Canadian Grocer - August 2018 by ensembleiq

HOW TO BE MORE CYBERSECURE WHAT’S BAKING?

AUGUST 2018

INSIDE

GRAND PRIX WINNERS

ORGANICS ON THE MOVE MEET GOOD FOOD FOR GOOD'S RICHA GUPTA THE FUTURE OF WORK IN GROCERY

INSIDE NATIONS EXPERIENCE

FRANK HO ON THE STORE’S “FOODERTAINMENT” STRATEGY

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CONTENTS August 2018

COVER STORY

Volume 132 Number 5

THAT’S FOODERTAINMENT

Food and fun collide at Toronto’s Nations Experience

OPINIONS

5 Front Desk 18 Shopper Sense 50 Checking Out PEOPLE

6 The Buzz

Comings and goings, store openings, awards, events, etc.

8 Richa Gupta

FEATURES

Meet the founder of sauce company/social enterprise Good Food for Good

THE BEST OF THE BEST

IDEAS

25 Check out this year’s

11 How to best tackle bias

Canadian Grand Prix New Product Award winners

Should grocers provide staff with anti-bias training?

14 Love Food Hate Waste

HOW TO BE MORE CYBERSECURE

A new program to stamp out food waste has debuted in Canada

16 Catching up with Generation Next

28 With retailers now a prime

Where are they now? We check in with past Gen Next winners

target for cyberattacks, grocers need to boost security measures

AISLES

39 Organics on the move

THE FUTURE OF WORK

As the organic market grows, so do the opportunities for grocers to attract new shoppers

34 How will tech impact grocery’s labour force?

8 20

42 Hey, what’s baking?

Innovative baking ingredients are popping up on store shelves

46 Fermented frenzy

Thanks to increasing interest in gut health, fermented foods are booming

49 Pet power

COVER IMAGE: JAIME HOGGE

Nielson data reveals how products for Rover and Fluffy have been performing in Canada

Canadian Grocer Magazine @CanadianGrocerMagazine August 2018 Canadian Grocer

BUY CANADIAN. TASTE THE DIFFERENCE. helloflavour.ca/clubhouse

For 135 years, Club House has delivered incredible flavour to kitchens across Canada, right from our plant in London, ON. From sourcing quality ingredients to creating Canadian jobs, Club House is proud to be a household staple for generations.

*Reg TM/MD McCormick Canada

PRESIDENT, ENSEMBLEIQ-CANADA Jennifer Litterick jlitterick@ensembleiq.com

GROUP BRAND DIRECTOR-RETAIL Kathryn Swan kswan@ensembleiq.com

FRONT DESK

VICE PRESIDENT/GENERAL MANAGER EVENTS Michael Cronin mcronin@ensembleiq.com

EDITOR-IN-CHIEF Shellee Fitzgerald

sfitzgerald@ensembleiq.com

MANAGING EDITOR Carol Neshevich

cneshevich@ensembleiq.com

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 & DESIGN CANADA Derek Estey destey@ensembleiq.com

PRODUCTION MANAGER Michael Kimpton mkimpton@ensembleiq.com

MARKETING DIRECTOR Alexandra Voulu

Grocers must delight shoppers in-store to keep them returning

avoulu@ensembleiq.com

AUDIENCE DEVELOPMENT MANAGER Lina Trunina ltrunina@ensembleiq.com

WEB OPERATIONS MANAGER Valerie White vwhite@ensembleiq.com

SALES ASSOCIATE BRAND DIRECTOR Vanessa Peters vpeters@ensembleiq.com

SR BUSINESS DEVELOPMENT MANAGER Chantal Barlow

THE HEAT IS ON

Now is the time to step up and wow shoppers

cbarlow@ensembleiq.com

EDITORIAL ADVISORY BOARD Tom Barlow, Ross Bletsoe, François Bouchard, André Gagné, Annick Gazaille, Denis Gendron, Lorelle Gilpin, Florent Gravel, Won Suk Ha, Jessica Kim, Les Mann, Ken Schley, Peter Singer, Mondella Stacey, Mike Venton SUBSCRIPTION SERVICES Subscriptions: $85.00 per year, 2 year $136.00, Outside Canada $136.00 per year, Single Copy $12.00, Groups $59.00, Outside Canada Single Copy $16.00. Email: contactus@canadiangrocer.com Phone: 1-844-694-4422 between 9 a.m. to 5 p.m. EST weekdays Fax: 1-844-815-0700 Online: www.canadiangrocer.com/subscription

