Canadian Grocer June/July 2020 by ensembleiq

The return of centre store Grand Prix finalists JUNE/JULY 2020

exclusive

Eric R. La FlĂ¨che Metroâ&#x20AC;&#x2122;s chief on customer expectations, e-comm and responding to a pandemic

CONTENTS June/July 2020 Volume 134 Number 04

COVER STORY

METRO’S MOMENTUM

OPINIONS

CEO Eric R. La Flèche talks customer experience, e-comm, and what we can learn from the pandemic

5 Front Desk 16 Food Bytes 17 Eating in Canada 46 Checking Out PEOPLE

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

8 Tara Bosch

FEATURES

SmartSweets’ founder celebrates candy while kicking sugar to the curb

THE NEW IN-STORE ENVIRONMENT

IDEAS

26 Safety and convenience

11 Handling stress in pandemic times

define the current customer experience. Are pandemicrelated changes here to stay?

In this age of escalated anxiety, find out how to keep your staff thriving

SIMPLY GRAND

14 Q&A with Anthony Longo Longo’s president & CEO chats about the impact of COVID-19 on his business

31 Check out the impressive finalists of this year’s Canadian Grand Prix New Product Awards

AISLES

39 The return of centre store The previously shrinking centre store has made a comeback. Will it last postpandemic?

43 New on shelf Shining the spotlight on the latest products hitting shelves

45 Defence mechanism

COVER PHOTO: CHANTALE LECOURS

Immune-boosting foods get a boost in the wake of COVID-19

@CanadianGrocer Canadian Grocer Magazine @CanadianGrocerMagazine June/July 2020 Canadian Grocer

From our front-line to yours: Thank you for helping to feed 37 million Canadians during this time of need

PUBLISHER

Vanessa Peters

vpeters@ensembleiq.com

EDITOR-IN-CHIEF

Shellee Fitzgerald

FRONT DESK

sfitzgerald@ensembleiq.com

MANAGING EDITOR

Carol Neshevich

cneshevich@ensembleiq.com

In grocery’s new normal, selfserve salad, hot food bars and bulk sections may be a thing of the past

ONLINE EDITOR

Kristin Laird

klaird@ensembleiq.com

ART DIRECTOR

Josephine Woertman

jwoertman@ensembleiq.com

CONSULTING EDITOR

George H. Condon

condug@sympatico.ca

DIRECTOR OF PRODUCTION

Michael Kimpton

mkimpton@ensembleiq.com

SENIOR VICE PRESIDENT, CANADA

Donna Kerry

dkerry@ensembleiq.com

VICE PRESIDENT, PRODUCTION

Derek Estey

destey@ensembleiq.com

VICE PRESIDENT, EVENTS

Michael Cronin

mcronin@ensembleiq.com

MARKETING DIRECTOR

Alexandra Voulu

avoulu@ensembleiq.com

SENIOR DIRECTOR AUDIENCE STRATEGY

Lina Trunina

ltrunina@ensembleiq.com

SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS

Valerie White

vwhite@ensembleiq.com

SALES SR BUSINESS DEVELOPMENT MANAGER

Chantal Barlow

cbarlow@ensembleiq.com

Getting ready for what comes next

Adaptability is key in these times of constant change

NATIONAL ACCOUNT MANAGER

Katherine Frederick

kfrederick@ensembleiq.com

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ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2020 by EnsembleIQ, may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. Canadian Grocer, its affiliates and assignees may use, reproduce, publish, republish, distribute, store and archive such submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. ISSN# 0008-3704 PM 42940023 Canadian Grocer is Published by Stagnito Partners Canada Inc., 20 Eglinton Avenue West, Ste. 1800, Toronto, Ontario, M4R 1K8. Printed in Canada

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AS WE ENTER something like week 14 (at the time of this writing) of contending with covid-19, the desire is growing ever stronger for things to get back to normal or at least some semblance of it. But although we may be sick and tired of the virus, it’s clearly not yet finished with us. Normal might be a long way off. Still, there’s no shortage of speculation as to what a “new normal” might look like for grocery retail. Is the salad bar gone for good? In-store sampling? Is it finally the end of the road for cash? Will shopping ever be fun again? These are just some of the questions being pondered. In “The new in-store environment,” (page 26) writer Rebecca Harris explores the subject. While in the pre-covid world, creating a compelling in-store experience was a priority for many retailers seeking to stand out from the crowd; today, the shopper experience is being defined by safety concerns and convenience. From product assortment to store layout and in-store tech, Harris looks at what’s changed in store, what’s coming and what pandemic- related measures may be here to stay.

Also in this issue, columnists Joel Gregoire (Mintel) and Kathy Perrotta (Ipsos) reveal research on the impact the pandemic is having on how, and what, Canadians eat and how retailers can leverage these changing behaviours. And managing editor Carol Neshevich looks at centre store’s resurgence. But will this often unloved part of the store’s renewed popularity last post-pandemic? Find out on page 39. We also had the opportunity to talk to Metro president and CEO Eric La Flèche for this issue’s cover story (page 20). Among the many questions we put to La Flèche was one on the biggest challenge facing the grocery industry. His response? Meeting customers’ changing needs. “It’s always been that way,” he says. “In retail, you have to evolve constantly.”

Shellee Fitzgerald Editor-in-Chief

sfitzgerald@ensembleiq.com

The grocery industry is changing rapidly. Keep up to date on the latest news by signing up for our e-newsletter. It’s free and we’ll deliver it to your inbox three times a week.

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June/July 2020 Canadian Grocer

THE BUZZ

The latest news in the grocery biz

COMINGS AND GOINGS

Empire Company has announced its next six FreshCo locations in its Western expansion: two in Alberta, which will be the province’s first FreshCos, and four in Manitoba

OPENINGS

Empire Company is forging ahead with the Western expansion of its FRESHCO discount banner. The company recently announced its next six FreshCo locations in Western Canada, including the first ones in Alberta. The two Alberta locations will both be in Edmonton, in the communities of Heritage and Tamarack, both slated to open in spring 2021. The Tamarack location is a new construction site and Heritage will be a Sobeys conversion. The other four locations announced in June are all in Manitoba: Sargent, Niakwa Village, Pembina & McGillivray, and Henderson & Bronx. These are all Safeway conversions and are expected to open as FreshCos in spring 2021. With these announcements, the company has now confirmed 28 of the 65 planned FreshCo locations for Western Canada. This spring, Empire opened two FreshCo stores in Kamloops and Kelowna, B.C., and Empire is in the process of opening stores in the B.C. communities of Williams Lake, Powell River and Vernon. While these B.C. locations were all slated to open in the spring, the pandemic slowed construction.

AWARDS

News to share? Tell us about your openings, comings and goings, etc. by dropping a line to

sfitzgerald@ensembleiq.com

June/July 2020 Canadian Grocer

Michael Forgione

Vancouver-based Sustainable Produce Urban Delivery (SPUD) has appointed PETER TYSZEWICZ as interim chief operating officer. Tyszewicz has held executive roles with food packaging and renewable energy companies. UNFI Canada has announced STACEY KRAVITZ will be its new president as of Aug. 2. Kravitz, currently the company’s vice-president of sales, will replace outgoing president PAUL BRENNAN who is retiring. In other UNFI news, ANDY HULL has been appointed vice-president, finance.

Peter Tyszewicz

DAVID JOHNSTON has been appointed executive vice-president, general manager at Acosta Canada. The CPG veteran will lead the Acosta Canada Grocery and Acosta Canada’s Natural Specialty Sales teams.

Stacey Kravitz

NANISS GADEL-RAB has stepped into the role of vice-president customer development at Unilever Canada. In her more than 20 years at the company, Gadel-Rab has held various roles, including channel and customer development director.

Naniss Gadel-Rab

Exceldor has named MICHAEL NORMAN as its vice-president of sales. Norman, who spent the last 15 years at Agropur, will be responsible for sales and development at the Quebecbased company’s chicken division.

Michael Norman

EVENTS

A new date has been announced for sial Canada . Organizers say the show is now scheduled to take place from Sept. 29 to Oct. 1 at Montreal’s Palais des congrès. Visit sialcanada.ca for the latest information.

Grocery Innovations Canada , presented by the Canadian Federation of Independent Grocers, will be held Oct. 27 and 28 at the Toronto Congress Centre. Visit groceryinnovations.com for details.

Canadian Grocer’s Star Women in Grocery Awards Breakfast and Star Women Mentoring Lunch will take place on Oct. 29 at Toronto’s International Centre. For tickets and information, please visit starwomen.ca FRESHCO

In May, The CANADIAN PRODUCE MARKETING ASSOCIATION (CPMA) revealed the winners of its 2020 NEW PRODUCT SHOWCASE. The Little Potato Company’s Easy Sides took top prize, winning Best New Product. Other winners were Mastronardi Produce (Best Snackable Product for Honey Bombs golden cherry tomatoes); Mucci Farms (Packaging Innovation for Paper Top Seal) and La Huerta Imports (Best Organic Product for WanaBana fruit puree).

MICHAEL FORGIONE is the new president of United Grocers Incorporated (UGI). Forgione, who was previously chief operations officer at Longo’s, replaces Denis Gendron, who is leaving UGI at the end of June.

GLUTEN-FREE. FLAVOUR-FULL. SANS GLUTEN. PLEINE SAVEUR.

PEOPLE SWEET SUCCESS

Tara Bosch’s SmartSweets celebrates confectionery, while kicking sugar to the curb By Carolyn Cooper Photography by Tanya Goehring

Who you need to know

ive years ago , when Tara

Bosch began connecting her health and mood to the amount of candy she consumed each day, she knew she’d have to drop sugar from her diet. “I’ve been a candy lover my entire life. But the excess sugar was really impacting how I felt about myself,” she recalls. “I ended up having a conversation with my grandmother, and she shared with me that she regretted having so much sugar over the years, especially from candy—something that we had enjoyed so often together. It was a shocking moment for me, and I asked myself, ‘Why can’t you feel good about candy?’” Bosch’s personal quest to develop a higher-quality, low-sugar version of her favourite treats led her to buy a gummy bear mould online and begin recipe testing in her own Vancouver kitchen. After “hundreds of failed recipes,” she created a low-calorie, all-natural candy that she believed was too good to keep to herself. “I felt so much conviction and passion for innovating delicious candy without all the sugar, so I really decided to lean in,” she says. “I dropped out of university, joined an accelerator program based out of HootSuite called The Next Big Thing, and just under a year later SmartSweets launched nationwide across Canada.” The company’s six products are cleverly crafted to mimic the taste, texture and mouthfeel of their traditional candy counterparts, minus the usual refined sugar, corn syrup, sugar alcohols and artificial ingredients. Instead, they include stevia; natural flavours and colours; fibres like tapioca and chicory root; and either gelatin (in the Fruity and Sour Gummy Bear varieties) or pectin (in the plantbased Peach Rings, Sour Blast Buddies, and Sweet Fish, SmartSweets’ No.1 SKU). Each 50-gram, single-serve bag of candy contains 19 to 21 grams of fibre and just three to five grams of sugar. “The plant-based products are definitely the growth drivers,” says Bosch, noting they were introduced in response to demand from SmartSweets’ considerable online fanbase. “Everyone’s asking themselves how they can engage with the consumer of today and tomorrow, and that’s through lower-sugar, higher- quality options,” she says. “From a consumer standpoint, people don’t want to compromise anymore; they want to be able to enjoy their favourite foods

