get a great tasting coffee at home. Premium traditional coffee and Keurig® products are both examples of trading-up coffee consumption.

% OF UNITS SOLD AT A REDUCED PRICE

LAST YEAR

THIS YEAR

MORE PRODUCTS ARE SOLD AT A REDUCED PRICE

TOTAL TRADITIONAL COFFEE

31%

SHARE OF LARGE K-CUP® POD BOXES INCREASED 12% VS. LAST YEAR

LARGE K-CUP® POD BOXES (30-50)

PREMIUM TRADITIONAL COFFEE

TRADITIONAL (CANS & BAGS) COFFEE: PREMIUM PRODUCTS HAVE A FASTER GROWTH

IMPORTANCE IN SERVINGS OF TOTAL KEURIG® SYSTEM

32%

+4%

% $GROWTH VS. LAST YEAR

49%

44%

+18%

EXTRA LARGE K-CUP® POD BOXES (50+)

SMALL K-CUP® POD BOXES

36%

Keurig® buyers fulfilled 74% of their annual coffee needs with Keurig® products, an increase of 4% vs. last year.

70% 74%

2015

2016

KEURIG® SHOPPERS: MANY ARE USING THEIR MACHINE MORE FREQUENTLY

K-CUP® PODS SHOPPERS ARE BUYING IN LARGE PACKS TO SAVE Source: Nielsen Market Track, National all channels (including Costco estimated from Homescan panel), TL Roast and ground excludes instant coffee, 52 weeks ending December 10th, 2016.

Sources: Nielsen Market Track, National all channels (including estimate of Warehouse club from Homescan panel), 52 weeks ending December 10th, 2016, Nielsen Cross Outlet Facts, National Retail Trade, 52 weeks ending October 1st, 2016.

OPPORTUNITY FOR AT-HOME COFFEE Keurig® offers 2 opportunities for different types of consumers. For those looking to save money, they can reduce take-out and drive-thru coffee consumption and prepare more coffee at home.

For consumers looking to trade up their filter coffee experience, the Keurig® system offers an elevated, more-premium experience, contributing to increase the value of the transaction.

AVERAGE PRICE PER CUP

$2.50 TO $4.50

$0.60

VALUE (SAVING)

DRIVE-THRU

$0.15

PREMIUM (TRADE UP)

KEURIG®

Sources: Nielsen Market Track, average regular price per portion, National all channels, 52 weeks ending December 10th, 2016, Square Canada coffee report, 2016.

TRADITIONAL COFFEE

SELLING OUT FAST!

YOUR

83

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grocerybusiness.ca

March | April 2017

29

air

hello

40

CA LORI ES PER CUP

CERTIFICATED

IN-PERSON IS SIMPLY BETTER

By Judy Sharpe

At a time when we’re all connected digitally, it’s easy to stay in touch. Whether you’re a vendor or a retailer, I’m sure your days are filled with emails, texts, Web searches, Facebook posts, tweets…

The list is endless and, yes, exhausting. While technology and social media have driven immense change in the way we do business, is that all we need to stay up to date?

Nothing helps build key business relationships like face-to-face engagement, and that is the true benefit of Canadian Health Food Association (CHFA) trade shows. They are not only a source for new products and trends, but they deliver education programs with access to industry thought leaders.

At CHFA West, for example, you’ll benefit from a host of educational options, including: • An update from the Canadian Food Inspection Agency on the Safe Food for Canadians Act – a game changer for everyone who produces and sells food in Canada.

• A presentation by Mark Colgate on employee retention, an issue that plagues many retailers.

• A look by lawyer Lewis Retik at potential liabilities that retailers and vendors share when making claims about their natural health products.

Add to this the many social activities taking place throughout the weekend, and you have the perfect opportunity to make new connections to expand your network. Engaging with a larger community of like-minded retailers will often lead to conversations that help you solve an issue or bring to light a way of approaching something you had not previously considered.

I sometimes hear from retailers that they don’t need to visit a trade show because their vendors visit them in-store and extend show grocerybusiness.ca

specials beyond the actual show date. That may be true, and this approach can serve a purpose. But what about all the new companies you haven’t met? Retailers surveyed following CHFA West 2016 told us that they found, on average, seven new suppliers and 12 new products for their store. And these numbers continue to grow year over year.

What about comparison shopping and taste testing? How about getting a jump on the next big food trends, as identified in a session

by Elaine Watson, editor of Food Navigator USA? As you explore the 650-plus exhibits, I encourage you to look for the ingredients or flavours that she identifies, which you can be sure consumers will want to purchase. You can also check out some of the newest products coming to the Canadian marketplace in the Product Showcase section of the CHFA West website, chfa.ca.

Whether you’re looking for the latest products, a new service provider or the opportunity to connect with your industry, the trade show is still your best bet: face-to-face is simply better.

Judy Sharpe is Director of Trade Shows and Conferences for the Canadian Health Food Association.

CHFA West runs April 6-9, 2017, at the Vancouver Convention Centre, West Building.

Visit chfa.ca for information on all upcoming events.

March | April 2017

31

the path to retail excellence.

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SHOW SPONSORS diamond sponsor:

gold sponsors:

platinum sponsors:

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media sponsor:

For complete details, visit chfa.ca Join the conversation #CHFAwest

Retailers attend the trade show for FREE using your Grocery Business Promo Code W17M56* Note: CHFA West is a trade-only event that is not open to the public. Proof of industry status will be required in order to attend.

Please refer to our show policies posted on our website for complete details. Complimentary registration is extended to Retailers only.

Make new connections

There is no other trade show in Western Canada that delivers the vast array of natural health, organic and specialty food products that you will find at CHFA West.

Discover the next big trend

Take advantage of show specials

conference: april 6 & 7 trade show: april 8 & 9 vancouver convention centre, west building

The largest show of its kind in Western Canada

750

More than 650 exhibits showcasing the latest in natural health, organic and specialty food products.

Plan now to attend!

Visit chfa.ca for details.

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DIGESTIVE HEALTH

CONSUMERS ARE LOOKING FOR SOLUTIONS

By Dr. Sara Celik, Naturopathic Doctor

New opportunities in the fast-growing digestive-health category have captured the attention of every retailer. This booming segment generates retail sales of $141 million, and is growing at three per cent.* With an overwhelming selection of products to choose from, retailers need to simplify the shopping experience for their customers.

Consumer education, promotional activities and knowledgeable staff will translate into higher sales.

Take a look at the history of probiotic supplements – the fastest-growing category within digestive health.

Not too long ago, it was believed that probiotics were only necessary following a round of antibiotics. We now understand that a daily dose of specific active bacterial strains supports a healthier gut and stronger immune system. While yogurt is tried and tested in the marketplace, it may not go far enough to meet the needs of consumers looking for multiple strains at higher potencies.

Effective advertising, competitive pricing and increased awareness of the importance of digestive health are responsible for the rapid growth of this subcategory.

This is no surprise, as Canadians have the highest incidence of Inflammatory Bowel Disease in the world, and medically diagnosed digestive disorders doubled in Canada over the last 10 years.

Today’s consumer wants a range of effective and affordable digestive-care supplements – probiotics, cleanse kits, digestive enzymes and omega-3 fatty acids – to support a healthier gut.

We are seeing more retailers committed to educating consumers on digestive health and the natural health products that benefit them.

Buyers are delighted when they can purchase with confidence and receive the right products based on their individual needs.

OF TOTAL SALES IN THE DIGESTIVE-CARE CATEGORY*

Probiotics are, by far, the largest segment

1 CONSUMER EDUCATION

E xamples include in-store demos, product brochures and free public lectures.

2 PRODUCT FEATURES

ighlight key differences between products in H advertising material and off-fixture displays. Use catchy headlines emphasizing specific product benefits, such as targeted support for irritable bowel syndrome.

3 DISCOUNTS AND PROMOTIONS

T here is an excellent opportunity to upsell in the digestive-care category. For example, the lack of fibre in the Canadian diet literally starves friendly gut bacteria. Consider a special promotion coupling a fibre supplement with a high-potency probiotic.

4 NATIONAL MARKETING

Probiotic supplements represent

53%

TOP 5 STRATEGIES TO BUILD CONSUMER CONFIDENCE

$75

MILLION

(+ 11% VERSUS THE PREVIOUS YEAR*)

National media marketing campaigns stimulate brand conversation, while educating and persuading shoppers.

5 KNOWLEDGEABLE STAFF Eighty-one per cent of consumers research online before buying, and they have access to more health information now than ever before. Since staff influence consumer purchases, ensure employees are qualified and armed with all necessary sales tools and resources.