REPRINTS, PERMISSIONS AND LICENSING Please contact Wright’s Media ensembleiq@wrightsmedia.com 1-877-652-5295

CORPORATE OFFICERS

EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Richard Rivera CHIEF BRAND OFFICER Korry Stagnito PRESIDENT, ENTERPRISE SOLUTIONS Terese Herbig CHIEF DIGITAL OFFICER Joel Hughes CHIEF HUMAN RESOURCES OFFICER Jennifer Turner SENIOR VICE PRESIDENT, INNOVATION Tanner Van Dusen MAIL PREFERENCES: From time to time other organizations may 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 © 2018 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. SHUTTERSTOCK/DEAN DROBOT

Printed in Canada at Transcontinental.

DELIVERED TO MY INBOX recently was an email with the subject line “Canadian Grocers: The Bloodbath Is Here.” It was an eyeopener for a midsummer morning and certainly stood out among the scores of routine industry e-newsletters, article pitches and mundane internal communications. Who was the author of this mail? Sylvain Charlebois, dean of the faculty of management at Dalhousie University. In this communication, Charlebois was raising the alarm to the fact retail sales at Canadian supermarkets dropped 3.1% in May (or $221 million in one month). Worse, StatsCan figures revealed retail food sales have been down in four of the last five months. As we’ve heard repeatedly over the past year or so, consumers are changing fast and have abundant choice when it comes to procuring their food. The fight for their food dollars is in full swing. Charlebois put it plainly: “Canadians are deserting the old model and seeking something new at a much faster rate than expected.” Retailers such as Nations Fresh Foods are keenly aware of this new reality. Its response: to appeal to shoppers with a 155,000-sq.-ft. store that boldly combines

food with entertainment to amp up the in-store experience. As Nations’ Frank Ho tells us (page 20), to survive today, grocers need a strong brick-and-mortar model— something unique to delight shoppers. While on the subject of wooing consumers, in this issue Nielsen’s Carman Allison makes the case for courting LGBTQ+ consumers (page 18). These vibrant communities have deep pockets and to engage them it’s important they are “represented, understood and heard” in your store. One last thing. We’re gearing up to recognize the rising stars in grocery with our seventh annual Generation Next awards. If you know an outstanding individual under age 40 working in the industry, please visit canadiangrocer.com/generation-next to nominate them. And check out page 16, where we catch up with some former winners and see what they’re up to now.

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. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

VISIT CANADIANGROCER.COM TO SUBSCRIBE.

August 2018 Canadian Grocer

THE BUZZ

The latest news in the grocery biz

OPENINGS

Toronto natural food grocer The Big Carrot opened its long-awaited second location in late June in the city’s Beach neighbourhood. Considered a pioneer in natural health, the first Big Carrot opened 35 years ago on Toronto’s Danforth Ave. Although slightly smaller (6,300 sq. ft.), the compact new store features all the same departments and services as the original location. The Big Carrot‘s second location in Toronto’s Beach neighbourhood celebrated its grand opening in late June

Camrose, Alta., is home to a new SAVEON-FOODS . The store, which held its grand opening on June 30, features The Save-On-Foods Kitchen, a chicken wing bar, an extensive bulk foods department, as well as a full pharmacy and a clickand-collect service.

Kathryn Swan

Jennifer Litterick

EnsembleIQ (Canadian Grocer’s parent company) also has some news to share. KATHRYN SWAN has joined the team as group brand director – retail. In her role, Swan will oversee Canadian Grocer, Convenience Store News Canada, Octane, ActualitésDépanneurs and CCentral.ca. Swan is a publishing industry vet, most recently serving as managing director for Newcom Media where she was responsible for three leading B2B brands. JENNIFER LITTERICK has been promoted to the role of president, Canadian division and North American Grocery at EnsembleIQ. In this expanded role, Litterick will continue to lead the company’s Canadian business—its convenience, grocery (including Canadian Grocer) and healthcare brands—as well as U.S. brands Progressive Grocer and Retail Leader.

August 2018 Canadian Grocer

ANNOUNCEMENTS

Sobeys is bringing FreshCo to Winnipeg. The grocer will convert two of its Safeway stores in the city to the discount banner. The stores are expected to close this fall and re-open as FreshCos in the spring.