and feel good about the nutritional profile. So giving people that freedom to feel good about something they love is a large part of our success.” Bosch adds that her vision “is to be the global leader in revolutionizing candy, and a radically smarter choice” for consumers. Part of being a candy revolutionary means pioneering new formats and ingredients such as allulose, a sweetener made from fruits such as figs and raisins, which enabled SmartSweets to successfully introduce its first non-gummy candy, Sweet Chews, in the United States (allulose is not yet approved for use here in Canada) during the height of the covid -19 pandemic. Before launching in April, Bosch says, “We paused and asked our online community, ‘How can we actually serve you during this time? What is most meaningful that you want from us?” Customers said they wanted something to bring “a smile to their day-to-day lives,” she says, so they decided to go ahead with the launch, albeit with a shift in marketing strategy. The three Sweet Chews fruit flavours were to be originally marketed as on-the-go snacks, but since people were no longer “on the go” during the pandemic, that would have to change. “We took the opportunity to pivot our messaging to introduce Sweet Chews as ‘a daily dose of sweetness,’” explains Bosch. “Buying patterns also show consumers are purchasing SmartSweets as an everyday snack, versus a moderately enjoyed treat, meaning we’re beginning to change the purchasing and consumption behaviours of the category. That’s great for retailers in terms of driving the velocity, and in terms of people being able to enjoy candy every day if they like to.” SmartSweets is now available in more than 23,000 stores across the United States and Canada, including Whole Foods Market, Loblaws and Sobeys. Sales in 2019 were $59 million, and are expected to top an estimated $95 million this year. In addition, says Bosch, “this year we celebrate our most impactful milestone to date, and that’s having helped people kick over a billion grams of sugar by choosing SmartSweets since we first launched on shelves. Now, as we think about our next stage of growth we’re asking ourselves, ‘How do we help people kick the next billion, and the next 10 billion, and the next 100 billion grams of sugar?’” CG

30 SECONDS WITH...

TARA BOSCH What do you enjoy most about the food industry?

The community. Typically in the better-for-you food industry there’s a “we all rise together” feel. That sense of togetherness has been really powerful, because we’re all on a mission to create better-for-you options.

What’s the best career advice you’ve ever received? One of my mentors said: “If you look at everything as an adventure, you’ll never be disappointed.” That perspective has been really grounding on days when you’re on top of the world and on days when it feels like the world is crashing down on you.

What do you like about being an entrepreneur?

The coolest thing is that there’s really no limit to the possibilities of what you can create in the world, and the value that you can create in people’s lives. One of the biggest rewards is seeing people’s joy, to see them getting as excited as I got in my kitchen when I was recipe testing.

Any advice for young entrepreneurs?

Just start—put one foot in front of the other. It’s OK to not know what you’re doing, or to not have all the resources surrounding you by day one, because if you commit to leaning into the terrifying feeling, and to just taking a step forward each day, you’ll get to where you’re meant to go.

June/July 2020 Canadian Grocer

u o y k n Tha s r e k o W e n i l t Fron

ON #FRONTLINEFRIDAYS, MUSKOKA BREWERY IS CELEBRATING OUR HEROES

10 PACKS SOLD = 1 PACK TO THE FRONTLINE *On #FrontlineFridays, Muskoka Brewery will be giving back and buying beers for frontline workers. For every ten packs (6x473ml or 12x355ml) of Muskoka Brewery Detour, Craft Lager, Mad Tom IPA and Cream Ale sold between July 19 and August 15, 2020, one 4-pack (4x355ml) will go to our heroes on the frontline, up to a maximum donation of 4000 4-packs. Muskoka Brewery will distribute donations each Friday from July 24th â&#x20AC;&#x201C; August 28th to frontline workers throughout Ontario who are over the legal drinking age. Proper ID may be required.

IDEAS

Retailers, suppliers, shoppers, insights

EMPLOYEE MENTAL HEALTH

GETTY IMAGES/JUANMONINO

Handling stress in pandemic times In this age of escalated anxiety, here’s how to ensure your staff can keep thriving By Rosalind Stefanac

ike it or not, we’re learning to function in pandemic times. But despite

the many positive efforts made by retailers to improve the health and safety of their staff, employees are still anxious—and front-line workers like in-store staff are especially so. To explore the pandemic’s ongoing impact in the workplace, human resources technology leader ADP Canada and Angus Reid launched a series of surveys starting in April that revealed 42% of front-line employees felt pressured to go into work during the pandemic (particularly those aged 18 to 34). Furthermore, only 27% of retail/foodservice/hospitality sector employees said they were getting additional mental health resources. Andrea Wynter, head of human resources at ADP Canada, says the heightened anxiety doesn’t surprise her. “In addition to uncertainty around the pandemic itself, June/July 2020 Canadian Grocer

IDEAS grocery workers are suddenly an essential service,” she says. “They can’t work at home and they’re exposing themselves and putting their families at risk by providing this essential service every day.” Wynter predicts that as the labour market starts to return to normal, employees will be approaching potential job opportunities with a different lens. “Did they [companies] put their employees first during covid-19 and will they have my best interests at heart is something they’ll be thinking about more than ever,” she explains. “Those who did will be seen as top-tier employers, even if they’re paying less.” Here are some strategies that can help employees feel secure and supported, especially in these unprecedented times. KEEP ON COMMUNICATING Even months into the pandemic, staff need and appreciate regular updates, says Wynter. “It’s not only about keeping them informed on the situation and the business, but about how you’re going to protect them and what will happen if they get sick,” she says. Save-On-Foods established a covid-19 Task Force, committed to dealing with staff queries. “Management and team members can access either a dedicated covid-19 telephone line or email address if they have any concerns amid the pandemic,” says Heidi Ferriman, vice-president, people & communications. Not only have staff been regularly consulted on how to best enhance their health and safety, she says they’ve provided valuable feedback as “we worked through updating our existing standard operating procedures and developing new ones.” MAKE MENTAL HEALTH PART OF THE DISCUSSION In addition to making mental health resources readily available to staff, make talking about mental health a “normal” thing, says Sarah Chamberlin, vice-president marketing and donor experience at the Centre for Addiction and Mental Health (CAMH). She says managers and other leaders who are more open and honest about their own experiences can help to normalize conversations around mental health. “It’s OK to say, ‘today is a tough day and I’m not liking it,’ and by sharing that experience, your staff will be more willing to share theirs.”

“It’s not only about keeping them informed on the situation and the business, but about how you’re going to protect them and what will happen if they get sick” 12

June/July 2020 Canadian Grocer

Organizations like CAMH have a wealth of free tools online, including tips on how to talk to frontline staff, including grocery workers. THINK OUTSIDE THE FRONT LINES While these are challenging times for staff in grocery stores, pandemic pressures are hitting head office staff pretty hard too, especially those who have been working from home for months on end. According to the ADP Workplace Insights surveys, 27% of remote workers said they were too busy to take breaks and 24% struggle with managing their mental health. “This is a new reality [of working] for many and means setting up their homes so they can be productive while creating boundaries between work and life,” says Liz Volk, chief human resources officer at Longo’s. She says the company made sure to survey staff to find out what issues were top of mind and how to make things work better. “Part of that included consistent schedules, getting breaks when they can and taking the time to refresh.” CELEBRATE THE WINS “Our customers are showing their support by posting signs on our windows, delivering coffee and other treats to the store teams, and making our stores a stop on their vehicle parades in support of essential workers,” says Save-On-Foods’ Ferriman. “We created a page on our internal team member site dedicated to celebrating and sharing these wins and messages of encouragement so that our team members can see how valued they are by their customers and communities.” At Longo’s, Volk says there is a similar push to share positive feedback from customers coming in via social media and the customer care centre. “Sharing good news helps people stay positive,” she says. The company also provided a financial boost (a $2 hourly increase to all hourly employees and one week of additional pay for those on salary until the end of June) to reward staff commitment and passion. “Showing appreciation of our teams, especially those who have stuck it out on the front lines, has worked out really well,” says Volk. TAKE ADVANTAGE OF OUTSIDE RESOURCES You don’t have to do it alone. Lean on the expertise of service partners in your communities and encourage staff to do the same. Save-On-Foods’ Ferriman says her company’s employee assistance program has been a godsend during the pandemic, providing staff and their families with health and wellness resources, including 24/7 counselling support. “We recognized through this pandemic the importance of reminding our team members of the tools and benefits that they have access to,” she says. “We also created a new covid-19 resource page on our team member website giving our teams easy access to any support resources they may need.”

BE GOOD BE GREEN BE DRY

MEET THE FIRST EVER, ALUMINUM - FREE, 100% NATURAL, ANTIPERSPIRANT WE ARE delighted TO BE CHOSEN AS A GRAND PRIX FINALIST!

IDEAS

Q&A

Grocery retail in the covid-19 era Canadian Grocer has been checking in with operators across the country to find out how they’re doing, how their job has changed over the last couple of months, and what long-term impact COVID-19 might have on their business. Here, we catch up with Longo’s president and CEO, Anthony Longo What safety protocols have you put in place that you will keep post covid-19? In situations like this, we must be flexible and adaptable to ensure we can properly protect our team members and guests. We are prepared to make all changes required and to keep those measures in place as long as necessary. While we want to get back to “business as usual,” the way we shop and interact with one another will be different for the foreseeable future. At this time, we expect the use of face coverings in public spaces will continue to be enforced. Guests can also expect to see continued limitations on store capacity as we begin to ease restrictions. Max capacity will not return for many months to come. As we begin to ease back into our regular services, some of the specialty Longo’s services like the deli, bakery and prepared food sections will be able to resume with the addition of safety measures like Plexiglass dividers, which have already been installed in some of our stores.

What lessons have you learned from covid-19? The entire industry has learned many lessons, but perhaps the most important is that we realize the importance of putting our team members first and alleviating their stresses. Without a core team that feels respected, heard and valued, we will be missing the mark. As a family business, our team members are always first and that is why very early on we invested in progressive preventative measures. We also learned being open and transparent is critical. We made the decision from day one that was going to be one of our guiding principles during this crisis. We believe our team and guests have a right to know what we are doing and when we have issues. Lastly, I’d say we have learned just how agile we could be when we needed to be. We made decisions in hours, for things that we would [previously] have studied and created committees for—months

of work. We learned to get the guiding principles right and then just go. We’ll be moving a lot faster in the future with our decisions.

What shifts in consumer behaviour have you seen? We have found that it has presented an opportunity for guests to reconnect in different ways with their food. People are baking and cooking more and experimenting with new ingredients—things that our busy lives didn’t allow for before covid-19. We know this heightened concern over cleanliness and disinfecting will certainly remain, potentially disrupting traditional modes of food and beverage sampling. On a much bigger scale, we can all expect a brand-new shopper, one with new adaptability, a sharpened set of shopping skills and higher expectations for their shopping experience.

How has covid-19 changed the way you’ll procure products moving forward? We have been very fortunate to not have experienced any major issues with the supply chain, though we continue to monitor the situation closely and restock as frequently as possible both in store and through Grocery Gateway, to ensure our guests can access the items they need. We have many long-standing relationships with our suppliers, which helps navigate these issues. The supply chain remains intact, prices remain level, and we continue to get products delivered to our stores daily.

covid-19 has accelerated online grocery shopping.

What does this mean for your business?