The digestive-health category is here to stay.

Early adopters show that investing in this segment drives significant top-line growth. *ACN L52 weeks, 3 Channel, period ending December 10, 2016.

grocerybusiness.ca

March | April 2017

35

TRADE SHOW

TREND TOPPERS

By Sandi Hester, Senior Director of Natural and Organics, Tree of Life Canada

Biofach in Nuremberg, Germany, is the world’s largest trade show for organic foods. Over 2,300 exhibitors from 88 countries participated this year. The products showcased were very diverse but seven key trends really stood out.

RAW EVERYTHING

VEGAN HMR

SOUP

The raw trend continues to grow and grow!

From chocolate to bars to crispbread, just about anything you can think of is now available raw.

The mainstream trends of fresh, convenience and organics are now being offered with great diversity in vegan-friendly recipes.

Fully prepared fresh meals like lasagna, pastas, falafels, burgers and grain salads were showcased.

Hot or cold, soup was a theme, with several on-the-go options. Varieties ranged from traditional tomato to more specialty flavours with ethnic influences.

THE NEW SMOOTHIE The smoothie moves to the cereal bowl with superfood cereal “toppers” and mixes that promote functional benefits like energy and detox.

JUST ADD TURMERIC Turmeric has been on trend for a while but now its popularity is exploding. Turmeric is known as an anti-inflammatory, anti-oxidant and anti-cancer super ingredient. We saw it in teas, soup, popcorn, pasta and crispbread, to name just a few. It was the must-have ingredient.

BITE-SIZED Forget the big high-calorie snacks.

Energize or indulge in moderation. Bars have gone bite-sized.

SWEET INDULGENCE Consumers are looking for organic candy, chocolate and desserts. Vegan options appear to be on the upswing.

SHOW STOPPERS

By Maria Proulx Held in Bologna, Italy, the recent organic product trade show, SANA, produced many intriguing innovations.

These three trends stood out:

36

March | April 2017

1 B ioSolidale had some interesting and unusual spreads such as kiwi marmalade (kiwi was a popular flavour trend throughout the show). Vegetable spreads made from broccoli and asparagus were also a hit.

2 Liquid salt from the Mengazzoli brand.

3 T he healthy drink trend is branching out to include products made of grains such as buckwheat, quinoa, spelt, farro and kamut.

RETAILERS NEED TO KNOW:

ORGANIC PRODUCTS The business of selling organic products in Canada is always evolving, so Tia Loftsgard, president of the Organic Trade Association (OTA), and SIAL’s organics expert, provides answers to the most common questions the organization receives from retailers.

Do I need to be a certified organic retailer to sell organic products?

• Stores that have their onsite repacking, relabelling or processing activities certified may use the Canada Organic logo on those products. Retailers without certification for any of their handling activities may still sell certified products from other manufacturers.

• The PLU numbers for organic produce items often begin with the number 9.

Why don’t non-food items carry the Canada Organic logo?

• Products such as food, beverages, alcohol, agricultural crops, cut flowers, livestock feeds and other products under the enforcement authority of the Canadian Food Inspection Agency (CFIA) are included in the Organic Products Regulation (OPR).

Not covered at this time are personal care products and cosmetics, pet foods, organic supplements and health products and cosmetics.

What are the laws and regulations governing organic production in Canada?

• The OPR requires that any product within the scope of the OPR, claiming to be organic, meets its requirement and those of the Organic Production Systems General Principles and Management Standard, and Organic Production Systems Permitted Substances Lists.

• The laws, regulations and standards governing the sale of organics in Canada are available on these websites: CFIA: inspection.gc.ca OTC: ota.com/canada-ota

Tia Loftsgard will be presenting at the SIAL show in Toronto on May 2, 2017.

For more information, visit: SIALCANADA.com/conferences

How do I know if a product is organic?

• Look for the Canada Organic logo and certification body name on packaged products.

SWEET ON SOUR As Canadians learn more about the many health benefits of drinking vinegar, either straight-up or mixed in sweetened drinks called shrubs, sales are spiking.

$ Sales

% Change

Unit Sales

% Change

VINEGAR

82,396,965 11 25,605,042.7 6

WHITE VINEGAR

33,887,240

9

13,605,042.7

6

BALSAMIC VINEGAR

19,808,847

11

3,621,648.6

7

CIDER VINEGAR

11,992,942

27

3,517,321.9

16

OTHER VINEGAR TYPES

8,361,558

13

2,288,853.5

6

WINE VINEGAR

7,576,652

2

2,149,627.8

0

Source: Nielsen MarketTrack 52 weeks ending July 23, 2016

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37

40 YEARS YOUNG AND

TOTALLY

CHILL As Kisko celebrates its 40th anniversary the family company famous for its frozen treats reflects back on its rich history and looks ahead to a bright future.

By Dave Lank

Few food products represent summer in Canada as much as the iconic Freezie.

When temperatures rise and snowdrifts become a distant memory, kids all over this country make pilgrimages to their corner store with parents or friends in tow. They head directly to the chest refrigerator, slide its cold door open, and reach in to pull out their preferred flavour of the frozen treat.

It’s a familiar childhood ritual that has played out for generations. Kisko, the company behind its namesake Kisko Freezies and Mr. Freeze, and best known for making products to celebrate summer with, has its own reason to celebrate in 2017. This year marks the family run company’s 40th anniversary.

JAMAICAN BORN. CANADIAN RAISED. Proudly Canadian owned and operated, Kisko’s story actually takes root in the much warmer climate of Jamaica. That’s where the company’s founder, the late Leslie Josephs and his wife lived and had the entrepreneur-

(L. to R.) Randy Josephs, Peter Josephs, Glenor Josephs and Mark Josephs

ial vision to set up the island’s first Sno Cone business in 1968. He employed drivers to make and sell the flavoured shaved ice from the back of trucks. Eventually Leslie saw a bigger opportunity in packaging his frozen products in a tube, and worked relentlessly to build up a successful freeze pop business.

Sales were good, but unfortunately the political situation in Jamaica in the 1970’s wasn’t. Many Jamaicans made the difficult decision to leave the island, including Leslie and his wife Glenor. On Christmas Eve of 1975 they arrived with their five children in Markham, Ontario. With relatives nearby, it was here they would start a new life.

“My Dad faced the same challenges that many immigrants still face in finding work without any local job experience in their new country,” reflects Mark Josephs, Leslie’s son and Kisko’s President.

“When I share his story with our seasonal staff, who are largely immigrant based, they all nod their head because they’ve been there.”

An entrepreneur to the core, Leslie Josephs decided to do what he knew best by continuing in Canada what he had started in

Jamaica. Even though it now meant facing immense pressure from major competition here in his new country, he and Glenor founded Kisko Products Inc. in Agincourt, Ontario in 1977.

“A key part of our success in staying alive in the early days, and this still holds true today,” explains Mark, “was that we had the best tasting product, we provided great customer service, and we always tried to be innovators in the marketplace.”

One of the many innovative, and savvy business moves by Kisko was its decision to pursue licensing agreements. They signed their first in 1988 with Tetley, the English beverage manufacturer, and promptly launched Tetley Iced Tea flavoured Freezies. The product’s mass appeal spawned more agreements with licensed brands, including a lucrative one with the movie studio DreamWorks for its Shrek 2 animated film.

“That was a huge success for us,” says Mark on the DreamWorks’s deal. “It opened up a lot of doors and accounts for us where we hadn’t been, including Wal-Mart.” Other major licensing agreements eventually came from the likes of Canada Dry Mott’s, and Welch’s,

Last year Kisko launched Welch’s Lemonade Freezies, and recently obtained an organic certification. They’ll be looking to position new products in this exciting category as well.

both partnerships that continue to this day.

In 2005 Kisko purchased the Mr. Freeze brand from Hershey’s, solidifying Kisko’s position as Canada’s largest freeze pop manufacturer. From the early days of selling Sno Cones from a truck to now overseeing a veritable Freezie empire, the deal marked a remarkable bookend in a storied career for Leslie Josephs.

END OF AN ERA Leslie passed away Christmas Eve of 2007. The 10th anniversary of his death this year marks an opportunity for the Josephs family and Kisko employees to reflect on the founder’s immense legacy.

“He was as loyal as could be to his staff, and they all loved him and were as loyal as you could get,” says Mark describing his father’s

40 years young

relationship with Kisko employees, a large portion of which have been

40 years young community - but also for our staff members and family.”

To date, Kisko has built three schools on the island with a fourth to be constructed this August.