Toronto has a new COSTCO. In late July, the warehouse club opened a new store at Thorncliffe Park. The location was previously the site of a Coca-Cola bottling plant. A new GIANT TIGER store opened in Anjou, Que. in early July. The Ottawa-based discount chain, which recently started selling fresh foods, has been in expansion mode. There are now more than 240 locations across the country.

GIVING BACK

Food & Consumer Products of Canada and its members came together this summer at the industry association’s 6th Annual Charity Golf Tournament and raised $12,185 for Food Banks Canada. L to R: Michael Graydon, CEO at FCPC; Tiffany Johnston, Erin Filey-Wronecki and Monica Donahue of Food Banks Canada; and Jamie Moody, president at Tree of Life Canada

FCPC

NEWS AT CANADIAN GROCER/ ENSEMBLEIQ

THE BUZZ AWARDS/RECOGNITION

DEALS

Quebec-based OLYMEL is in acquisi tion mode. In recent weeks, the meat company has announced it is buying PINTY’S DELICIOUS FOODS, which markets products in Canada and the United States under the brands Pinty’s Pub & Grill, Pinty’s EatWell, Pinty’s Perfect Portions and Pinty’s Delicious Foods. Olymel is also acquiring the assets of Quebec-based TRIOMPHE FOODS, making it the owner of brands Tour Eiffel, Nostrano and Mother Hen, among others.

EVENTS

Canadian Grocer’s Star Women in Grocery Awards Breakfast takes place on Sept. 25 at The International Centre in Mississauga, Ont. Visit starwomen.ca for details. On Oct. 17 to 18, The Convenience

U CARWACS Show will take place at Calgary’s BMO Centre. Visit convenienceU.ca for more info. The Produce Marketing Association’s Fresh Summit will be held at the Orange County Convention Center in Orlando, Fla., from Oct. 18 to 20. For details, visit pma.com

DCI, COLEMANS, NESTLE WATERS, CLOROX

Food innovation exhibition SIAL Paris will run from Oct. 21 to 25 at Paris Nord Villepinte. For more information visit sialparis.com Grocery Innovations Canada, staged by the Canadian Federation of Independent Grocers, returns to the Toronto Congress Centre Oct. 23 to 24. Visit cfig.ca for info.

MAPLE LEAF FOODS has inked a deal to acquire two poultry plants from CERICOLA FARMS. The plants are located in Drummondville, Que. and Bradford, Ont.

At its annual summit in Toronto, DCI handed out a number of its Star Awards. (L to R): PETER SHIN, Galleria Supermarket (DCI Innovation Award); GIANCARLO TRIMARCHI, Vince’s Market (DCI Leader of the Year Award); DAVE POWELL, Atlantic Grocery Distributors/Powell’s Supermarkets (DCI Lifetime Achievement Award); PIERO CARBONE, Garden Foods (DCI Social Responsibility Award); DAVE COOPER, Farm Boy (DCI Retailer of the Year); MIKE MEDEIROS and GREG MCGRATH, Italpasta (DCI Partner of the Year).

The Food Industry Association of Canada has announced that MARY DALIMONTE, former senior vice-president of merchandising and commercial programs at Sobeys, and TOM GUNTER, former executive vice-president and general manager at Fiera Foods Company, will receive this year’s GOLDEN PENCIL AWARD . The Golden Pencil is the Canadian grocery industry’s highest honour. Dalimonte and Gunter will receive their awards at a ceremony on Nov. 19 in Toronto.

Mary Dalimonte

COLEMANS has purchased family-owned BELBIN’S GROCERY in St. John’s, N.L. Colemans, which operates 12 food centres in Newfoundland and Labrador, says it will retain the Belbin’s name on the storefront at Quidi Vidi Road, as well as the store’s staff.

COMINGS AND GOINGS

Nestlé Waters North America has named ADAM GRAVES president and business executive officer of Nestlé Waters Canada. Graves takes over the role on Aug. 1 from longtime Nestlé exec DEBBIE MOORE, who is retiring. ALI DAVIES has joined the sales leadership team at the Clorox Company of Canada. Davies previously held senior roles at Kraft Heinz Canada, Mars Canada and Solutions 2 Go. GREG GUYATT is now chief financial officer at GreenSpace Brands. Guyatt was previously vicepresident, finance at Sears Canada.