Longo’s is in a unique position when it comes to online grocery shopping and delivery, as we were the first major retailer to offer this service to guests when we made our acquisition of Grocery Gateway in 2004. It is true that we have been moving in the direction of online shopping for several years, but social distancing accelerated adoption in an unprecedented way. Prior to covid-19, the idea of shopping online for groceries was perhaps perceived to be a luxury. Though we had our core base, we know that some guests were hesitant to adopt this model. But in the very early days of covid-19, online grocery shopping made a leap from a luxury convenience to a necessity, especially for those with compromised immune systems and the elderly. At the end of the day, covid-19-related spikes in online grocery sales has introduced many new shoppers to online shopping. That could have a lasting impact, assuming consumers view their experiences as positive. For many, this may well become their new preferred method of receiving weekly groceries. CG

— edited for length and clarity by Kristin Laird

VISIT CANADIANGROCER.COM TO READ MORE Q&As WITH RETAILERS IN THIS SERIES

June/July 2020 Canadian Grocer

NEW

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FOOD BYTES

Joel Gregoire

Coping through food

Food’s role in helping Canadians connect has never been more important as canadians entered 2020, they could

not have foreseen what the new decade would bring. The lives of all Canadians—and indeed everyone around the globe—have been upended by covid 19, making the future even more difficult to predict. While predictions at this time are challenging even for the most confident of prognosticators, companies and brands can look to how Canadian consumers have, thus far, reacted to the current pandemic to map out their plans for moving forward.

CANADIAN ATTITUDES ON HEALTH AND WELLNESS DURING COVID-19 “In light of the covid-19/ coronavirus pandemic, which of the following statements related to health and wellness do you agree with?” % AGREE

24% I am taking more supplements/ vitamins to help boost immunity

27% I am eating more indulgent food and drinks to help me cope

SOURCE: MINTEL’S GLOBAL COVID-19 TRACKER – CANADA, APRIL 13-17, 2020 | BASE: 500 INTERNET USERS AGED 18+

June/July 2020 Canadian Grocer

At Mintel, we’ve been tracking Canadians’ reactions to covid -19 since early March. What have we learned? While anxiety levels rose quickly in March, they appear to have levelled off as of mid-May, in terms of consumers’ concerns about exposure and the impact of the virus on their lifestyle. While covid -19’s impact remains stark, our findings show Canadians are resilient and are adapting to what has become a new normal. Such findings can provide some comfort to grocers in that Canadians are responding to an utterly new shopping experience and have adopted a “search and extract” mentality, with 70% of Canadians making fewer trips to the grocery store and 69% spending less time at stores when they do make trips. For food and drink manufacturers looking to introduce new products on shelves, these findings represent a challenge. While grocers and manufacturers should by no means shun new innovation, it does highlight the need for brands to be cognizant of what Canadians are going through to inform their innovation and messaging strategies. Much of the innovation that has taken place in food and drink has related to physical well-being. covid -19 has accelerated a movement that Mintel has been monitoring, which is food’s relationship with emotional well-being. As Canadians practise social distancing, the link between food and drink and emotional health has never been so important to so many. For Canadians right now, emotional well-being is manifested in their ability to connect. Our research shows there is no other aspect of life that has taken on a higher priority than staying in touch with

family and friends. And when social distancing measures are relaxed, Canadians most look forward to spending time in person with family and friends. While there’s been a general increase in the number of food and drink launches incorporating ingredients that promote calmness and stress reduction in recent years, food and drink’s more general role in offering comfort at this time is readily apparent. When asked about health and wellness in the context of the covid -19 pandemic, just over a quarter of Canadians say they are eating more indulgent food and drinks to help (them) cope, which is slightly ahead of the number of Canadians who say they are taking more supplements/vitamins to help boost immunity. These findings suggest Canadians are looking to balance their emotional health with their physical health. Feedback also shows that nearly half of Canadians claim to be cooking more from scratch, and while this is undoubtedly influenced by the fact Canadians are eating out less, it can be argued that cooking can be therapeutic in a time of great uncertainty. In this context, baking’s surge should come as no surprise given that 86% of Canadians who bake agree that baking for someone is a way to show love, while three-quarters agree that baking with family/friends allows them to connect emotionally. A path to relevance in an era of uncertainty is in providing consumers with a sense of grounding. Brands that help consumers tend to their emotional needs in addition to their physical needs can come through this tumultuous time in an even stronger position. CG

Joel Gregoire is associate director, Food & Drink at Mintel, the world’s leading market intelligence agency. Based in Toronto, Joel researches and writes reports on Canada’s food and drink industry. @JoelDGregoire

EATING IN CANADA

Kathy Perrotta

New reality sparks new consumption habits Forced to spend more time at home, consumers are changing how and what they eat consumers are balancing shifting

needs by prioritizing fresh and less processed options, and aspiring to higher quality experiences and more transparent communication—all while seeking experiences that provide pleasure and enjoyment. The result of this struggle is the emergence of a new hierarchy of values—a contemporary consumption code. Our Ipsos FIVE Consumption Diary Study (monthly tracking of consumption behaviour), however, has revealed that the impact of the pandemic-prompted quarantine has accelerated the importance of some trends while reversing the significance of others. Here are some of the shifting trend dynamics: SHIFTING SPHERE OF INFLUENCE (trend acceleration) Seismic demographic shifts in Can-

ada have had a tremendous impact on our food culture. Key to these changes is the rising prominence of aging millennials who are increasingly shaping family dining habits. Amid the current confinement, the importance of this population segment is on the rise again as many of these consumers balance work, home-schooling and daycare priorities. While half of the items consumed today are reported to be made from scratch, a rising share of heat-and-eat options such as frozen pizza (+17% versus Mar’20) are being consumed at both lunch and dinner, led by young family households seeking convenient solutions. Future millennial food and beverage choices will also be influenced by household finances. Younger consumer cohorts like gen Z and millennials report

being much more concerned about finances and their ability to pay bills, while 65% report they will be cutting back on unnecessary spending. PERSONALIZED HEALTH AND WELLNESS (trend acceleration) The expanding definition of

what is healthy has evolved as consumers look beyond solely evaluating food and beverage options for their nutrient values (both good and bad) to seeking a variety of targeted physical and emotional benefits from their choices (energy, mental focus, comfort, etc.). Consumers are also increasingly vetting product healthfulness based on the societal and systemic impacts of our food and beverage choices. We expect the importance of meeting customized health requirements will continue to rise—our April tracking reveals one in four Canadians reports eating healthier to boost their immune systems. In tandem with healthy choices is the need to meet a variety of personal dietary regimes and routines. Today, more than two-thirds of consumers (38%) report a dietary restriction or sensitivity that impacts their food choices. INSPIRATION AND ENJOYMENT (trend acceleration) Undoubtedly, the lockdown has

placed a new importance on traditional eating regimes. Fewer meals were being skipped in April compared to a similar time periods over the past five years, rendering meal occasions as foundational pillars helping define our daily routines. Consumers are snacking more often, too, both in the afternoon and evening,

and indulgent snacks like potato chips, chocolate and cookies are benefitting. Over a third (34%) of consumers report they are both baking more often and serving more indulgent options to family members to boost the household mood. Back-to-the-kitchen routines are inspiring more energy and time in consumers’ home-food preparation. They are also using appliances like the barbecue more often. In the chilly month of April, across most of the country, grilling rates were up more than 30% (compared to April 2019). We are also consuming more alcohol: 23% of consumers report drinking more alcohol than normal over the past two weeks. Driving this is the desire to relax, the need to relieve at-home boredom and the inclination to treat oneself. FOODSERVICE SOLUTIONS (trend reversal) Our slow move from home to foodservice solutions over the past five years—triggered by experience, convenience and authentic cuisine options—came to a grinding halt in April. Declines in both traffic and dollars approached more than 50% when compared to April 2019, according to Ipsos Foodservice Monitor. As a variety of re-engagement options ramp up to ignite a return of traffic, future economic uncertainty coupled with concerns over safety will require the industry to create new offers steeped in value, confidence and convenience. These are but a snippet of insights into the current zeitgeist of behaviours and habits in the early days of the lockdown. As consumers continue to adjust and adapt to the flux of change around them, it is critical that companies understand how consumers are navigating choices to determine which shifts actually stick as we move through 2020 and beyond. CG

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

June/July 2020 Canadian Grocer

Deadline for Submissions: August 14, 2020

Masters in the Making T

he Master Merchandiser Awards honour and recognize the best point-of-sale merchandising in the grocery industry, and enable retailers and supportive manufacturers the opportunity to stimulate purchases by building effective displays, promotions and events. In 2019, there was a record number 7,438 submissions, with winners chosen by a panel of experienced industry judges. Displays were evaluated for their creativity/visual appeal, effective use of signage, display shopability, effective cross merchandising,

and support of manufacturer compliance. “As a retailer sometimes you forget how important creative merchandising is in building incremental sales and customer loyalty,” says Tom Shurrie, President and CEO of CFIG. “Participation in this program encourages employee team bonding while creating a stronger shopping experience for customers, and that way everybody wins.” To submit your merchandising display for the 2020 Master Merchandiser Awards, visit mastermerchandiser.ca

Multi-Store Internal Contest

Themed Event

Medium Surface Gold IGA Extra Pierre Patry, Vaudreuil, QC Pierre Patry, Marc Theriault, Robert Belair Event for the 2019 Superbowl, with many participating players like General Mills (Old El Paso), Pepsico (Lays, and Quaker) and Coca-Cola.

Large Surface Gold Colemans Newfoundland Drive, St. John’s, NL Coleman Family 1st place winner for Earth Day promotion.

Small Surface Gold South Hill Fine Foods, Moose Jaw, SK Perry Chambers and Store Team Back to school themed Saputo display. Large Surface Gold Save-On-Foods Orchard Plaza, Kelowna, BC Don Gandy, Eric Falkenberg and Store Team This display for Superbowl 2019 was inspired by the logo that Pepsi featured on its Superbowl POS material featuring two helmets back to back with the football in between.

Medium Surface Gold Save-On-Foods, Edmonton, AB Roland Kostic and Store Team For Chinese New Year a dragon was built in an “S” shape using Del Monte juice. The “S” shape is symbolic for the culture resulting in a well received display by the community.

Perimeter Display

Small Surface Gold Sharpe’s Food Market, Campbellford, ON John, Steve and Mike Sharpe This Blue Jays themed, BBQ display was set up from May 2 - August 5, 2019 featuring Schneider’s Red Hots, All Beef, Juicy Jumbos All Beef and Original Weiners, Schneider’s Smoked Sausage and Smokies merchandised in a side bunker and cross merchandised with Wonder Hot Dog Buns. Medium Surface Gold Fresh Street Market, West Vancouver, BC Alex Lee and Store Team Nature’s Path Eco pacs - Front Door Display.

Large Surface Gold Marché St. Janvier, Mirabel, QC Daniel Reiley A refrigeration bunker in the store entrance filled with sausages and hot dogs along with a large display of Maple Leaf Precooked Bacon. It also includes Pepperettes and Hygrade Pepperoni for a display totaling 200 Maple Leaf products.

Multi-Manufacturer

Small Surface Gold Sun Valley Market, Toronto, ON Jim and Vicki Bexis Superbowl display featuring Coca-Cola, Nestle, Old Dutch, KraftHeinz, and Westons.

Single Manufacturer

Small Surface Gold Sun Valley Market, Toronto, ON Jim and Vicki Bexis Coca-Cola Holiday Display. Medium Surface Gold Quality Foods, Parksville, BC Darcy Ginter and Store Team Hockeyville! Celebrating the community spirit of the sport that brings us together.