FOR KISKO, BUSINESS IS BRISK. Kisko remains a family affair. Glenor, who has played a major role in the business since founding is thrilled to see the business thrive under the leadership of her sons. The second generation of Josephs - Mark along with brothers Randy, VP of Operations, and Peter, Equipment Maintenance Manager – are ensuring the company is positioned for continued long term prosperity in Canada, the U.S. and international markets.

As Kisko reflects on the past 40 years it also has its sights set towards the future. “Product innovation, and excitement, are key to category success,” explains Mark, “so we stay ahead of what’s happening trend wise out there.”

Glenor and Leslie Josephs

One segment that Kisko helped to pioneer, and that continues to grow due to consumer demands for healthier

with the company for over 15 years. “For many he gave them their first or second job in Canada. Being one himself, he was always willing to help the underdog.”

Integrity is another personality trait used to describe Leslie and was a key part to the success of the business even after he had passed. “When we moved to our new facility in Woodbridge in 2008, we had a lot of struggles in our start up,” admits Mark. “Once again integrity was key, and being up front with our suppliers when we had some challenges was important. Because of the reputation that we had with them, they were willing to trust us.”

That bond between Kisko and key long time suppliers remains

options, is 100% juice ice bars under the Mott’s and Welch’s brand names. The steady growth in this category is a direct indicator of consumers’ preferences for more wholesome treats. Kisko also recently obtained an organic certification, and they’ll be looking to position more products in this exciting new category as well.

There will be a product release (or should we say re-release) this year that holds a special place in the company’s heart and in the memories of adults old enough to remember. It’s the nostalgic “Kisko drink with the straw.” It was the first product that Leslie Josephs launched in Canada and the one that started the whole journey.

And what a journey it’s been. Here’s to the next 40 years.

forged strong today. Even when it could lower costs through sourcing packaging and many ingredients overseas, Kisko opts to stay local, using the suppliers they trust and rely on for success.

KISKO FAST FACTS

MAKE MONEY. DO GOOD.

• Employee size: 85 full time and grows to 220 as support

Integral to Kisko’s business philosophy is the entrenched belief that purpose is as important as profit. For Kisko, running a business is not just about making money but also about positively impacting people’s lives. The company creates that impact by giving back to communities, both in Canada and in Jamaica.

“Apart from giving product to help support different events and fundraisers,” says Mark, “there’s also certain charities that we support donation wise including the Salvation Army, The Yonge Street Mission, and Teen Challenge, which is helping young people in Canada and Jamaica overcome addiction.”

Kisko also gives back in tangible, and very hands on ways in Jamaica. In 2015 Josephs family members, some suppliers, and staff of Jamaican descent went to the island. There they participated in building a primary school with the Helping Hands Jamaica Foundation.

“It had a huge impact for everyone,” says Mark of the initiative, “not only on lives there - the kids in Jamaica, their teachers and the

builds up for the main production season.

• Production facility: 115,000 sq ft, BRC Certified, Organic Certified, and Kosher.

• Best selling regular Freezie flavours: White cream soda and blue raspberry.

• Kisko sells over 335 million freezies in approximately 5 months in the Canadian market.

That equals an average consumption of 35 freezies per person ages 24 and under during that period.

• Mr. Freeze is a sponsor of the Toronto Blue Jays and product is sold in the Rogers Centre.

• Kisko exports to Korea, Jamaica and Caribbean, and the U.S.

Exit Interview

PIERRE CHARRON Late last year, Pierre Charron announced his retirement from the position of vice-president, national procurement, at Metro Inc. Here, he reflects on his outstanding career and his 38 years in retail.

Pierre Charron, speaking at the United Grocers Inc. dinner, 2016

What did you find most rewarding about your career in retail?

I am proud of introducing category management to my merchandising and procurement relationship with my suppliers. That became the platform that supported the merchandising and procurement decisions we made.

How would you say procurement strategies have changed over the years?

I would say that in the past, procurement was a leveraged negotiation that was based mainly on business size and sometimes tied to a threat of losing/reducing their business. But over the years, it evolved to become a joint business planning process with a focus on addressing business development opportunities.

You’ve worked with leading retailers such as Steinberg, Oshawa, Sobeys and, of course, Metro. Are there other grocery retailers that have impressed you?

One of my first experiences was visiting H.E.B. in Houston, Texas.

Their business model was dedicated to consumer targeting, tailoring their store layouts and category strategies to their market demographics. They designed their stores to consider the specific needs of the local customer base, developing their category management strategies to fit the profile of their targeted shoppers.

What was your best career move?

There were two:

engage all the divisions and build confidence that overall buying leverage would make the company stronger and that we would still be able to protect the regional businesses. A major upside was that we were able to acquire a better understanding of the national food market and gain a better understanding of best practices nationally. b) R eturning to Metro in 2003 to implement a central procurement operation that was the platform for category management and for leveraging the banners’ business plans with our vendors.

What was the best career advice you received?

That you must take care of your own development, using all the support your employer offers. And then use what you’ve learned to help support your team members so that they can achieve their goals.

What career advice would you offer to people new to the industry?

Be patient, learn the business, acquire knowledge and identify how to make a difference. Also, show motivation, not only aggressiveness, and ask for responsibilities that will help you contribute and stand out.

Will you stay involved in the industry?

I might eventually, but right now, I’m taking some time to reflect and to identify how I want to contribute to an activity that is close to my heart, such as teaching or sharing my experience with young entrepreneurs and new business start-ups.

a) In 1997, I accepted the challenge that The Oshawa Group offered me to launch a national procurement group In Toronto. I had to grocerybusiness.ca

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L

IA SPEFC R O

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Making It

GREAT GHEE

By Bonnie Schiedel

“When I made that first batch of ghee, I fell in love,” says Lee Dare, founder of Lee’s Provisions. “It tastes so good and it’s good for you.” Ghee, also known as clarified butter, is made by simmering butter to separate out the milk proteins, which are skimmed off. The result is a concentrated form of butter with a very high smoke point that can be used in baking, cooking and even personal care. Toronto food and beverage agency THP touted ghee in the top 10 of its 2017 Flavour & Trend forecast.

“I was originally thinking this would be something small, something I would sell at farmers’ markets,” says Dare. “But it just took off.” By 2015, she had founded the company and begun producing her lineup of ghees. And while Dare expected her customers to skew younger, it’s actually health-conscious baby-boomers who like it as a butter alternative that contains only traces of lactose and casein for the dairy-sensitive.

The company started getting exposure via industry events such as Canadian Health Food Association trade shows. And then after arranging a starter loan through a Futurpreneur Canada program that supports young entrepreneurs, Dare started knocking on doors and making cold calls to build her first 50 retailers, including Whole Foods and Foodland locations in southern Ontario.

When it came to finding funds to expand production and distribution, Dare decided to make her pitch on CBC’s Dragon’s Den in April 2016.

She piqued the interest of several judges (who debated her company’s merits while munching on ghee-topped popcorn), and she ultimately partnered with investor Joe Mimran.

“That was a turning point for the business,” says Dare, who continues to be the company’s sole employee. After the show aired in late 2016, “there was a huge increase in awareness about the brand and I got inquiries from all over the country.” After the taping, Dare added an e-commerce component to her company website, scaled down her seven SKUs to the five most popular and moved production to a 12-person manufacturing team at a federally-licensed dairy plant in Quebec, which has a larger ready supply of organic milk.

The company will expand distribution to stores in British Columbia, Quebec and Saskatchewan this year, and is on track to enter the American market in two years. Dare also changed the company name from Lee’s Ghees to Lee’s Provisions, to reflect a planned broader range of products.

And how about that elephant on the logo? It reflects the company’s commitment to donate 10 per cent of its profits to a non-governmental organization called Elephant Family that works to secure elephant wildlife corridors across India and other parts of Asia, helping to protect the world’s endangered Asian elephant population. “It’s a way to give back to the country where ghee originated,” says Dare.

“We put Lee’s Provisions on our shelves because the organic flavoured ghee is such a unique product. It does extremely well with our customers because of the lineup of flavours.”

—Tara Longo, owner, The Healthy Butcher, Toronto grocerybusiness.ca

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March | April 2017

GROWING FROM THE GROUND UP

150 YEARS OF FRESH FOOD

Produce Manager

CELEBRATING

150 YEARS

OF FRESH FOOD IN CANADA! Leading into Canada’s 150th anniversary, fresh food retailing continues its positive trend. Over the last century and a half, we have seen dramatic changes across the country, and these changes have significantly influenced how we grow, import and sell in Canada. Looking back, the wheels of progress were driven by the entrepreneurial spirit of Canadian food retailers. These individuals and small businesses searched for ways to expand markets, meet consumer demand and introduce new and exciting products to the market – just as retailers do today.