Adam Graves

Ali Davies

Tom Gunter

August 2018 Canadian Grocer

PEOPLE The Facts Who

Richa Gupta Position

President of Good Food for Good What’s New?

Expansion into the U.S. through Thrive Market; plus new barbecue sauces

GOOD FOOD, GOOD BUSINESS Richa Gupta’s recipe for success: combining a passion for social justice with her love of food

By Carol Neshevich Photography by Nikki Ormerod

Who you need to know

PEOPLE

30 SECONDS WITH...

icha Gupta had heard the old career advice “fake it till you make it,” but it never sat well. “I’m not a person who can fake it,” says Gupta, president of Toronto-based sauce company Good Food for Good. Her inability to “fake it”—and irrepressible desire to do work that truly fits with who she is—led Gupta to start Good Food for Good in 2013. Born and raised in India, Gupta had a background in fashion and worked for the Hudson’s Bay Company soon after moving to Canada. Seeking a more meaningful career, Gupta enrolled in the MBA program at York University’s Schulich School of Business, with a plan to join the non-profit world afterwards. But when her MBA opened up a wide range of career options, Gupta says she “got carried away” and decided to give food marketing a go. She landed a marketing job at General Mills, but after a couple of years, “that gnawing feeling kicked in again. I wanted to do something that was more my purpose.” The idea for Good Food for Good was sparked by two things. As a mom, Gupta was looking for healthy sauces to feed her family, but everything she found “was either loaded with preservatives or was made with stuff that I wouldn’t call real food.” She also knew she wanted to do something to make a difference and do her bit to make good food accessible to everyone, including those who can’t afford it. Gupta set about launching a line of cooking sauces—starting with Indian and Mexican sauces—that fulfilled her criteria of clean, “real” food. And, inspired by the “buy one, give one” model of TOMS shoes, Gupta employed a “buy one, feed one” strategy where every purchase of Good Food for Good sauces results in a donation to the Akshaya Patra Foundation, a non-profit that serves midday meals to schoolchildren in India. Gupta has also launched a line of Turmeric Teas and with every consumer purchase of the tea, Gupta’s company makes a donation to Food Banks Canada.

The current lineup of cooking sauces includes three Indian sauces—butter chicken, tikka masala and coconut curry—and two Mexican: an enchilada sauce and a taco sauce. She also launched an organic ketchup sweetened with dates (not sugar) a couple of years ago that has become a runaway hit, particularly with parents concerned about the high sugar content in mainstream ketchup. “People say, ‘Oh wow, this tastes just like ketchup!’ And I say, ‘Yes, that’s why I call it ketchup,’” laughs Gupta. She recently introduced a couple of date-sweetened organic barbecue sauces as well. All products are organic, gluten free, vegan, and contain no added sugar, additives or preservatives. Though she started out selling at farmers’ markets, Gupta’s products are now available in more than 450 retail outlets across the country including Whole Foods Market, Sobeys Ontario, Longo’s, Pusateri’s, and a number of independent stores. But Gupta has even bigger plans for her brands. Currently, she is negotiating a launch in one of the major national grocery chains in Canada, and will be making a move into the United States this summer through online natural food retailer Thrive Market. “It’s the perfect partnership because our consumer is that person who really cares about what they put in their bodies … and Thrive Market really caters to that consumer.” Since achieving organic certification in March 2017 and expanding Good Food for Good’s distribution network, growth has been swift. “We’ve grown by more than 400% and, this year, with the U.S. addition and this national retailer coming on board, the growth will be even bigger,” she says, noting that as the company expands south of the border, she is looking to add some U.S. charities to the “buy one, feed one” mix. To date, Good Food for Good’s donations have fed more than 80,000 people. “We have a goal to feed a million by 2020, so that just inspires me and keeps me going,” says Gupta. “And that’s what makes me happy.” CG

RICHA GUPTA What’s the secret to success?

I think it’s all about perseverance. You need to know where you want to go, and just keep doing what you need to do to get there.

What are your favourite foods?

I love Ethiopian food. It just has so much flavour. And I love Mexican food, that’s the reason why I launched Mexican sauces— after Indian, Mexican is my favourite. There’s so much food that I like. Kimchi has become my latest obsession. And I love cashew cheeses.

What do you like to do when you’re not working?

I like to spend time with my daughter … going to the park, and just spending time together. She’s growing faster than I thought she would! Every day I look at her and think, “How are you nine already? Where did the time go?”

What do you like best about your job?