Medium Surface Gold Crowfoot Co-op, Calgary, AB Gary Friend and Store Team Display featuring McCormick French’s yellow mustard, French’s BBQ 4 pack, Franks Redhot and LaGrille spices along with various KraftHeinz skus Large Surface Gold Dessureault Your Independent Grocer, Ottawa, ON Carl & Nathalie Dessureault, Rene Larocque and Team Set up a Christmas themed display at entrance to the store. For 4 weeks with over 350 cases.

Large Surface Gold Save-On-Foods, North Vancouver, BC Sean Cantin, Phil Miscio and Team The Save On Foods and Campbell Company of Canada partnership in support of local Food Banks continues into its 12th year of retail programming through elevating awareness of local hunger issues and inspiring our local communities to help alleviate hunger.

COVER STORY

metro’s momentum

By Shellee Fitzgerald • Photography by Chantale Lecours

CEO Eric R. La Flèche on delivering a great customer experience, e-comm and what learnings can be taken from the global pandemic LAST YEAR WAS A GOOD YEAR FOR METRO. Amid fierce competition, the retailer racked up sales of more than $16 billion at its network of 1,600 stores. It stayed on track with its integration of Jean Coutu, the pharmacy chain it scooped up in 2018 for $4.5 billion. It opened 10 food stores and completed 20 major renovation projects at existing locations, while also making progress on its $400-million modernization project of its Ontario distribution network, breaking ground on a new fresh product distribution centre in Toronto last fall. But at its Annual General Meeting in late January,

the retailer’s president and CEO, Eric R. La Flèche, told shareholders that while proud of Metro’s success, “We are taking nothing for granted because competition is still very stiff and customer expectations are changing and increasing constantly.” In early May, as grocers continued to grapple with covid -19, La Flèche spoke with Canadian Grocer about everything from Metro’s mission to provide a great customer experience to the extraordinary business of selling groceries during a global pandemic, and what learnings can be taken from the crisis. Here are edited excerpts from the interview: June/July 2020 Canadian Grocer

COVER STORY Metro has achieved a lot of success over the last year. What would you say has put the company in a position to achieve that success? I think it’s many things over a long period of time. We take a lot of pride in our long-term track record. We’ve assembled a good team, we have invested every year in our store network and our infrastructure, so we’re reaping the benefits of our decisions over the long term. We focus on our key pillars of customer focus, execution, financial management and team— this is really the basis for our results. We don’t win every time and it’s far from perfect, but over the long term it has served us well and we’ve been able to grow and be a better company.

Speaking of Metro’s customer-focused strategy, according to Léger’s WOW Index (which evaluates customer experience), Metro ranked high in 2019. What’s behind these results? It’s years of work and continuous improvement. I’ll say, 12 years ago we implemented our customer promises and we measured and rewarded [our] people based on that. In fact, most of our people’s annual incentive plans have a component related to customer satisfaction—so it’s on everybody’s mind. It’s our mission to provide a great customer experience. At the end of the day it’s all about setting objectives, measuring them and rewarding them—that gets you results.

How has the integration of the Jean Coutu drugstore chain been progressing? Why was this acquisition so important? We’re far along in the integration, but we’re not completely done and, unfortunately, we’ve been set back a few months because of covid. Jean Coutu was a strategic acquisition for us, for sure. We were already in pharmacy distribution and franchising in Quebec with Brunet, but we wanted to grow pharmacy. Jean Coutu is the No. 1 brand in Quebec—it’s a fantastic brand, one of the most admired companies, year-in, year-out. It’s been a good fit. The integration is on-track and the synergies/objectives we set are being met: we’re at $65 million, on a $75-million target.

Pre-COVID-19 there was growing urgency around sustainability, but with the current crisis it seems to have taken a bit of a backseat. Backseat, yes. We’re talking a little less about plastic these days than we were. As a matter of fact, we’re going backwards a bit—we’re using plastic bags again, a lot more than we would like. I hope that’s not the new normal, but it’s the normal right now, unfortunately.

Can you talk about Metro’s progress in this area? We’ve been at it [sustainability] for a long time and in a more focused way for the past 10 years. We’ve done a lot to improve our performance, and we’re still trying to improve because it’s the right thing to do and our customers want it. I’m pretty proud of what we’ve done so far—the policies we’ve adopted and are enforcing in sustainable fisheries, packaging, printed

June/July 2020 Canadian Grocer

materials, energy consumption and food waste. It’s getting tougher to reduce every year because, like I said, we’re getting better, but we still have work to do. We’ve made commitments to reduce food waste to zero. We’ve made commitments to reduce plastic and packaging, and we will meet those objectives. There might be some delays because of covid, but we’re firmly on that track. There’s no going back.

A pain point for most retailers is staffing. How is Metro working to acquire, retain and develop talent? It’s a lot of work. Dedicated teams in HR are looking for talent all the time. We’re very proactive about attracting people and hiring people through job fairs, recruiting in schools, sponsoring competitions in business schools. We think we have an attractive employer brand that people trust and that people want to join. But it does take a lot of work and it takes a structured program. The days of finding people through someone dropping off a resume? Those days are gone. You have to be more proactive. And then when we acquire new people we have to develop them and keep them motivated so we have mentorships, recognition programs and special assignments—all sorts of good practices that will retain and develop the workforce. Attracting the right people is always a challenge, and it’s a big priority for us, for sure.

With COVID-19, grocery retailers are facing an extraordinary situation. What learnings will Metro take from this crisis going forward? Well we are learning every day and we’re not finished learning because the crisis is not over. A few learnings: I’m pleased with how the team has pulled together and stepped up; it’s been great to watch. I think our crisis management plan worked. We always prepare and have contingency plans when we have strikes or threats of strikes or even pandemics, which we’ve had before with SARS—so we had a pandemic plan that we dusted off and at the end of January we started working on that. We put together a multidisciplinary team of about 10 people from all three of our main divisions and services so we have all sorts of people around the table making decisions every day and it’s been working well.

Anything else? We have a good supply chain; we take it for granted, but in a crisis like this you are really tested. Canadian retailers, vendors and manufacturers are working well together, supporting each other and we’re really proud of our supply chain. There are issues. It’s not easy every day but, overall, it has gone pretty well. Another learning: you can’t take anything for granted. When crisis hits, you have to have good support and good collaboration in the industry and I think we did that in Canada. We also learned that we can work from home, more than we thought. It really forced us to adapt how we work. It’s been successful, it’s been

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COVER STORY productive. Personally, I miss the office and the collaboration and seeing people and being in the stores more, but I have to say that telework has worked and will be part of the new normal. I think we will have to be more flexible [with employees] going forward; we’ll have to think about that a little more.

COVID-19 has accelerated online shopping. Can you talk a bit about the company’s investment in this area? We’ve been at e-commerce for over three years now; our model is the store-pick model, and we do home delivery from a few hub stores and that model was serving us well. It was swamped with the crisis, and truly the surge and demand for e-comm surprised everybody—us too. We had to adapt really quickly and our people worked extremely hard to double our sales, but even with that we were not meeting the level of demand. We were at capacity so we added ancillary services like M Priority [introduced in April] which is a web-based service for seniors, mostly, and for people who are quarantined or those with limited mobility. It’s available at almost 100 stores in Ontario and 135 Metro stores in Quebec. It’s a service where customers can go on the web and fill out an order— not an e-comm order, it’s not a transactional site. We then send the order to the local store and the local store picks the order and calls the customer for payment and arranges for pick up or delivery. That has added some capacity to our e-comm service. It’s been well appreciated by seniors. And we also formed a partnership with Cornershop [an on-demand grocery delivery service]. They come in with their pickers/drivers to our stores and they deliver to the customer’s home. So that’s, again, adding some e-comm capacity for us. covid -19 has accelerated trial and awareness of e-comm on the food side. E-comm was very modest prior to [covid] so we’re a bit further down the road.

There’s a lot of talk about what the “new normal” looks like, particularly as it relates to customer expectations. Do you think they will be higher going forward? Well, I think they’re higher every year. As for the new normal, it’s a bit early to say as we’re still in this, but we expect some changes or behaviours will last longer. People will expect our stores to be very clean and that we keep measures such as the Plexiglass and handing out hand sanitizer as you walk into the store. I don’t think that’s going away anytime soon.

Out of crisis, opportunities often emerge. What opportunities do you see emerging from this situation? We were fortunate in the sense that we provide an essential service and people are still coming into our stores. Other retailers are going through much, much, tougher times. The opportunity for us is to serve our customers well—it’s an opportunity to solidify the trust of our customers towards our brand; for me, that’s a key one. And reinforcing the bonds with our employees is the second one. The crisis has been a

June/July 2020 Canadian Grocer

rallying cry. People thrive under pressure and in crisis mode more than anyone would expect, especially our store employees and our warehouse staff. Another opportunity is that people at home are cooking more so there’s an opportunity for us to make sure they keep those new habits; I don’t want to be too funny with wordplay here, but there’s an opportunity for us to “nourish” those eat-at-home habits. There are other opportunities, too. [Consumers’] health focus, which was there before the crisis, will be even more reinforced. This is a health crisis we’re living through, so that’s going to be more topof-mind than ever, post-crisis. It’s an opportunity for us as a food and pharmacy retailer to respond to those health desires or needs of our customers.

As Metro positions itself for the future, what will be the key areas of focus? Our priorities are to finish the Jean Coutu integration. We hit a roadblock with covid, but it’s a key priority for us to complete the integration. We’re almost there. The other big strategic front for us is the modernization of our distribution network. We announced a couple of years ago in Ontario a major investment in Toronto to build new distribution centres, mostly automated, for fresh and frozen products, so that’s underway. Thank god, construction wasn’t stopped [due to covid -19] for too long in Ontario, so that’s proceeding. We may experience a bit of a delay because our partner for technology is a German company and we need the German experts to come in and install the technology. They’re not travelling these days, so there are a few delays there, but it’s a big priority for us to modernize distribution, starting with Ontario. And in March, just before the crisis hit, we announced a similar investment in Quebec, which will start next year [with the construction of an automated distribution centre in Terrebonne]. A big investment for us—it’s $800 million for the two provinces, to really add capacity, improve efficiency to serve our stores better and address labour challenges with more automation. On the retail front, we’re very focused on continuing to invest in our stores, building the right merchandising programs, a lot of it centred on health and wellness. And e-comm—it was already on our strategic priority list, and it’s clearly still there.