Fresh food merchants in 1867 could not have imagined the market dynamic in 2017.

From farm markets to specialty stores, local supermarkets, warehouse/club stores, supercentres and online retailing, the retail market has become complex and extremely competitive. Retail models have adapted and evolved to effectively meet consumer demand, government regulations and, in today’s world, shareholder expectations.

Amazingly, in our complex market, we continue to see food and beverage sales grow annually.

grocerybusiness.ca

Driving momentum is the consumer.

Canadians influence how we operate, as they are diverse, complex and part of a cultural mosaic that expects consistent availability of fresh food products year-round. Quality, price and food safety underpin their food purchases. Local, when in season, is a must, and demand for organics continues to grow.

Maintaining customer loyalty is perhaps the

Ron Lemaire President Canadian Produce Marketing Association

This is a year of Canadian celebration, and the fresh food industry has much to celebrate with Canada. History has demonstrated that we are winners! We are competitive, driven and complex, and globally focused, with a local vision supporting innovative production technologies that drive products that are socially responsible and environmentally friendly. And we do so on a year-round

Canadian retail food and beverage is now worth over $113 billion, making it the second-largest retail sector in Canada, next to automotive. greatest challenge for business today, with social media and targeted loyalty programs that can influence consumer behaviour.

In our global market, changing regulatory and environmental impacts continue to influence fresh supply chains; turbulent political change influences trade relations; weather and access to water can change product flow and price. Yet global food procurement brings with it opportunity and supply-chain efficiencies that allow for ongoing expansion of our world market.

basis at cost-effective consumer prices in a marketplace servicing 36 million mouths across a country that stretches 5,000 kilometres coast to coast.

It may sound like a daunting task, but 150 years have shown we are up for the challenge, and the future looks bright.

March | April 2017

49

heirloom tomatoes bold and unique heritage avour Stock your produce department with these one-of-a-kind delights. Oered in bulk or colourful display packaging, these tomatoes catch the eye and taste simply incredible.

Heirloom Tomatoes

Standing out from the crowd.

By Bonnie Schiedel

H

eirloom tomatoes, with their intriguing shapes and deep purple, pale pink, mottled brown, streaked red and yellow colours are the aristocrats of the produce department.

and can be grown from seeds saved from previous years’

For Chris Cervini, owner and CEO of Leamington, Ontario-

Lakeside Produce heirloom tomatoes sold in packages of two

based Lakeside Produce, the appeal goes beyond looks,

or three have proved popular in the grocery sector, says Dean

though, and is based firmly on taste. “We started growing

Scott, marketing manager, customer development, because it’s

heirloom tomatoes in 2007 and when I tasted one, I was

a convenient way to try something a little out of the ordinary.

impressed,” says Cervini. “Each tomato has a unique flavour.”

The heirloom tomatoes are grown in high-tech greenhouses

Indeed, it’s not uncommon for, say, a food blog to describe

in both Leamington, Canada and Mexico to ensure year-round

crops. Hybrids, on the other hand, have seeds that can’t be passed down from year to year and are often bred for factors like shelf life and consistent shapes rather than flavour.

heirloom tomato flavours in rapturous terms

availability, and they sell to both Canada

that are more often associated with a

and the United States, with much of their

fine wine, like “a complex flavour with an

American focus on the Eastern seaboard,

initial smokiness followed by a slightly sweet

notes Cervini.

aftertaste” and “sweet and low-acid, almost a

For the retailer, Lakeside’s heirlooms stand

tropical flavour.”

out from the crowd thanks to their bright

Media is the main driver of consumer

and unique colour and non-uniform

interest, says Cervini, pointing in particular

appearance. The variety of pack styles

to television food shows. “Customer request

offered by the company are easy for the

started us down this road,” he says. “I can

consumer to grab and they stand out on

sum up our heirloom tomatoes in one

display, attracting the eye and locking in

word: excitement. Everyone’s looking for a

the sale. Retailers are happy when their

different colour, a different size, a different flavour profile.”

Lakeside Produce has been growing and selling heirloom tomatoes for the last decade, using strains of seeds that are more than 50 years old. The company does crop trials to test for quality and flavour, and then internal panels decide on the best-tasting

“We started growing heirloom tomatoes in 2007 and when I tasted one, I was just impressed.”

Chris Cervini, owner and CEO

customers are satisfied, and Lakeside’s heirlooms have been a highly sought-after commodity.

“I’m fourth generation in the tomato business,” says Cervini, whose greatgrandfather Tony started the company in 1943. “When I was a young boy I remember playing in tomatoes, and as a teenager I

varieties. They also leverage customer

remember every summer it was about

feedback and refine their growing process

packing tomatoes. Today I get to grow lots

in order to stay on top of current trends

of tomatoes and sell tomatoes and travel

and find the next greatest flavor for the

the world to find interesting varieties.

consumer.

Tomatoes are my life.”

Produce falls into the “heirloom” category

lakesideproduce.com

when the fruit or vegetable is open-pollinated

JERSEY FRESH DELIVERS Please Visit Us at CPMA Booth #1506

When your customers see the Jersey Fresh logo, they know they are getting superior fruits and vegetables from the Garden State. Jersey Fresh delivers the freshness, quality and flavor discerning consumers demand. And by promoting Jersey Fresh in store and on ad, you’re letting them know that you are providing them with the best. You can be sure if it’s Jersey Fresh!

Contact the Jersey Fresh team | 1.609.292.8853 | jerseyfresh.nj.gov Jersey Fresh is a program of the New Jersey Department of Agriculture | Chris Christie, Governor | Douglas H. Fisher, Secretary of Agriculture

Produce Manager

Fresh&Hot

+12% +10%

Canadians’ love of fruits and vegetables drove double-digit volume increases of some categories last year. According to Nielsen, here are the products that topped the list of outstanding growth momentum in 2016:

+4

FRUIT

%

+6% Tangerines

Kiwis

+8%

Limes

Ve Bro ge ad ta lea bl f es

Nectarines

Ya m s Zu cc hi ni As pa ra gu s

Avocados

+7% +7%

+12%

Ca ul ifl ow er

+23%

+8%

VEGGIES SOURCE: Nielsen MarketTrack, 52 weeks ending Nov.12, 2016

Clementines Mandarins

75

%

of consumers are determined to eat healthier in 2017

grocerybusiness.ca

March | April 2017

53

NON GMO

#WINDSETFARMS VERI

Project FI E D

Produce Manager

67%

73 Vegetables

%

28%

Locally Sourced

Fruit

58% Salad

WHICH OF THESE PRODUCTS WILL YOU EAT MORE OF IN 2017? % OF CONSUMER RESPONSES

45%

45

%

Organic Foods

WHICH PRODUCTS ARE CONSUMERS’ GO-TO SNACKS?

Nuts/Seeds

+64% are trying to lose weight

15%

raw fruit

13%

nuts and seeds

Although produce sales have their own momentum with health-minded consumers, according to Field Agent, retailers can still influence purchase behaviour with in-store activity.

smoothies

When shopping for healthy products, consumers say the following promotions are most influential:

8%

SOURCE: Field Agent

87% PRICE BREAKS/ COUPONS

grocerybusiness.ca

72%

63%

IN-STORE DISPLAYS

DEMOS AND SAMPLES March | April 2017

55

Produce Manager

GROWING FROM THE

Ashley Pinto, Gr eg Hilborn, Patri ck and Ryan Goad , Loblaw Compan Gilbert, Yan Branco, Michael Bo rcsok, ies Limited

GROUND UP

Chris Lang, Sobeys

By Steve Watt The Ontario Fruit and Vegetable Convention (OFVC) recently completed its 15th year as Canada’s premier horticultural event. The annual gathering of crop producers involved in the production of fruits and vegetables had its highest attendance to date.

Michael Ecker, Vineland Growers Co and Michael Bo rcsok, Loblaw Co -Operative Ltd.; mpanies Ltd.

With the growth of consumers’ interest in local produce, day two of the convention saw a record turnout of growers for the Meet the Buyer gathering, a unique speed-date-style opportunity to help Ontario farmers meet key grocery chain and food industry buyers.

Bruno Bertucci,

Longo Brothers

OFVC partnered for the first time with the Ontario Produce Marketing Association (OPMA) to create an especially impactful event, with buyers from Longo’s, Loblaws, Sobeys, Metro and Farm Boy present to meet with local vendors.

Madani Houman

, Metro Ontario

Inc.