I like the creativity aspect. I love seeing and talking to people—a lot of the product development and new products that we came up with have come from insights that I gained from people I’ve met. I love finding those nuggets, and then working on them and creating something that will make people happy.

How has your outlook changed since starting this company?

I haven’t had Monday blues in nearly five years. When I’m on vacation I miss being at work, and that had never happened before. When you do what you believe in, your universe falls into place.

August 2018 Canadian Grocer

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IDEAS

Retailers, suppliers, shoppers, insights

Starbucks responded to a negative incident by offering “unconscious bias” training for employees

BIAS IN RETAIL

SHUTTERSTOCK/PIO3

How to best tackle bias Should grocers consider Starbucks’ approach to confronting racial bias? By Chris Powell

tarbucks generated a Venti-sized amount of publicity—both positive and negative—when it shuttered 8,000 U.S. stores for the afternoon on May 29 to conduct what it described as “unconscious bias” training with approximately 175,000 employees. In June, nearly 1,100 Canadian stores were closed for similar training. The move was sparked by an April incident at a Philadelphia Starbucks in which an employee called the police on two black men who were waiting in the store for a business meeting to begin. The resulting furor led to a wave of negative publicity for the coffee chain, including calls for a boycott. The incident also shone a light (again) on the ugly phenomenon known as “shopping while black,” in which visible minorities, particularly black people, are subjected to racial discrimination in retail environments. August 2018 Canadian Grocer

IDEAS The grocery industry is not immune to such charges. In 2016, an African- Canadian woman alleged she was racially profiled at a Sobeys store in Halifax’s Clayton Park area, saying she was followed around the store by a security officer—not a Sobeys employee, but from an outside security company—who, she says, accused her of shoplifting. But the incidents can also cut both ways. In 2017, a female customer was caught on video berating Chinese-speaking employees at Scarborough’s Foody Mart, telling them to “go back to China.” And late last year, a man was caught on video at a Real Canadian Superstore in Calgary unleashing a verbal tirade against a brown-skinned cashier. Yet despite incidents such as this, Canada has an enduring reputation as a beacon for civility and tolerance. It ranked sixth out of 128 countries on the 2017 Social Progress Index for tolerance and inclusion—and second on tolerance for immigrants—even though experts say the statistics hide a discomfiting truth. “Canadians like to believe we’re not racist, and free of such things, but that’s a misnomer,” says Michael Bach, CEO of the Canadian Centre for Diversity and Inclusion in Toronto. “Canadians are subjected to bias and discrimination just like anybody else.” In fact, a 2017 report by the Ontario Human Rights Commission entitled “Under Suspicion” found that visible minorities are frequently subjected to racial profiling in store environments in a variety of ways, from being watched or followed by store clerks to being talked to or asked questions in a “rude, hostile or suspicious way.” Minorities interviewed for the study cited several specific examples of discrimination, including cashiers dropping change into their hand from a height while pressing change directly into the hands of white customers, and being inappropriately questioned about purchases and forced to produce receipts. Bach says that instituting anti-bias training can be helpful for retail businesses, particularly as the makeup of Canadian consumers—especially those who live and shop in urban centres— continues to change. “A lot of organizations have woken up to the fact that their customer looks a lot different than they remember,” says Bach. “If you’re going through your

August 2018 Canadian Grocer

day completely unaware you’ve got a bias against Muslims or Chinese people, you’re not going to know that exists until you start to do some self-examination.” Approximately 7.7 million Canadians belong to a visible minority, according to the 2016 Census, including 1.9 million people of South Asian heritage and 1.6 million people of Chinese heritage. That is going to change further, with Canada set to welcome nearly one million immigrants—largely from countries like India, China and the Philippines— through 2020. Grocers, including Metro and Sobeys, did not respond to interview requests for this article, but Bach singles out companies like Loblaw as being progressive in ensuring the company represents Canada’s multicultural makeup. “They’ve been an organization that really has started to see the change and are responding to it,” he says. Jennifer Lynn, program director of the Broadening Opportunity through Leadership Diversity (BOLD) program at York University’s Schulich Executive Education Centre (SEEC), says diversity is a “business imperative” in the modern workplace. Established in 2013, the BOLD program provides “high-potential” and culturally diverse executives and senior managers with insights, tools and strategies to advance their careers. Lynn says anti-bias programs such as the one introduced by Starbucks cannot simply be a one-off if companies are committed to changing their culture. “It must be integrated into the values, the vision and everything the organization breathes,” she says. SEEC executive director Alan Middleton says the continuing emphasis on diversity goes beyond social justice, right to the bottom line. The idea is backed up by a 2015 McKinsey report, Why Diversity Matters, which looked at 366 public companies across a range of industries in Canada, Latin America, the United Kingdom and the United States. The study found that those companies in the top quartile for racial and ethnic diversity were 35% more likely to have financial returns above their respective national industry medians. “You draw on diversity to challenge out-of-date mindsets in doing business, as well as social issues,” says Middleton. “There is a return for the organization by utilizing this approach.”