COVID-19 aside, what would you say is a big challenge facing grocery? One of the biggest challenges is to meet the evolving needs of our customers, whether that’s e-comm or brick and mortar. It’s a challenge facing all retailers. You need to be ahead of them [customers], but not too far ahead of them; you have to be a little bit ahead and serve where their needs are or where their needs are going. The challenges are not going to change. It’s always been that way. In retail, you have to evolve constantly. CG

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IN-STORE ENVIRONMENT

the pre-covid-19 world, talk of the “store

of the future” was kind of exciting. From interactive touch screens and in-store greenhouses, to wine bars and guest chefs, retailers could transform the boring chore of getting groceries into a food and shopping adventure for their customers. As we ushered in the futuristic-sounding 2020, no one could have imagined that supermarkets would soon resemble a scene from a dystopian film. But, here we are: mask-wearing shoppers keeping six feet apart as they line up; security guards at the door controlling traffic and enforcing the use of hand sanitizer; floor stickers indicating which way to walk and where to stand; cashiers wearing plastic face shields behind Plexiglass barriers; and an undercurrent of stress and anxiety permeating the store. By all accounts, Canadian grocers have adapted quickly to the global pandemic, implementing measures like the above to ensure the safety of customers and employees. The questions now are: How different will the in-store environment be in the future? And what pandemic-related trends will lead to lasting changes? “As we figure out what the new normal looks like in grocery, what we know for sure is customers feeling safe is the most important priority,” says Marty Weintraub, partner and national retail lead at Deloitte. How long that will be at the top of retailers’ agendas is anyone’s guess. “Until we have a solution for the virus, whether that be a vaccine, a treatment, or a curve that’s significantly flattened, people are going to be preoccupied with safety and convenience,” he says. It may be far from the pleasant, experiential

wonderland many retailers had envisioned, but there are still plenty of opportunities for grocers in this new retail environment. Here’s a look at what’s changed, what’s coming, and what might be here to stay:

Product assortment

While things like panic buying and panic baking will be just blips on the covid 19 timeline, many changes in product needs and assortments will be more permanent. Giancarlo Trimarchi, partner at Ontario-based Vince’s Market, says no department in the grocery store will be left out. “I think every department, as a whole, has pretty significant adjustments coming their way,” he says. In the centre aisles, covid-19 could mark the end of the era of endless consumer choice. Beginning in midMarch, many food manufacturers focused on core SKUs to streamline production and keep up with a surge in consumer demand. A U.S. survey by Food Industry Executive found that nearly three quarters (72.5%) of processors have changed their business strategies in the wake of the pandemic, with many focusing on core brands, best sellers and more local suppliers. “Different flavourings and different sizes have fallen off big time, as [manufacturers] go back to core listings of certain brands,” says Trimarchi. He believes manufacturers will begin the process of SKU rationalization, deciding which products to keep and which ones to discontinue permanently. “I’d be surprised if we saw some products come back because [manufacturers] put all their focus into those core SKUs,” he says. “I think sometimes you try and hold onto SKUs, but now that they’re gone, it’s going to be hard for them to fight their way back.” Gone too are self-serve food options, due to concerns about contagion and germs on surfaces and utensils. Like most grocers, Vince’s Market locations have closed their hot bars and salad bars, and are serving up pre-packed ready-made meals and salads instead. In the bakery, the practice of packing your own buns has also been bagged: items are now sealed and pre-packed. “The days of bun bins and open-air croissant racks—I can’t imagine those coming back,” says Trimarchi. The same goes for hot bars and salad bars, as new safety habits will be hard to break. “That will probably be a

THE NEW IN-STORE ENVIRONMENT

Safety and convenience are defining today’s customer experience, and many pandemic-related trends are here to stay By Rebecca Harris • Illustration by Sébastien Thibault 26

June/July 2020 Canadian Grocer

By all accounts, Canadian grocers have adapted quickly to the global pandemic, implementing measures to ensure the safety of customers and employees. The questions now are: How different will the in-store environment be in the future? And what pandemic-related trends will lead to lasting changes? long-term effect,” says Trimarchi, adding that the shift to ready-made meals has actually been good for business. “You can protect your shrink when you’re not in a service environment, so it’s a good thing.” Product assortment is also shifting toward more local food—a trend that’s been around for years but kicked into overdrive during the pandemic. A May 2020 article from Nielsen notes that local origin has become an important accelerator in brand/product decision-making during covid -19 and will remain a major choice driver into the future. “Much of this has been due to interrupted global supply chains, as well as the need for local transparency and trust of ingredients and sourcing,” the article states. A recent survey by Deloitte found 47% of Canadian shoppers plan to buy more locally sourced items going forward, even if they cost a little more. In addition, 41% said they will purchase more from brands that have responded well to the crisis. “The notion of the socially-conscious shopper is going to be an important and emerging trend, as well as buying and sourcing locally,” says Weintraub. Price is also going to be important, as many Canadians are faced with loss of income and the country stares down a recession. “We’re seeing the return of bargain hunting,” says Weintraub. “Private label has been resurging for some time, and we’ll see that curve steepen because of recessionary buying.”

Store layout & merchandising

As consumers want to minimize the time they spend in stores, store layout and merchandising can play a big role in helping customers get in and out of stores safely and efficiently. “The way that guests shop has certainly changed,” says Joey Bernaudo, senior director merchandising, retail food service at Longo’s. “The leisurely stroll up and down aisles to discover new ingredients has been eclipsed by the need to find the essentials for the week and get home.” A merchandising concept Longo’s introduced last year is well-positioned to cater to in-and-out shoppers. “In 2019, we launched our meal kiosk pilot

June/July 2020 Canadian Grocer

inside Longo’s Maple Leaf Square, which features a recipe and the coinciding ingredients for easy meal planning and preparation,” explains Bernaudo. “We expect this type of concept to continue to expand across stores as we revisit the traditional model of the grocery store.” By now, most grocers have made changes to store layouts to encourage physical distancing and limit interactions between customers and employees. That includes adding one-way directional signs and widening aisles so shoppers can keep their distance from one another. A Retail Council of Canada report, “Road to Recovery Playbook,” notes that it’s “critical for stores to think about flow of traffic through the store and change store layouts to avoid congestion.” For now, Deloitte’s Weintraub doubts we’ll see a major overhaul in store layouts because of the complexity and cost involved. “We might see that in proofs of concepts or in certain parts of the store, perhaps in fresh,” he says. “But I’m not sure we’ll see a wholesale rewrite of how grocery stores are laid out quite yet, until we learn more about how this pandemic plays out in terms of length and severity.” One area that’s set to undergo change is the checkout area, as the world goes touchless to minimize the spread of germs. “As consumers become more comfortable with tap-and-go payments, and retailers adopt frictionless technology such as automated checkouts, we’ll see a very different front of store,” says Amar Singh, principal analyst at Kantar Consulting. In addition, impulse items will likely have to find a new home. “Right now, these are tough times for the front-of-store categories because of the safety measures and people wanting to get out ASAP,” says Singh. “So, categories such as confectionery and magazines will have to find locations within the perimeters or even the centre of the store.” Even when covid -19 is behind us, in-store safety measures could be here to stay. “The whole practice of sanitization and social distancing has now become part of our dna. It’s not going away,” says Jean-Pierre Lacroix, president and founder of Shikatani Lacroix, a Toronto-based retail design and experience firm. Not only are epidemiologists predicting more waves of covid -19, Lacroix notes there’s been an acceleration of pandemics and epidemics in recent years, such as h1n1 and Zika. “They were happening every 20 to 30 years, and they’re now happening every two or three years,” he says. “So, I think people are becoming a lot more cognizant of safe distancing as a normal rule.”

In-store technology

covid-19 may usher in a new age of in-store technology, as shoppers want an experience that’s safe and seamless, whether in the aisles or at the checkout. While in-store tech isn’t new, the pandemic is expected to accelerate adoption among major grocery retailers. “It’s not that retailers have got a major change of course, they’ve just got to accelerate the course they’re

IN-STORE ENVIRONMENT on,” says Lacroix. “For example, people don’t want to touch PIN pads, so we’ll see a bigger investment in technology, especially touchless payment, mobile wallets and facial recognition payment technology.” Deloitte’s Weintraub says retailers also have to think about associate safety, not just customer safety. “We’re going to start to see a doubling down of all types of automation,” he says. For example, digital price signs could replace one of most labour-intensive processes in stores: manually changing thousands of prices every week. That will make it safer for employees, as they won’t be next to customers in the aisles, and it will be more cost-effective for retailers, says Weintraub. “There are technologies that for a long time either weren’t business-case eligible, or just didn’t get the right attention, but now they will.” When it comes to creating a more seamless and convenient shopping experience, navigation will go mobile. Kantar Consulting’s Singh says grocery retailers will look to interactive apps that have a layout of the store, tell shoppers where products are located, and how to get to them. “While we’re still combating the covid-19 crisis, shoppers are trying to find items

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in the most efficient way possible to spend less time in the grocery store,” says Singh. “For retailers, it’s a more efficient way to guide consumer traffic [than arrows on the floor].” Two in-store developments will stem from the rise of online shopping, which spiked during the pandemic. First: the rise of robots. While a few U.S. retail chains are already experimenting with in-store robots to do tasks like counting inventory and cleaning floors, robots could one day be deployed to pick customers’ online orders. “It’s not going to happen in the next year or two, but in the long run, a retailer’s investment in these technologies will be more justifiable instead of paying associates,” says Singh. The second shift arising from e-commerce is that in the long-term, lower-margin SKUs will only be available online, says Singh. That means—retailers rejoice—the store will be more experience-driven once the pandemic is behind us. “Transactional buying will shift online and consumers will go to the store to experience new things,” he says. “It will be about discovery, finding new items and innovations, more sampling and more interactive opportunities ... The store is truly going to be the hub of experiences.” CG

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SIM PLY GRA ND grand prix New Product Finalists

SIMPLY GRAND One hundred and twelve impressive products have been named finalists in the 27th edition of the Canadian Grand Prix New Product Awards.

The Retail Council of Canada’s Canadian Grand Prix New Product Awards celebrate the most notable new food and consumer goods products—both national brands and private label— launched in the Canadian market in 2019.

“Now more than ever, Canadians are seeking new products to keep the home menu diverse and exciting,” said RCC president and CEO Diane J. Brisebois. “This year’s products are outstanding and our panel of 34 jurors were especially impressed with the quality and flavour profile of these products.” Among this year’s contenders: dark chocolate dessert hummus, quinoa puffs, goat milk ice cream, cauliflower crust pizza topped with Beyond Beef Crumbles and dark roasted peanut butter. Read on to see the full list of finalists:

June/July 2020 Canadian Grocer

grand prix New Product Finalists

Consumer Packaged Goods Finalists

A Lassonde Inc. || Oasis Infusion Herbs, flowers and spices are infused in cold water to create this refreshing beverage, which is slightly sweetened with real fruit juice. Available in three varieties: Strawberry Hibiscus Basil; Tangerine Lemon Thyme; and Lemon Ginger Honey. Agropur || Olympic Organic Kids Touted as the first organic yogurt for kids in Canada, this product is naturally sweetened with organic fruit and made with 100% Canadian milk from grass-fed cows. Olympic Organic Kids is available in three varieties: Raspberry, Blueberry, and Strawberry Banana. Bimbo Canada || Takis Outlaw According to a description on its website, these tortilla chips are hotter than Texas in July. Takis Outlaw deliver a bold, spicy chili barbecue flavour that its makers say take chip lovers “on a wild ride beyond the ordinary.” Bonduelle || Arctic Gardens One Pot With its mix of vegetables and healthy ingredients, Arctic Gardens One Pot pouches serve as a nutritious base for a meal. The consumer need only empty the frozen contents of the pouch into a pot, add a little stock, let simmer for eight minutes and it’s ready to eat. Available in flavours such as Pad Thai and Southwest Quinoa.

The Grand Prix winners will be revealed later this summer

June/July 2020 Canadian Grocer

Conagra Brands || Gardein Breakfast Saus’age Patties According to its maker, Gardein Breakfast Saus’age patties are packed with plant-based protein and are exploding with flavour. These vegan patties cook in just 12 minutes. Crazy Richard’s || Wholly Rollies Each pouch of Wholly Rollies contains 10 frozen protein balls made with just five ingredients. Available in Peanut Butter & Strawberry, and Peanut Butter & Cacao varieties, these snacks can be eaten frozen or thawed.

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grand prix New Product Finalists Fancy Pokket Corporation || Gluten Free Loaf For more than 30 years, Fancy Pokket has been making high-quality bakery products. Its gluten-free white loaf is reminiscent of classic sandwich bread, while the multigrain loaf, made with hearty flax, sunflower and pumpkin seeds, is a source of fibre.