Mary Brison, Eric Ferrard, and Tobias Clarke, Foodland Ontario

56

March | April 2017

Virginia Zimm, OPMA, with Rob Frase

r (left) and Michael Miranda, Farm

Boy

Fruit Markets

SPECIAL REPORT

U.S. Food & Beverage Alliance 2017

SPECIAL REPORT

tasteus.com

tasteUSFoodBev

States-of-the-art food products Innovation in action

By Sally Praskey

Canadians are always in search of unique new products, and many of these come from the United States. Take, for example, bacon jam. This savoury, chunky jam is one of the latest innovations to be introduced to the Canadian marketplace.

But that’s just one of hundreds.

This demand for the novel and new is largely responsible for Canada’s yearly import of over US$16.5 billion of value-added products from the United States.

Canadians are loyal to their local growers, but when local is not available due to seasonality, surveys show Canadian shoppers prefer U.S. imported produce over that of any other foreign country by 62 per cent. There is a lot of interest, in particular, for U.S. specialty food items such as organic and natural food products.

grocerybusiness.ca

March | April 2017

57

SPECIAL REPORT

U.S. Food & Beverage Alliance Much of the popularity is attributed to the geographical proximity between Canada and the U.S., and Canadians’ confidence in U.S. fresh and processed foods. Over the years, the agricultural trade relationship between Canada and the U.S. has developed into a sophisticated supply-chain system that supports over US$40 billion in balanced two-way trade every year. In 2016, U.S. agricultural exports to Canada surpassed US$20 billion, with $16 billion, or nearly 80 per cent, comprising high-value consumer food products (HVP).

Canada accounts for over one-fourth of all U.S. HVP food exports, double the value of the second-leading market, Mexico, or equal to the combined Asian markets of Japan, Hong Kong, South Korea, China and Taiwan. The proximity makes it possible for fresh Anjou pears and green salads from the field to arrive on Canadian store shelves within 48 to 72 hours.

The U.S. cooperators and the State Regional Trade Groups are committed to supplying fresh produce and specialty products to Canadian retailers, to help them distinguish themselves from their competition. Over 25,000 new food and beverage products are introduced into the U.S. market every year, and our partners are looking for those innovations that will be well received here in Canada. As noted in this Special Report, the Food and Beverage Alliance’s agricultural partners remain committed to assisting these U.S. growers and processors in understanding the Canadian marketplace and meeting complete regulatory compliancy.

$20

billion U.S. total U.S. agricultural exports to Canada, 2016

75%

growth of U.S. agricultural exports to Canada, 2006-2015

Top 5 U.S. agricultural exports to Canada

Prepared foods Fresh vegetables Red meats

Fresh fruits

Non-alcoholic beverages

Source: Foreign Agricultural Service

58

March | April 2017

Fresh discoveries For Western Growers, technology is the key to producing crops with a higher yield, lower cost and better quality. After all, the organization, which represents farmers growing fresh produce in California, Arizona and Colorado, provides half the nation’s fresh fruits, vegetables and tree nuts, including half of its fresh organic produce.

That’s why, in December 2015, Western Growers opened the Center for Innovation and Technology (WGCIT) in Salinas, Calif., a technology incubator aimed at bringing innovative entrepreneurs together with farmers to facilitate creative solutions to the biggest challenges facing all the agricultural enterprises in the U.S., explains Hank Giclas, senior vice-president, strategic planning, science and technology.

Goal of Western Growers board: To feed more people with fewer inputs, leaving a smaller footprint on the world.

Giclas defines four areas in which the Center is concentrating its efforts: food safety, mechanization, and water availability and quality.

of the crews in the field, where labour is at a premium. “I think we’re going to see some weeding technology in the not-too-distant future,” says Giclas.

The Center has made inroads in each of these, but Giclas is particularly excited about sensor technology, now commercially available but not yet in widespread use.

“Right now, we’re using sensors at a few spots in a field to determine soil moisture and things like that, and ultimately, I think they’ll be a lot more pervasive,” he says. “It may even get to the point in some commodities – for example, perennial crops – where there are sensors per vine or tree. They can actually tell you exactly what’s needed in that plant at any given moment.” Remote sensing, using satellites and drones to estimate yield and find problem spots in the field, is also on the horizon.

For Canadian retailers, these advancements mean a greater consistency of supply.

“Ultimately, it could mean more yield, which could in turn lead to lower costs,” says Giclas. “But I think probably first and foremost, the benefit is you’ll be able to assure supply.”

There have also been strides made in mechanization, with a variety of harvest aid equipment that reduces the onerous parts of the job in hand-harvested crops. Thinning technology is now available to replace some

Giclas encourages Canadian buyers to reach out to Western Growers. “A healthy supply chain depends on healthy suppliers and retailers that work together. To the degree that folks are interested from a retail standpoint in supporting some of these efforts, I would encourage them to engage with folks at the Center.”

“In an era of diminishing natural and human resources, and growing regulatory and marketplace demands, the future of agriculture depends on technology. The Center will serve as a hub for the accelerated development and rapid deployment of innovative solutions to help farmers feed more people with fewer inputs.”

— Tom Nassif, President and CEO, Western Growers

Today’s farmers produce 262% more food with 2% fewer inputs (labour, seeds, fertilizer, etc.) than in 1950.

— American Farm Bureau Federation

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March | April 2017

59

© 2017 POM Wonderful LLC. All Rights Reserved. POM, POM WONDERFUL, POM POMS WONDERFUL and the accompanying logos are registered trademarks of Canada Bread Company, Limited, and used by POM Wonderful LLC under license. The Double Bubble Bottle Design is a registered trademark of POM Wonderful LLC or its affiliates. PN17058

It’s P∂M Time!

Make P∂M your partner in driving produce sales. We’re a leader in produce with a suite of unique products, like P∂M P∂MS pomegranate arils, P∂M Wonderful 100% Pomegranate Juice and P∂M Wonderful fresh pomegranates. In the fall, all three products will be supported with a national marketing campaign, including in-store POS, promotional support and public relations! To help sweeten your season, our tasty trio will be supported by the biggest merchandising team in produce.

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

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• peanut american Superior taste, quality, safety and sustainability. You've got to hand it to us.

A Flavour to Savour.

Stringent Safety Practices.

Committed to Quality.

A Leader in Sustainability.

The U.S. peanut industry’s technology and research in breeding, seeding, cultivation and harvesting combine to deliver the most flavourful, wholesome peanut.

The U.S. peanut industry invests heavily in plant modernization and the latest equipment to ensure that all buyers receive the best possible product.

peanutsusa.com

To learn more, contact: American Peanut Council 1500 King Street, Suite 301, Alexandria, VA 22314 USA, +1-703-838-9500 info@peanutsusa.com For consumer information and recipes visit peanutbureau.ca

U.S. peanut processors follow stringent food safety practices to ensure that consistency, safety and quality are present in every aspect of USA peanut production.

Peanuts are naturally sustainable.

They replenish soil with the essential nitrogen depleted by other crops, resulting in less greenhouse emissions.

SPECIAL REPORT

U.S. Food & Beverage Alliance

Taste test For the first time, the Food and Beverage Alliance brought U.S. products directly to Canadian consumers when it sponsored a tasteU.S. Pantry Shop exhibit at the National Women’s Show in Toronto last November.

Consumers had a chance to try a variety of new, innovative products – some of which were not yet listed with Canadian retailers – from 17 participating companies.

Companies used the booth as a kind of focus group to get feedback from consumers that they could

61%

of consumers surveyed gave the U.S. agricultural industry high marks for innovation

present to retailer buyers.

“Because of the positive results they got, the companies thought it would really help to leverage interest among retailers in Canada,” says Kathy Boyce, in-market representative for Food Export Northeast and Midwest. Companies also developed five questions to The Women’s Show in Toronto: Eager taste-testers at the tasteU.S. booth ask consumers about taste, quality, packaging, price point, etc., of a particular product so they could fine-tune it for the Canadian market.

“Consumers really like the opportunity of tasting these products and providing feedback,” says Boyce. For those products already in the market, consumers received a brochure showing where they could purchase them.

Retail promotions pay off The tasteU.S. campaign also extended to in-store promotions with a number of retailers. A Longo’s flyer, for example, featured a two-week half-page ad geared to products from the U.S. cooperators. “For the last couple of years, the tasteU.S. promotion has been heavily skewed to retail; Longo’s does prolific work through its Longo’s Kitchen and the home-mealreplacement sections of the store,” says Ken Berger, tasteU.S. Canadian representative. “That gave us an opportunity to work with our cooperators on a food-service element, but with a retailer.” In-store sampling included such dishes as roasted pear and parsnips, cranberry quinoa salad, and chicken burritos.

Washington Apples, Bard Valley Medjool Dates, and California Pears, Cherries, and Blueberries – over 700 demo dates in total.