GoGo Quinoa || Gogo Quinoa Puffs GoGo Quinoa is generating buzz for its savoury GoGo Quinoa Puffs. Boasting a short list of organic ingredients, this snack, which is also gluten free, offers six grams of plant-based protein per serving and three grams of fibre. Available in Sriracha, Pink Salt & Vinegar, and Vegan White Cheddar.

Froba Products || Yellofruit It may look like ice cream, but Yellofruit is a non-dairy frozen banana dessert, made with only organic, plant-based ingredients. Banana is the first ingredient in all Yellofruit varieties, giving it a unique flavour and creamy texture. Available in three flavours: Monty’s Favourite Strawberry, Eddy’s Favourite Chocolate, and Holly’s Favourite Mango. Certified Vegan by Vegan.org and made with Certified Organic ingredients.

Halvana North America || Tahini Squeeze The secret behind Halvana’s nutrient-dense Tahini Squeeze rests in an artisan manufacturing process where sesame seeds are fire roasted and stone ground to create a velvety-textured, intensely flavourful spread. Unlike the messy and difficult-to-use commercial tahini sold in jars, this product comes in a convenient bottle so it’s ready to be “squeezed on everything.”

The Green Beaver Company || Aluminum Free Natural Antiperspirant The Green Beaver Company says its 100% natural origin antiperspirant is made using a revolutionary formula that delivers an effective product so there’s no compromise between an antiperspirant that works and one that is naturally safe. This product offers clinically proven wetness protection, 24-hour odour protection and is hypoallergenic.

June/July 2020 Canadian Grocer

Healthy Crunch || School Approved Bars Healthy Crunch School Approved bars are allergen-free, tree nut-free, peanut-free, gluten-free, and vegan. Healthy Crunch says what sets its bars apart from the competition is that they have 50% less sugar compared to the national leading brand. In fact, these snacks have only 2 grams of sugar per bar as well as double the fibre and protein of other brands. They are also made with veggies and contain added probiotics to help support gut health.

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grand prix New Product Finalists Nestlé Purina Petcare || Friskies Lil’ Soups An ideal option between cat food and treats, this lickable cat food complement delivers the taste of real tuna, real salmon, or chicken and butternut squash (depending on the variety) in a velvety broth. Made with high-quality ingredients consumers can feel good about serving their furry friends. Nestlé Waters || S. Pellegrino Essenza S. Pellegrino Essenza is described as a beverage offering a twist of Mediterranean flavours with gentle bubbles. This naturally carbonated natural mineral water comes in varieties such as Dark Morella & Pomegranate and Tangerine & Wild Strawberry. Quality Cheese || Bon Secret From Quality Cheese comes this washed rind cheese made in the French tradition with fresh Ontario milk. Bon Secret is hand washed three times before it is packed with a bacteria culture, which gives the cheese a pleasant aroma and creamy soft centre, rivalling any import from France. Rana Meal Solutions Canada || Giovanni Rana Refrigerated Filled Pastas

Rana is bringing the essence of Italy to Canada with its fresh pasta. Made in Italy with thin pasta, which Rana says is ideal for bringing out the flavour of its high-quality (no preservatives, no GMOs) fillings. Available in six varieties and presented in attractive artisan craft paper packaging. Smucker Foods of Canada || jif Dark Roast Creamy Peanut Butter Jif fans have another peanut butter option—Jif Dark Roast Creamy Peanut Butter. Each jar of this peanut butter is packed with more than 1,300 peanuts that are roasted longer to unlock a bold and rich flavour. Udderly Ridiculous Inc. || Udderly Ridiculous Goat’s Milk Ice Cream This gourmet ice cream begins with fresh Ontario goat milk, cream and curd and is blended with clean-label and locallysourced ingredients. Goat milk is low in lactose, 89% lower in casein, and higher in potassium, magnesium, vitamins A & B6, protein, iron and calcium (compared to cow milk), making it a nutrient-dense and allergenfriendly alternative.

June/July 2020 Canadian Grocer

grand prix New Product Finalists

Consumer Private Packaged Goods — Label More Finalists Finalists A. Lassonde Inc. - Oasis Morning Smoothie

AKSO Marine Biotech Inc. - Nova Sea Atlantic Sea Cucumber Baby Gourmet Foods Inc. - Apple Sweet Potato Multigrain Cereal Beyond Meat - Beyond Burger BIC Inc. - BodyMark by BIC Temporary Tattoo Marker Bridor - Au Pain Doré Multigrain Loaf - Au Pain Doré Rustic Mini Ciabatta Carlton Cards - Papyrus – Happy Happy Day! - Papyrus – Royal Butterfly - Papyrus – Woodcut Thank You Chocolat Lamontagne Inc. - Milk Chocolate Pistachios with Pink Himalayan Salt - Queen T Collection Finica Food Specialties Ltd. - Thea – Bandaged Sheep Cheddar Cheese Fontaine Santé - Dark Chocolate Delight Hummus

Gay Lea Foods CoOperative Limited - Nordica Smooth Blueberry Acai

Goodums Food Inc. - Goodums Bake Mix Green Valley Farms (a division of Burnbrae Farms) - Free Range Solar Power Eggs Hain Celestial Canada - Live Clean Natural Deodorant - Yves Veggie Cuisine Happy Pops - Ice Pops Healthy Crunch - Instant Lattes - SunSeed Butters Hempco Canada Superfoods Inc. - Planet Hemp Superfood Super-Seeds Ice Age Glacial Water Company - Ice Age Glacial Water Keurig Dr Pepper - Keurig K-Duo Single Serve & Carafe Coffee Maker Lagoon Seafood Products - Seasoned Salmon Tartare Manitoba Milling Company - Non-Dairy Smooth- Milled Flax Beverage

Montpak International - Ready to Cook Veal

MorningStar Farms - MorningStar Farms Veggie Burger Nature’s Intent LLC - Dark Chocolate Enrobed Fruit Oggi Foods - Beyond Meat Americana Positec Canada - WORX Power Share Indoor and Outdoor Tools Promise Gluten Free - Promise Gluten Free Brioche Loaf Reynolds Consumer Products - Hefty Ultra Strong Waste Bags Smucker Foods of Canada - Nature’s Recipe Chewy Bites Treats - 1850 Roast Ground Coffee The Minute Maid Company Inc. - Simply Almond Vachon Bakery Inc. - Hostess Choco Cupcake Fun Pack - Hostess Twinkies Fun Pack Viau Food Products - RWA Sandwich Charcuterie

- Personnelle Lip Balm Raspberry - Personnelle Wipes with Saline Solution for Stuffy Noses - Selection Premium Belgian Chocolate Cups

CANADIAN TIRE CORPORATION - Paderno Pre-Seasoned Smooth Release Cast Iron Skillet FEDERATED CO-OPERATIVES LIMITED - Co-op Gold Cookie Cake - Co-op Gold Edible Cookie Dough - Co-op Gold PURE Honey - Co-op Gold PURE Kettle Cooked Potato Chips - Co-op Gold PURE Sauerkraut & Kimchee LONGO’S - Longo’s Gourmet Ginger Buttercream Cookies - Longo’s Ice Cream Stroopwafel Sandwich with Dulce de Leche Filling METRO INC. - ibiZ 2-in-1 Magnetic Wallet Case - Irresistibles Atlantic Salmon Portions - Irresistibles Carbonated Spring Water - Irresistibles Choco Caramel Pecan Cream Pie - Irresistibles Ham & Cheese Puff Pastry - Irresistibles Low-Calorie Frozen Dessert - Irresistibles Naturalia Chips - Irresistibles Naturalia Dressings - Irresistibles Naturalia GlutenFree Pasta - Irresistibles Naturalia Kids Cereal Bars - Irresistibles Organics Frozen Fruit for Smoothie - Irresistibles Premium Mix Popcorn & Nuts - Irresistibles Roti Flat Breads - Irresistibles Tuna Tataki - Irresistibles 2% Strawberry SKYR Yogurt - Irresistibles 2% Vanilla Lactose Free Greek Yogurt - Life Smart Naturalia bbq Chicken

REXALL PHARMACY GROUP - Be Better Age Defying Overnight Mask - Be Better Dark Chocolate Covered Whole Almonds Dusted with Real Raspberries - Be Better Quinoa Strips SAVE-ON-FOODS - Cauliflower Crust Pizza - Western Family Functional Dog Treats - 100% Canadian Angus Square Beef Burgers SOBEYS INC. - Compliments Bacon Maple Wiener with a hint of Maple - Compliments Frozen Dairy Dessert - Compliments Frozen Dairy Dessert Bars - Compliments Mocktail - Compliments Naturally Simple Tortilla Chips - Sensations by Compliments Bites - Sensations by Compliments Cakes - Sensations by Compliments Spirited Mickie BBQ Sauce - Sensations by Compliments Ultimate Dutch Apple Pie - Sensations by Compliments Vietnamese-Style Shrimp Spring Rolls WALMART CANADA - Great Value Hot Sauce - Great Value Mini Bars - Great Value Salt-Free Spice Blend Grinders - Great Value Thin Crust Pizzas - Equate Beauty Charcoal Facial Wipes - Equate Beauty Dry Shampoo - Our Finest Manchego - Our Finest Pulled Pork Tamale Pie - Special Kitty Silica Crystals Unscented Non-Clumping Cat Litter - Your Fresh Market Garlic & Cilantro White Naan

June/July 2020 Canadian Grocer

AISLES

Products, store ops, customers, trends

CENTRE STORE TRENDS

LINDSAY ROSS

The return of centre store With customers eating at home more and shopping less frequently, centre store has made a comeback. Will it last post-pandemic? By Carol Neshevich

efore march 2020, centre store wasn’t a huge focus for McEwan Fine

Foods, a high-end grocery retailer with three stores in Toronto. Customers would regularly pop in to McEwan for its renowned chef-prepared items, ready-made meals, hot counter and salad bar. While they were there, shoppers would often pick up some staples and packaged items from the curated grocery aisles—but that wasn’t, generally, the main draw. Everything changed, however, once covid -19 hit. As people hunkered down in their homes, shopping significantly less frequently (with larger baskets) and cooking at home more often, grocers across the country were overwhelmed with the demand for packaged, shelf-stable goods. “It’s affected us tremendously; we really had to evolve ourselves,” says George Bachoumis, McEwan’s general manager. “Being a specialty store, we’ve only carried a certain variety of products, but we started bringing in June/July 2020 Canadian Grocer