Sampling also took place at Metro and Overwaitea stores, with cooperators Pear Bureau Northwest, Organic Trade Association,

After three years running, the tasteU.S. campaign will move exclusively to Quebec next year – including the Montreal Women’s Show – starting July 1, for one year and possibly beyond.

grocerybusiness.ca

There were approximately 250 customer intercepts per store per day. “We saw more than a 50-per-cent lift in sales in the stores where demos occurred, during the demo week versus the pre-demo week,” says Berger. “And we saw more than a 60-percent lift in stores where demos occurred when we measured sales for the post-demo versus the pre-demo week. You want to continue to see a lift in sales after the demos, and this clearly points to that.”

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63

Come visit us at the CPMA Show in Toronto, Booth #920

To learn more about Sunkist’s family growers, visit familystories.sunkist.com.

Sunkist is a registered trademark of Sunkist Growers Inc., USA. Š2016

SPECIAL REPORT

U.S. Food & Beverage Alliance

Florida fresh!

Canadians love Florida’s fresh fruits and vegetables. After all, Canada is Florida’s top export market for produce, with over $874 million in shipments and accounting for 21.6 per cent of Florida’s total agricultural exports in 2015.

Florida fruits and vegetables are transported to Canada primarily by climate-controlled truck, usually reaching retailers just two to three days after they are harvested. Post-harvest best practices are followed strictly, as food safety is each grower’s and packer’s primary goal.

54% of Canadian consumers

purchased more fresh produce in 2016 than 2015.

Canadian consumers’ buying motivation was influenced

nutritional value, followed by quality and price. by

The Florida Department of Agriculture and Consumer Services’ (FDACS) promotional brand, Fresh From Florida, has been promoting Florida fruits, berries and vegetables in Canada since 2002. During the 2015-16 growing season, it advertised 18 different Florida commodities – primarily grapefruit, snap beans, sweet corn, and strawberries – totaling 26,000 store ads.

Country of origin is

important to about half of all Canadian grocery shoppers.

When local produce is not available, they prefer produce from the U.S.

Source: USDA FAS Canadian office

Sprouting sales To Your Health Sprouted Flour Co. (TYH) has come a long way since 2005, when founder and president Peggy Sutton began sprouting wheat grains in Mason jars in her kitchen for family and friends.

When grains are sprouted, she explains, they are converted into a living food with more vital nutrients that are more readily absorbed by the body. This is especially beneficial for those with sensitivities to wheat.

The Fitzpatrick, Alabama-based company is now the world’s largest producer of organic sprouted flours, making over 50 products from 23 different organic grains, seeds, and legumes.

But for many aficionados of sprouted grains, taste trumps all. The sprouting process results in a tasty flour that is mild and full of flavour, with none of the bitterness of some whole-wheat baked goods. “You can truly recognize the specific flavours in the grains once they’re sprouted,” says Allison Stewart, public relations and sales for the company.

Many consumers, as well as Canadian retailers and wholesalers, are discovering what Sutton describes as “the goodness of sprouting grains for great taste, digestibility and nutrition.” grocerybusiness.ca

TYH does all the sprouting, drying and milling of the grains in-house, by hand. “It’s a four-day process for all of that to occur,” explains Stewart.

Although sprouting is a time-honoured tradition – years ago, grains sprouted in the fields before farmers could harvest them – it is rapidly penetrating mainstream grocery, with sprouted grains in croutons, cereals, breads, rolls, pizza dough, cookies and more.

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Canadian Consumers Prefer Field-Grown Florida Tomatoes From now through the end of May, Florida is your only U.S. source for safe, outdoor-grown, hand-picked tomatoes.

Give your customers what they demand and contact the Florida Tomato Committee at (407) 660-1949 to connect with a supplier!

41

%

Four-in-ten of Canadian shoppers prefer outdoor field-grown red round tomatoes year-round.

58

%

Six-in-ten of Canadian shoppers believe field-grown (Florida) tomatoes are superior in taste and flavour to hothouse round tomatoes.

75

%

of Canadian shoppers prefer to purchase Florida-grown tomatoes vs. Mexican grown tomatoes.

*Leger Marketing, Canadian Consumer Survey 2016

floridatomatoes.org

SPECIAL REPORT

Tastier tomatoes

U.S. Food & Beverage Alliance

Don’t be fooled by a tomato’s outer cover.

It’s what’s inside that counts!

Savouring sweet potatoes Despite Canadians’ cravings for sweet potatoes, few farmers in Canada cultivate them – the growing season is simply not long enough.

That’s why American sweet potatoes, shipped daily by truck to provide a steady year-round supply, are so popular in Canada. In fact, the U.S. has an approximate 95-per-cent market share for sweet potato imports into Canada. Ontario is the largest importer, followed by Quebec.

Organic and regular sweet potatoes are available at retail grocery stores across Canada, and new “mini” sweet potatoes have also been introduced at some grocery retailers, says Sue Johnson-Langdon, marketing and communications consultant for the American Sweet Potato Marketing Institute (ASPMI), a non-profit organization that promotes the U.S. sweet potato industry.

ASPMI recently launched a new website and an Instagram account.

“By adding a social media channel like Instagram, ASPMI hopes to inspire its Millennial audience to purchase American sweet potatoes and use them in recipes more often,” says Johnson-Langdon. americansweetpotato.org

64%

@lifeofasweetpotato

of Canadians eat sweet potatoes at least once a month Source: World Perspectives Inc., November 2016

grocerybusiness.ca

70%

of Canadians purchase sweet potato fries at grocery stores

Grano-shaped Florida tomatoes are renowned for their superior taste and flavour, firm and meaty texture, low gel content and extremely shallow calyx compared to tomatoes grown in a protected environment that maximizes yield without needless waste, i.e., wagonwheel slices. Canadian shoppers continue to express a 4:1 preference for U.S.-grown versus Mexican-grown tomatoes when Canadian field tomatoes are not seasonally available.* The Florida tomato industry never rests on its laurels.

Every year, it adopts a host of industry advancements to keep it at the forefront of safely producing fieldgrown tomatoes. Florida’s tomato growers have continually improved breeding, production and packing operations while enhancing sustainable growing practices that respect soil health and the environment.

After all, Florida farmers not only grow fresh Florida tomatoes; they also raise their families on those very same farms!

In cooperation with the Florida Tomato Committee and the USDA’s Foreign Agricultural Service, Florida’s tomato growers can provide marketing support to Canadian retailers, foodservice distributors and operators, wholesalers, and repackers that source, display, menu-incorporate, and strategically promote fresh Florida tomatoes from November through May. For further information, please contact the Florida Tomato Committee at: floridatomatoes.org Brad Brownsey: bbrownsey@bell.net * Leger 360° Annual Canadian Consumer Tracking Study

In 2015, Canadians consumed 8.08 kg, or roughly 18 pounds per capita of fresh tomatoes.

Source: Stats Canada CANSIM Table 002-0011

SPECIAL REPORT

U.S. Food & Beverage Alliance

91%

Peanut power The mighty peanut continues to grow in popularity. According to the American Peanut Council, 79 per cent of Canadian households consume peanut butter at least once a week.

For Quebec residents, that number jumps to 88 per cent.

A whopping 85 per cent of the peanuts consumed in Canada are grown in the U.S. Mindful of its environmental impact, the American Peanut Council has established a task force to measure the U.S. peanut industry’s carbon footprint and other indicators of sustainability throughout the supply chain,

of Canadians think peanuts and peanut butter are a healthy food choice

from farm through processing. The task force will also collaborate on methods to further improve the sustainability of U.S. peanuts and peanut products.

It is the task force’s goal to forge a clear, common understanding of what sustainability means within the peanut industry, and to ensure that various constituencies’ (business, academic, consumer) evaluation of peanut sustainability is based on consistent, sound science and appropriate principles. It also aims to provide industry members with goals, tools and support to incorporate sustainability in their business operations.

DID YOU KNOW? No part of an American peanut goes unused: • Pelletized peanuts made from the hulls are used for animal feed and fuel.

• P eanut “hay” from discarded vines is used for livestock feed or put back on the land to enrich the soil.

• E merging uses are being discovered for peanut skins, which contain high levels of antioxidants/ polyphenols.

• Biodiesel is produced from peanut oil.

Go Fetch!

Innovations in technology enhance not only the products we buy, but also how we shop.

For example, Shop Fetch, Madison, Wisc., allows shoppers, through a free mobile app, to scan items on their smart devices as they shop, and instantly apply digital savings, track their spending, and conveniently check out with the use of a single barcode. Through the company’s partnership with ShopWell Labs, Inc., shoppers can also personalize their dietary and nutritional needs to help them find the best products for their requirements.

For their part, retailers benefit from more loyal customers: In a study of over 2,000 shoppers, the company found that 42 per cent of Fetch grocerybusiness.ca

users shopped more at a store after the launch of the technology. Fetch shoppers also have a 22-per-cent increase in basket size.

“In addition to more valuable shoppers, retailers benefit from the unprecedented granularity of data and insights provided by Fetch,” says CEO Wes Schroll.

To implement Fetch, retailers need only be Wi-Fi-enabled and provide their current pricing to Fetch. The program can be integrated into any grocery store. The company is hoping to bring Shop Fetch to Canada in the near future. fetchrewards.com.

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69

SPECIAL REPORT

U.S. Food & Beverage Alliance

Products to the people Annalea Krebs, chief influencer of Social Nature (socialnature.com) in Vancouver, has devised an innovative way for U.S. companies to reach their target consumers in Canada.

In a nutshell, Social Nature targets consumers online, uses coupon offers to drive them into stores to try the product, and brings them back online to spread the word through product reviews and social posts.

For example, MELT Organic used Social Nature’s platform to launch its Organic Buttery Sticks, made from a blend of virgin coconut oil, hi-oleic sunflower oil, and palm fruit oil. “Social Nature’s social network was an integral piece in substantially increasing

our sales in Canada,” says MELT marketing manager Andy Query. “This was largely due to consumer advocates becoming aware of MELT through the Social Nature campaign, trying our product in-store, and then sharing reviews and coupons about their experience with their social media network.”

For Kim’s Simple Meals, an organic, gluten-free vegan line of shelf-stable justadd-water meals, Social Nature executed a similar campaign. It matched Kim’s distribution list to its community database, targeting Millennial moms who lived within 10 kilometres of a retailer who carried the product. Kim’s then mailed these targeted consumers a VIP coupon redeemable in-store for a free product.

“Within a few weeks of the campaign launching, the company had close to 2,000 ‘Mom-Influencers’ tasting and talking about the product, increasing sales in-store and generating millions of impressions online,” says Jon Fish, vice-president, marketing, at parent company Heritage Health Foods. “This increased awareness of our new product launch in-store moved thousands of products off the shelf and generated 15 times higher than average repeat sales.”

Get to know US Meet our tasteU.S. cooperators and partners face-to-face at SIAL Canada and the Canadian Produce Marketing Association show – two unique opportunities to learn more about how these organizations can help expand your business with U.S. products.

SIAL CANADA

May 2- 4, 2017 Enercare Centre, Toronto

Citrus World Inc. (Florida’s Natural Growers) citrusworld.com

North Carolina Department of Agriculture & Consumer Services ncagr.gov

A listing of USA Pavilion Exhibitors

Crouch’s Gourmet Specialties Inc. crouchsgourmet.com

Safie Specialty Foods, Inc. safiespecialtyfoods.com

USDA/U.S. Consulate General tasteus.com Acai Roots acairoots.com Bariani Olive Oil, LLC barianioliveoil.com Castella Imports castella.com

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March | April 2017

Food Export Midwest & Northeast foodexport.org Ford’s Gourmet Foods bonesuckin.com Garon Foods, Inc. garonfoods.com La Preferida lapreferida.com

A listing of U.S. cooperators, firms and organizations affiliated with tasteU.S.

California Agricultural Export Council caec.net

* An exhibitor at CPMA 2017 Toronto

California Cherry Marketing Research Board calcherry.com

Smartfruit Company drinksmartfruit.com

American Peanut Council* Booth #1122 peanutbureau.ca

California Cling Peach Growers Advisory Board calclingpeach.com

Snake Oil Cocktail Mixers & Sauces snakeoilmixers.com

American Sweet Potato Marketing Institute americansweetpotato.org

California Dried Plum Board cdpb.org

Southern United States Trade Association (SUSTA) susta.org

Bard Valley Date Growers naturaldelights.ca

Secret Aardvark Trading Co secretaardvark.com

Sunny Sky Products sunnyskyproducts.com

Blue Diamond Growers bluediamond.com

California Fig Advisory Board californiafigs.com California Pear Advisory Board calpear.com California Strawberry Commission* Booth #215 calstrawberry.com

U.S. Food & Beverage Alliance

U.S. Showcase Safie Specialty Foods Co., Inc. Enjoy the delicious, succulent flavours of Safie’s newest creations, Organic Sweet Pickled Beets and Crispy Dill Pickled Carrots. Add sophistication to your cocktails, create delectable appetizers, and infuse excitement into your entrees. Safie’s Michigan-made products are healthy, gluten-free, and OU kosher. safiespecialtyfoods.com

Wyoming Gourmet Beef

Beanfields Snacks We bring you simple, plant-based snacks that your taste buds love. Our family-owned company is committed to creating always vegan and gluten-free snacks that are better for you and better for the environment. Creators of Beanfields Bean & Rice Chips, where your craving for a crunchy, mouth-watering tortilla chip meets your desire to find a better snack. beanfieldssnacks.com

Florida Department of Citrus floridacitrus.org Florida Tomato Committee* Booth #1120 floridatomatoes.org National Sunflower Association sunflowernsa.com National Watermelon Promotion Board* Booth #930 watermelon.org Northwest Cherries* Booth #1109 nwcherries.com

grocerybusiness.ca

Pear Bureau Northwest* Booth #1013 usapears.org Sunkist Growers, Inc.* Booth #920 sunkistgrowers.com Synergistic Hawaii Agricultural Council Hawaii Coffee Association hawaiicoffeeassoc.org Hawaii Floriculture and Nursery Association hawaiisflowers.com Hawaii Papaya Industry Association hawaiipapayas.com

Wyoming Gourmet Beef is a health-conscious company concerned about the origin, quality and safety of food. Our products use All Natural beef (never any hormones or antibiotics) exclusively from Wyoming, with food traceability back to the ranch. Our Premium Beef Sticks have no MSG or nitrites, and are gluten-free. wyominggourmetbeef.com

U.S. Apple Export Council usaapples.com

National Association of State Departments of Agriculture

USA Rice riceinfo.com

nasda.org

Washington Apple Commission bestapples.com

Florida Department of Agriculture and Consumer Services* Booth #1601 freshfromflorida.com

Washington State Fruit Commission* Booth #1109 wastatefruit.com Western Growers Association wga.com Wonderful Citrus/Wonderful Pistachios & Almonds* Booth #1301 wonderful.com

State members at CPMA

New Jersey Department of Agriculture* Booth #1506 state.nj.us/agriculture

North Carolina Department of Agriculture* Booth #1639 ncfreshlink.com Virginia Department of Agriculture and Consumer Services* Booth #1604 vdacs.virginia.gov

Canadian Produce Marketing Association Convention & Trade Show May 9 – 11, 2017 Metro Toronto Convention Centre, Toronto

SPECIAL REPORT

Connecting with Canadians

U.S. Food & Beverage Alliance

Canadian food buyers, brokers, and distributors in search of innovative agricultural products and processed foods need look no further than the State Regional Trade Groups (SRTGs) to connect with export-ready U.S. companies.

Consisting of Food Export USA - Northeast, Food Export Association of the Midwest USA, Southern United States Trade Association (SUSTA), and Western United States Agricultural Trade Association (WUSATA), the non-profit SRTGs give small and medium-sized companies the opportunity to travel to Canada to meet with buyers at food trade shows and in outbound missions. At the same time, they sponsor inbound missions in which Canadian buyers can tour company production facilities and meet directly with key personnel. The SRTGs also help companies with funding to promote their products in Canada.

It’s a win–win partnership. “Canada is expected to be the top export destination in dollar value for U.S. agricultural exports in 2017,” says Alison George, Canadian representative for SUSTA. Food Export Northeast and Midwest focus exclusively on processed foods, primarily products made from natural and organic ingredients. The organizations’ Canadian representative, Kathy Boyce, cites such new and unique offerings as organic maple soda and seltzer, smoked maple syrup, an organic pâté, and essential-oil inhalation patches, to name just a few. “We work with anything that’s at least 50 per cent U.S. agricultural ingredients by weight,” Boyce explains, “so the types of products can really vary. Most are clean-ingredient and plant-based products, which are trending right now. You also see a lot of allergen-free products coming up.”

TW Agencies’ Simply Natural brand, launched through WUSATA, is now the Canadian leader in organic pasta sauces and salad dressings.

Tony Waters, founder, TW Agencies, with daughter Jessica Waters

On a mission Jessica Waters knows a good product when she sees one – or at least one that meets her brokerage’s exacting standards for clean, natural, sustainably-sourced ingredients.