AISLES Green Giant canned beans and corn, various Campbell’s soups—things that customers began looking for that we never really had in our store originally.” McEwan removed many of the chairs and tables in its spacious seating area (not a super useful section, with customers no longer permitted to sit down and eat) and expanded centre store products into that space by adding in pallet displays and the like. “We sort of went back to old school ways, like large towers of cans and paper towels,” says Bachoumis. While the centre store transformation at McEwan may have been more extreme than at many mainstream grocers, every grocer interviewed for this story said the pandemic has had a strong effect on centre store trends. “Pre-covid, centre store was shrinking, both in sales and in size,” says Tim Lalach, category development manager, food department at Federated Co-operatives Limited. “We, at Federated Co-ops, were, and still are, focused on expanding fresh departments as our biggest differentiator in the food portion of our business. Pre-covid, in new and renovated stores, centre store total footage was being reduced to support expanding fresh department halls.” Post- covid , however, the share of total business for “grocery” (dry goods, dairy and frozen) has “skyrocketed,” according to Lalach. Indeed, there’s been a lot of talk among industry experts about the “shrinking of centre store” in favour of fresh market concepts in recent years. And like Federated Co-op, countless grocers

across Canada have been following that model—devoting more space to fresh and prepared foods, and less to packaged, shelf-stable items—when renovating or building new stores. “There’s no debating the recent gains in fresh food, deli and other perimeter hallmarks,” says Carman Allison, vice-president consumer insights for North America at Nielsen. That said, Allison stresses that the rumours of centre store’s demise were greatly exaggerated— even before covid -19 hit. Throughout 2019, for instance, centre store food sales “actually grew in line with the perimeter of the store,” he says. Still, the changing consumer patterns of the pandemic have undeniably given centre store a huge boost, shifting the balance to see centre store growing at a significantly higher rate than the perimeter. “For the 10 weeks ended May 19, centre store food is responsible for 27% growth, versus perimeter at 16%,” says Allison. And among all the current retail growth drivers, overall, he notes, centre store is “contributing to 77% of growth as consumers shift purchase needs to more shelf-stable goods.” WHAT’S ON THE SHOPPING LIST? While the early days of the pandemic saw shoppers frantically stocking up on toilet paper, sanitizers and cleaning supplies, now “shelter-in-place lifestyles have pressured supply chains across other categories, some of which are directly correlated with an increase in in-home cooking and baking,” says Allison. And

Consumers continue to stock their pantries with frozen and shelf-stable produce FRUIT

$ Growth

$ Share

VEGETABLES

+ 18

+ 24

+ 5

+ 31

+ 35

+ 8

FROZEN

CANNED

FRESH

FROZEN

CANNED

FRESH

7.9

2.1

90.1

6.2

4.3

89.5

SOURCE: NIELSEN MARKETTRACK, NATIONAL ALL CHANNELS – YTD: 13 WEEKS ENDING APRIL 4, 2020 – TOTAL TRACKED SALES INCLUDING FRESH RANDOM WEIGHT

June/July 2020 Canadian Grocer

it seems there’s a lot of bread-baking going on; specifically, yeast is now a very hot commodity. “Comparatively, yeast sales were trending downward before the outbreak, posting a decline of 6% for the 52 weeks ended Jan. 4, 2019. With consumers now spending more time in the kitchen, fresh, homemade bread is experiencing a big revival, leading to an unprecedented dollar sales growth of 88% in the category in the 13 weeks ended April 4.” McEwan’s Bachoumis says “pretty much every type of baking supply” has been surging in sales at his stores, along with “oats, various pastas, pasta sauce, rices and various grains.” Justin Schley, vice-president and CFO of B.C.’s Quality Foods, agrees, adding that canned soups have also been selling very well at his stores. Federated Co-op’s Lalach notes (at the end of May) that “the strongest of centre store categories in the latest four weeks were canning supplies, flour and cake mix, baking products, cones/ sundae toppings, and desserts (dry and frozen).” He also suggests we are seeing a shift from “purchasing to save ourselves” to a “start enjoying something” theme, with the increases in pop, chips and indulgent snacks. Interestingly, as far as brands go, it seems there’s been a return to the “old school” big-name CPGs. “In these challenging times, we have certainly seen consumers going back to trusted, reliable brands,” says Fed Arreola, chief category and brand officer, Kraft Heinz Canada. “In particular, we are seeing an even stronger response in the ‘comfort’ food categories or family favourites. For instance, our Heinz Beans have seen an increase of more than 90% in the past 13 weeks. Similarly, some of Canada’s favourites such as KD and Kraft Peanut Butter have seen an increase of more than 50% and 30%, respectively.” Arreola notes that Kraft Heinz is also now seeing an increase in other categories that may not have seen a spike at the beginning of the pandemic, such as cream cheese (+20%) and coffee (+30%). Kellogg is also experiencing a boost: “Today, we’re still seeing many of the categories in which Kellogg’s competes (such as ready-to-eat cereal, salty snacks and frozen waffles) maintaining double-digit growth, as well as higher than pre-covid levels of both sales and at-home consumption,” says Tony Petitti,

AISLES vice-president of sales, Kellogg Canada Inc. “The cracker category, in particular, has seen a significant uptick.” Snacking has been big, as PepsiCo’s vice-president of customer development, Mike Lust, can attest (with regards to the company’s Frito-Lay business). “It’s just been an ongoing increase in the consumption of those things, as people have been at home ... and looking for items that give them comfort during these times of stress,” he says, noting products like Tostitos are also doing double duty as meal occasions, since nachos for dinner has been a popular option among families looking for fun meals to cook at home. PepsiCo’s Quaker brand has also experienced a boost, he adds, thanks to the increase in home baking as well as “an explosion in breakfast being consumed at home.” Aurelio Calabretta, vice-president and general manager of Smucker Foods of Canada, says this breakfast explosion has led to strong growth for the company’s peanut butter and fruit spreads, as well as coffee, “as away-from home coffee consumption has shifted to in-home.” One of the more notable comeback stories among the big CPGs during the first few months of 2020 is that of Campbell’s. The canned soup giant released its quarterly numbers in early June, which showed a 20% increase in net sales of meals and beverages, and a 35% increase in operating profits. “It certainly has been a very good last quarter,” says Trevor Oberlander, vice-president of sales for Campbell Canada. In terms of sales, “soup has certainly been a standout, and then within soup, anything to do with cooking has been fantastic. And what we’re seeing is quick-scratch cooking has increased. It’s been a trend for the last few months that has increased, and we’re certainly capitalizing off that,” he says, referring to the many recipes people are trying that incorporate canned broths and concentrated soups (cream of mushroom soup, for instance, is a common ingredient in many old-school casseroles and stews). MAKING THE MOST OF CENTRE STORE DEMAND What about merchandising in centre store right now? “I think that the whole ‘keep it simple, stupid’ philosophy is actually more important than ever, because right now it’s about those brilliant basics, right?” says PepsiCo’s Lust. “Right now,

Centre of store (cos) is contributing to 77% of growth, led by cos food FISCAL 2019

Perimeter

COS Non Food*

COS Food

10 WKS TO MAY 9/20

C-19 GROWTH CONTRIBUTION

MILLIONS CHANGE

31.2% + 3 29.9% + 16 23.2% 22.1% + 2 21.0% + 16 16.6%

+ $898.5

46.7% + 3 49.2% + 27 60.3%

+ $2,339.1

+ $643.2

SOURCE: NIELSEN MARKETTRACK, NATIONAL ALL CHANNELS – YTD: 10 WEEKS ENDING MAY 9, 2020 – TOTAL TRACKED SALES INCLUDING FRESH RANDOM WEIGHT * LESS GENERAL MERCHANDISE

more than anything, consumers want to know that whether they go to the store or order online, they can get what they need. They know where it’s going to be, and can trust that it’s going to be there.” Kraft Heinz’s Arreola adds grocers might want to consider bringing centre store items into the fresh sections to space shoppers out from the crowded aisles: “For example, placing peanut butter in the bread section.” At Denninger’s, a specialty grocer in Ontario, there’s a big area at the front of the store for seasonal dry goods. “So come Christmas, it’s all Christmas cookies and chocolates, then summer is obviously a barbecue theme, that kind of stuff,” says Patrick Denninger, operations manager. It’s typically specialty items featured here, but when covid-19 hit, Denninger’s decided to assemble a big display of midranged or lower-priced basic “pandemic staples,” all gathered in one place. “We were planning our big Easter promotions and then we said, ‘Well, let’s just throw that out the window and focus instead on canned soup, broths, jarred products, olive oil—just kind of very simple staple items,’” he says. Quality Foods took that concept a step further. After noticing there was “sort of a hit list of breakfast items people would come in for … we took these key breakfast items that were selling in abundance and created it as pre-bundled box, featured in all stores,” says Schley, noting the contents included favourites like granola, coffee, cereals and the like. “You

get to reduce the time spent in the store, and it’s something that they could either order online or pick up quickly in-store.” The breakfast bundles have been such a success that Quality Foods decided to launch a variety of other themed boxes starting in June, including a pizza-making kit, a taco night kit, a barbecue box for Canada Day, a Father’s Day camping box, and a box of “movie night” snacks and supplies. “We’re trying to be mindful of creating fun because it’s not the same experience in the grocery store now,” says Schley. “It’s sort of this somewhat awkward, difficult environment because you don’t want to spend a lot of time in the store. You’re avoiding people. So this is a way to create fun outside of the store, but you kind of still have that store connection.” Offering customers an array creative recipe ideas could be another wise move for grocers. With more Canadians cooking at home, says Nielsen’s Allison, “and 47% looking for new recipes more than before the outbreak, providing consumers with ongoing inspiration to use the items they’ve stocked up on is one way to ease one of the many stressors Canadians have on their plates. Coming up with and sharing creative ways to use food items they’ve stored will be essential to maintaining growth and loyalty, even beyond covid -19 impact.” WILL CENTRE STORE STAY STRONG? Can we expect the trend to last post- pandemic? “None of us know what the June/July 2020 Canadian Grocer

AISLES world will look like. Is it going to go back to what it was? I think the answer would be no,” says PepsiCo’s Lust. “But what that new normal looks like, we don’t know.” Bethany Roberts, a store manager at Colemans in St. John’s, N.L., agrees the answer remains to be seen. “I think the permanence of the shift will depend on how long this pandemic continues—will it go on long enough to change people’s ingrained habits?” At Toronto’s McEwan, Bachoumis says the stores have slowly started re-introducing their more foodservice- oriented features (like breakfast sandwiches and paninis) a bit at a time, but they still plan to keep most of the value-oriented packaged staples they brought in at the beginning of the pandemic, for now. They may start delisting certain SKUs if they see sales of these dropping off, he says, “but at the moment, we’re going to continue to keep a lot of these high-demand products that people are asking for.” In general, grocers would be wise to tweak centre store strategies to reflect consumer behaviour as it evolves. “Retailers will need to adjust their assortment planning and demand forecasts as consumers remain at home,” says Allison. “Understanding each phase of these changing times while the industry pivots in the pandemic will be critical as businesses prioritize how they reinvent themselves to meet the developing market circumstances driven by covid -19.”

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FROM PIZZA TO PRODUCE: THE FROZEN SURGE Like their shelf-stable counterparts, frozen foods have seen a big surge in 2020. According to Federated Co-op’s Tim Lalach, “frozen paced grocery in growth, but what was different was the mix of categories performing.” He says frozen breakfast items (waffles, breakfast entrees, etc.) were huge sellers right out of the gate, followed by frozen veggies, potatoes, breaded fish, frozen beverages, frozen desserts, pizzas and ice cream. “What is interesting in this frozen category list is that covid-19 has resurrected some categories that were on their deathbed,” says Lalach. “Frozen fish and frozen desserts were running negative the first eight weeks of the year, and frozen beverages had modest gains, but all three are pacing grocery growth during the covid weeks.” Colemans’ Bethany Roberts says at her store, frozen has been up 15% to 20% over last year, particularly “frozen entrees, fruit and vegetables.” Similarly, at Denninger’s, Patrick Denninger says frozen fruit really took off. “We’ve sold a lot of that, as well as ice cream,” he says, noting the ice cream boost is likely driven by the desire for comfort food. Across the board, frozen pizzas have been popular. “Frozen pizza was a big category right from the get go, and it still remains that way,” says Quality Foods’ Justin Schley. McEwan’s George Bachoumis adds that it hasn’t just been frozen pizzas, but also frozen pizza dough that is selling strongly at his store. As for fruits and vegetables, Nielsen’s Carman Allison notes that both canned and frozen have seen a boost. “Frozen and canned fruits and vegetables are reaping the benefits of consumers’ preference for shelf-stable products today. While fresh still owns the majority of the dollar share, frozen and canned are contributing more to growth,” he says, as Nielsen data shows 18% growth for frozen fruit and 24% growth for canned fruit (vs. 5% growth for fresh), as well as 31% growth for frozen veggies and 35% for canned veggies (vs. 8% for fresh) in the 13 weeks ending April 4. “Whether or not this remains the same in the future is yet to be seen.”

AISLES

New on shelf

The latest products hitting shelves

1 MADE WITH LOCAL GRANOLA BAR MIX Made With Local, the Nova Scotia-based maker of Real Food Bars, is launching Granola Bar Mix—a vegan, organic, nut-free mix that yields 10 full-sized granola bars in as little as 10 minutes. Consumers simply add half a cup of nut or seed butter, half a cup of sweetener, and bake. Made with ingredients including organic oats, cranberries and hemp hearts, Granola Bar Mix is available in Original Goodness and Cranberry Choco Chunk.

2 GREENHOUSE JUICES–ROSÉ Now shoppers can “rosé all day” without any of the guilt. Greenhouse Juices is releasing its Rosé Cold-Pressed Juice for the summer. Sweet and tangy in taste, the organic juice is made from three ingredients: watermelon, lime and fermented lemongrass, and is sold in 300mL glass bottles. It’s free from additives and preservatives, and is low in sugar.

3 LECLERC’S GO PURE BARS Leclerc’s Go Pure bars are made with an apple and date base, whole oats and real fruit. The snacks are free of trans fat, peanuts and artificial colours and contain eight grams of whole grains per bar. Sold in boxes of five individually-wrapped bars, they are available in six flavours: raspberry, strawberry, coconut and pineapple, banana and strawberry, cherry, and Concord grape. 4 BEYOND MEAT’S BEYOND SAUSAGE Beyond Meat’s first plant-based pork alter native product, Beyond Sausage, has hit store shelves at major grocery retailers across Canada. Beyond Sausage is available in two flavours: Mild Italian and Hot Italian. Peas and rice provide the protein, according to the California-based company, while coconut oil adds the juicy texture, beets provide the meaty colour, and the sausage casing is derived from algae.

5 RISE LOW-SUGAR KOMBUCHA With demand for low-sugar beverages on the rise, RISE Kombucha is introducing four flavours containing only one gram of sugar: Kiwi & Pineapple, Raspberry & Vanilla, Mango & Papaya, and Watermelon & Mint, all sold in 414-mL bottles. By comparison, kombucha in RISE’S “traditional” line contains five to seven grams of sugar per serving. June/July 2020 Canadian Grocer

WHAT’SNEW NEW PRODUCTS IN GROCERY

A Twist on Canada’s #1 Premium Mix Fever-Tree Refreshingly Light Cucumber Tonic Water is a fresh cucumber twist on Canada’s #1 premium mixer brand. It is crafted from the highest quality ingredients like fresh cucumber essence from General Lee Cucumbers and blended with the gentle bitterness of our signature quinine. Cool, crisp and delicate, it is the perfect accompaniment to your consumers’ cocktails with 32% fewer calories than FeverTree Indian Tonic Water. Available to order now through TFB & Associates.

Coffee Club Lavazza Crema e Gusto is a coffee with a distinctive character: the perfect combination of intense aroma and full-bodied taste. It consists of a selection of high quality Brazilian Arabica and African and Indonesian Robusta beans to produce a fragrant flavour and a pleasant chocolatey finish. Crema e Gusto is ideal for Canadians who want to enjoy an intense taste experience any time of the day.

New Protein Snack from Piller’s When bite-sized salami pieces are paired with thoughtfully selected ingredients like nuts, seeds, dark chocolate and dried fruits, the result is a high protein, sweet and salty snack that the whole family will enjoy. Available in three delicious flavours (Original, Spicy Sweet, Tropical) and with peggable packages and display-ready caddies, these grab ‘n go packs are an essential addition to your snack aisle!

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–JUNE/JULY 2020

AISLES

IMMUNE-BOOSTING FOODS

Defence mechanism

Immune-boosting foods get a boost in the wake of covid-19 By Michele Sponagle

GETTY IMAGES/JCHIZHE

as the covid -19 pandemic evolves, con-

sumers are seeking new ways to stay healthy. Products that go beyond basic nutrition by promising something to aid wellness fall under “functional foods”—a red-hot category poised for growth even after the pandemic subsides. The quest for a tip-top immune system is, not surprisingly, a high priority for consumers right now. Over the last decade, sales of immunity supplements have increased; the covid -19 pandemic has merely lit a match under the sector. In its first quarter this year alone, for instance, Jamieson Vitamins saw sales jump 16.5% in Canada, credited, in part, to immunity supplements. In that light, the consumer desire for immunity-boosting packaged foods—beyond fresh produce and supplements—has been a logical evolution. According to the Supplements and Functional Food 2020 report from Bellevue, Wash.-based Hartman Group, 30% of covid-aware consumers say they have a greater need for immunity boosting now. Grocers and food manufacturers are paying close attention. “Companies tend to innovate in places where the money’s going,” says Shelley Balanko, senior vice-president, Hartman Group. “You see some interesting new products focusing on immunity as well as other associated benefits, like reduction of inflammation

and improvement of digestion.” Balanko points to the bone broth craze as an example. Consumers have embraced it in recent years to improve gut health and boost immunity, and are using it not only as an ingredient for cooking, but are drinking it, too. Also doing well among those interested in an immunity boost are fibre-rich foods and foods featuring probiotics. Think fermented items such as yogurt, kefir, kimchi, miso, kombucha and sauerkraut. Up next, mushrooms are up-and- coming functional-food ingredients. “They’ve been popping up all over the place,” notes Balanko. If they’re not already, consumers will soon be familiar with mushrooms with names like lion’s mane and chaga, purported to help with immunity. They’re already being added to coffees, teas, creamers, nutritional drink shots and hot chocolate mixes. Familiar, tried-and-true staples are also reaping the benefits of the immunity-seeking trend through innovation. Drizzle Honey, for example, is creating a buzz around its high-quality, raw Canadian honey. “We have absolutely noticed a spike in sales of Ginger Shine as well as the rest of our Superfood Honey Collection,” says company founder Aja Horsley. Ginger Shine, a special immunity blend, also contains lemon verbena, chamomile and elderflower.

Working with grocers has been key to Drizzle’s success. “We love working with grocers on social media to promote our products, especially now that consumer behaviour is changing so rapidly,” explains Horsley. “It gives us a real opportunity to directly reach our customers through the grocers’ online channels as well as our own. In-store, our brand has a strong shelf presence and really stands out on end-caps. And honey is easy to cross-promote.” Richa Gupta, founder of Turmeric Teas, has also seen a sales uptick during covid -19. “I combined my knowledge of Ayurveda and personal experience with using tea made from the spices in my kitchen to create delicious teas with turmeric that help fight inflammation and boost immunity,” she says. The popularity of her loose-leaf teas inspired the creation of latte blends based on traditional golden milk (haldi doodh), known as an immune booster in Indian culture. Her company has added two SKUs of these turmeric latte powders: Joy (a “vitalizing” blend) and Bliss (an “elevating” blend). To navigate through the sometimes- confusing world of functional foods, consumers often need guidance. “Hiring educated staff is key,” says Jane Greenley, dispensary department purchaser for The Big Carrot Community Market in Toronto. “Our staff are industry professionals and go through regular product knowledge training sessions.” Though the grocer has an educated customer base, Greenley says there has been a surge in new clientele seeking natural ways to support their immune systems. Along with having knowledgeable staff available, grocers can maximize sales of immunity-boosting foods by giving them prominence in the store and not tucking them away. “To put these products off in a corner adjacent to the pharmacy would not be the place that consumers are looking,” Balanko warns. Dana McCauley, food trend tracker and director, New Venture Creation, University of Guelph, says that since shoppers are no longer lingering or browsing in stores, there’s a need to shift to digital promotion to highlight immune boosters. “There’s a real opportunity here to partner with medical professionals and experts to assist consumers. You’d be well served [as grocers] to become a trusted source of information that people actually use.” CG June/July 2020 Canadian Grocer

CHECKING OUT

A messy situation COVID-19 is trashing our daily routines. It’s also, literally, creating more trash DON’T BE FOOLED. Despite a slight relaxation in social distancing orders and retailing restrictions, the covid -19 pandemic is far from over. Even if we see continued reductions in the number of new cases, we will likely not see a return to our pre-pandemic normal lives for at least a year, maybe longer. covid -19 has caused the world to be inexorably changed. This is an insidious virus that still is not fully understood. Its rapid spread around the world caught all healthcare professionals off guard. While it is now known that the virus is spread primarily from person to person directly (primarily through droplets released when someone coughs, sneezes or even talks), it also could potentially spread through touching inanimate objects such as counter surfaces, door handles and so on. That is why grocers, who have heroically continued to serve their customers, diligently spray their checkouts, put Plexiglass between their cashiers and patrons, encourage the wearing of face masks, and enforce physical distancing.

June/July 2020 Canadian Grocer

What we don’t know is what will happen as we relax some of the restrictions by opening non-essential stores, restaurants and even schools. It’s a wait-andsee game that could force reactivating the severe restrictions should there be a sudden uptick in new cases. Living in this covid -19 world for the past several months has already cost world economies billions of dollars, with even more costs to come. Several meat and poultry processors have had to shut down for periods of time while they deal with ill employees. Transportation industries like airlines, buses and trains have been virtually at a standstill. Some airlines and bus companies won’t survive. Nor will countless restaurants and traditional retailers. covid -19 has made a mess of life around the world. One side effect not talked about enough is the impact covid -19 will have on the environment. While there have been numerous reports on the positive effects of fewer cars on the road and planes in the sky when it comes to cutting carbon

emissions, what about all the new trash being generated and going into landfills? A major contributor to the volume of trash is the healthcare industry, which by its very nature can do nothing about the garbage it creates. Face masks, gloves, testing kits, gowns, and so much more are almost always used just once before being discarded. Medical waste is always sterilized, but eventually ends up in landfill. With millions of people sick with covid -19, the amount of garbage generated could become overwhelming. Careless ordinary citizens add to the problem by discarding their masks and gloves wherever they can without thinking. A video shot in Toronto showed dozens of masks and gloves in the gutters of a street near a hospital. Yikes! Then there is the rise in plastic packaging waste related to the pandemic. From all the plastic bottles piling up due to hoarding bottled water and soft drinks, to empty containers from disinfectants and anti-viral sprays and creams, not to mention all those single-use plastic shopping bags that have come back into style now that customers can’t use reusable bags at many grocers—these things all must be disposed of, which means they may eventually end up in landfills or could add to the already existing crisis of plastic in our oceans and waterways. “The increase in single-use plastics will have long-term impacts on the environment,” declares a World Economic Forum report titled Protector or polluter? The impact of covid-19 on the movement to end plastic waste, published in early May. The report notes that “the devastating impact of covid -19 and the extraordinary measures taken around the world have led to some tough questions for those working to combat plastic pollution.” Until there’s a vaccine, covid -19 will rule the world and our trash will keep piling up. Perhaps once this health crisis is behind us, we can start paying attention to the health of our environment. CG

George Condon is Canadian Grocer’s consulting editor. He’s based in Toronto. condug@sympatico.ca

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George Condon

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