Waters, president of TW Agencies in Vancouver and Toronto, has been attending trade missions organized by the SRTGs for many years.

The SRTGs were the springboard for launching the brokerage’s Simply Natural brand by its founder, Tony Waters (Jessica’s father), 21 years ago. “We joined up with WUSATA years ago with our brand Simply Natural, says Waters.

“It’s now the Canadian leader in organic pasta sauces and salad dressings,” boasting 31 items in six categories. She says the funding that is provided to companies through the SRTGs has been extremely helpful in launching new products in Canada.

The SRTG trade missions give Waters the opportunity to visit manufacturing facilities and meet with company executives in an efficient way.

“I’m able to meet with 25 companies in two days,” she says. “From my standpoint, it’s sort of like speed dating for business!”

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March | April 2017

LIST IT

NEW & NOW DISCOVERIES

Refreshing fruit flavours from Astro Athentikos!

Astro Athentikos introduces two consumer favourite yogourt flavours to its Greek yogourt lineup: Peach and Raspberry. High in protein, these refreshing fruit-on-the-bottom yogourt tubs are perfect for breakfast, snacking, or blended in smoothies. With 10g of protein per 100g serving, these delightful treats provide the protein consumers are looking for, and creamy, delicious and familiar flavours.

astro.ca

Infuse your day with freshness Made with herbs, flowers and spices, deliciously cold-infused in water, plus 35% real fruit juice, Oasis Infusion helps to keep you hydrated all day long. Only 50 calories per serving.

oasisinfusion.ca

Melitta launches 100% compostable pods Melitta introduces the world’s first certified 100 per cent compostable coffee pod. Developed by the University of Guelph’s Bioproducts Discovery and Development Centre, these innovative pods are certified 100 per cent compostable by the Biodegradable Products Institute, and are compatible with most Keurig brewing systems, including the new Keurig 2.0 brewers.

melitta.ca grocerybusiness.ca

March | April 2017

73

LEGENDARY BAR-B-Q

2x3 Retail Ready Case

SINCE 1968

Half Pallet

PPK # 901436344

STUBBSBBQ.COM

® Reg. TM/MC McCormick Canada, London, Canada N6A 4Z2. Used under licence.

Shelf Tray

PPK # 901436606

g n i r p S INTO BBQ SEASON

BBQ Season

On the cusp of barbecue season, we checked out the trends that are influencing consumer buying behaviour now. Top of the list: tradition with a twist.

In 2016, for the first time, the number of Canadians saying they had purchased natural and organic barbecue products exceeded those who did not.

POINT OF PURCHASE

PURCHASED NATURAL/ORGANIC

48 % 41

62%

% YES

While of consumers choose to purchase their meat at supermarkets and butcher shops, farmers’ markets and specialty/organic retailers are gaining share

NO

Consumers are still interested in traditional cuts of meat; think charcoal smoked ribs and steak Source: Cargill Meat Solutions Corp.

Spice it up 60% of meat

buyers say they are willing to try something new, such as a new spice or marinade

60% Source: Food Marketing Institute

What a pair!

With beer now available in many grocery stores, consumers will be looking for beer and barbecue pairing suggestions.

BARBECUE

BEST BEER

Beef and root vegetables Sour and tart flavours Pork

Fruity and sweet flavours

Grilled vegetables

Dark and roasted flavours

Source: Craftbeer.com

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75

NIGHT TO NURTURE GALA 2017 FEBRUARY 4, 2017 Celebrating its 38th year, the Night to Nurture Gala offers the grocery and food industry a unique opportunity to come together to make a significant and positive difference to children in Ontario. Funds raised through the Gala benefit organizations that nurture the whole child, such as Kids Help Phone and breakfast programs in Ontario schools.

Since 2000, the industry-supported Night to Nurture Gala has raised close to $35 million.

Blue Rodeo

A welcoming sign

Children’s Choir

Frank Tombol, Lawrie Insurance Group Inc. Lianne Tombol, Hussmann Canada Inc.

Michelle and Brian Jackson, Acosta Canada

Gabby Nobrega, Breakthrough Communications; Michelle Scott, The Grocery Foundation

Pictured (back row): Dan Bordun, Karen James, Grocery Business; Kensley and Jeff Rogers, Mosaic Front row: Michael and Debbie Marinangeli, MIDEB; Tina and Kevin Smith, Grocery Business; Todd Tessier, Brent Scowen, Acosta Canada

Oscar Ip, Paulina Pedziwiatr, Sam Weir, Sobeys

Brian and Tammy Grigat, Michael and Lynsay Forgione, Longo Bros.

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March | April 2017

John Scott, Scott Management; Joe Weber, Saputo

Jim and Johanne Slomka, Clorox Canada

Gay and Anthony Longo, Longo Bros.

Dwight Boswell, Karen White-Boswell, Purolator

grocerybusiness.ca

Todd and Sharon Kelly, Kind Snacks

Lindsay Weatherdon, Concord Sales; Mrs. and Mr. Rob Adams, Sobeys

Winner of the raffle, Cassie Landolfi, guest of Taylor Farms

Liesbeth and Shaun McKenna, Acosta Canada

Frank Rispoli, Nestle Purina, and Carly Rispoli

March | April 2017

77

Sign up for our free weekly digital edition.

Send your request to: info@grocerybusiness.ca

it figures

Premium Products Pack a Punch

64

the highest attribute % consider of a premium product to be “made of high-quality ingredients�

Consumers are savvy and understand labels, so think about product packaging as prime real estate that needs to convey a clear premium message.

Takeaway

38

%

of Canadians agree that buying premium products makes them feel good

30

Ensure the product lives up to the promise. Higher prices set a higher bar for product deliverables so consumers have less tolerance for poor performance or undesirable attributes.

Takeaway

%

of Canadians consider price to be a determining factor of a premium product

The value of premium goes beyond price in the mind of consumers. Increasing prices as a premium differentiator must be tied to providing a very clear value proposition to support the change.

Takeaway

77

%

of consumers are willing to pay more for products that offer something no other product on the market provides

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.

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

All successful innovations, regardless of price, share a common characteristic: they solve a real consumer need. For premium brands, this attribute helps justify the higher price point they command.

Takeaway

41

% For of consumers, trial of a new premium product is usually based on research

31%of trial comes through

recommendations by friends and family Most new products experience a sales decline in their second year unless advertising spend continues to drive growth.

Given premium products’ higher price tags, consumer adoption may be slower, so those products will require greater multi-year marketing investment.

Takeaway

% OF CUSTOMERS WILLING TO PAY MORE FOR A PREMIUM PRODUCT: TOP 5 CATEGORIES

27% 21% 19%

grocerybusiness.ca

MEAT/SEAFOOD DAIRY PRODUCTS HAIR CARE

24%

COFFEE/TEA

19%

BODY CARE

March | April 2017

81

In Other Words

“I think the fact that we are opening so many [stores] right now has to do with very strong sales. We have been enjoying five- to nine-per-cent [same-store sales growth] in local currency in each of the last few years, so it keeps getting stronger.”

Richard Galanti, executive vice-president and chief financial officer, Costco Wholesale, commenting during a recent analysts’ call, about the seven new stores the retailer plans to open in Canada in 2017.

Costco Annual Canadian Sales

21 BILLION $

82

March | April 2017

Number of stores

91

+ 7 new ones in 2017

Annual membership fee

$60

% of members who renew

90%

NETWORKING BEGINS HERE Arnold Schwarzenegger

Giada De Laurentiis

Jewel Hunt

Jim Belushi

Celebrity Chef

California’s 38th Governor

Group Vice President Bakery Albertsons Companies

and The Board of Comedy

9,000 PROFESSIONALS

TOP SPEAKERS

700 EXHIBITORS

SALES OPPORTUNITIES

NEW PRODUCTS

EXPERT ADVICE

TRENDS RESEARCH

RETAIL TAKEAWAYS

This is the essential networking event for dairy, deli, bakery and foodservice professionals. Innovative products, merchandising, plus sales opportunities - all in one three-day show!

REGISTER TODAY!

IDDBA.ORG 608.310.5000

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Put yourself in the center of the whole treating and snacking world Discover more new innovations, items, solutions and trends at the Sweets & Snacks Expo than anywhere else. With access to the most candy & snack people and products, you’ll gain a real competitive edge and grow your business.

Your “center” is here.

Register Now sweetsandsnacks.com Benefit from two shows!

The National Restaurant Association’s NRA Show 2017 takes place May 20 - 23. *Separate registration required at: show.restaurant.org