POLL RESULTS

THE AMAZON EFFECT JUST OVER A YEAR AGO, Amazon sent tremors through the grocery industry when it announced it was scooping up Whole Foods Market for a cool US$13.7 billion. Analysts predicted the online giant’s push into brick-and-mortar retailing would spell disaster for already struggling traditional grocers. A year later, we wondered: how are you fending off the Amazon threat?

We asked readers on CanadianGrocer.com:

What changes have you made in the past year to counter the threat of Amazon/ Whole Foods?

36%

HAVEN’T MADE ANY CHANGES YET

HAVE STEPPED UP E-COMMERCE EFFORTS

25%

HAVE ELEVATED THE IN-STORE EXPERIENCE

HAVE ADJUSTED PRICING TO COMPETE

Ne Find it next to Philly in the dairy case!

*Visuals subject to change

Cream Cheese Frosting made with

PhiladelPhia Cream Cheese PHILLY GIVES CONSUMERS WHAT THEY WANT! • Cream Cheese is the #1 flavour in shelf stable frosting, but is not made with real cream cheese1 • Responds to consumer need for fresh, homemade and time saving

CONSUMERS LOVE PHILLY! • Brand Equity is 10x stronger than next leading competitor2 • 71% of consumers agree that frosting is a perfect fit for Philly! . 3

2018 sept

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nov

shelf Blades & Coupons sampling tv social/digital

start sHIP: sePtember 10, 2018 Nielsen Strategic Planner, Icing Mixes, L52W $ Vol, period ending July 22, 2017 Cream Cheese BVC Equity, January 2018 3 Philadelphia Brand Stretch Study, August 2017 1

deC

Made with REAL milk and cream

IDEAS

FIGHTING WASTE A new program to stamp out waste has debuted in Canada, with the support of a few big grocers

WALMART CANADA and Sobeys have partnered with local and provincial governments from British Columbia, Vancouver, Toronto and the National Capital Region, as well as non-profits like Recyc-Québec, on a new program to cut food waste. The “Love Food Hate Waste” campaign aims to change consumer behaviour and divert a portion of the approximately 2.2 million tonnes of edible food tossed out by Canadian consumers and businesses each year. Greg Moore, Metro Vancouver board chair and founder of the National

Zero Waste Council, says the program will incorporate several awareness tactics ranging from traditional and social media to in-store demonstrations and education cards. It also has a consumer website with tips designed to help Canadians waste less food. The Canadian campaign is adopted from a U.K. program first introduced by the Waste and Resources Action Programme (WRAP) in 2007. Richard Swannell, director of WRAP Global in England, says there has been a reduction of one

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million tonnes per year in household food waste since the program began, saving Britons the equivalent of $4.6 billion each year. But Swannell describes reducing household food waste as a “complex challenge,” noting it took two to three years before WRAP began detecting measurable change. The Love Food Hate Waste program is also running in Australia, New Zealand, Poland, Hungary, Slovakia and the Czech Republic. Swannell hopes other countries will adopt the program as part of their commitment to the United Nations’ Sustainable Development Goal 12.3, which aims to cut per-capita global food loss and waste by half by 2030. Anika Malik, Walmart Canada’s director of corporate affairs, says the program aligns with the retailer’s goal of zero food waste across its Canadian operations by 2025. “We’re in the business of selling food, not wasting it,” says Malik. Walmart plans to share messaging around food waste with its approximately 85,000 sales associates in Canada as a way to get them to reduce their own—and the company’s—food waste, and is extending the message to customers by sharing food waste reduction tactics via its social media channels. Malik calls food waste a “massive issue” requiring a multi-stakeholder approach. “I don’t think this is any one organization’s battle,” she says. “We welcome as many people at the table as possible to take it on.” Moore says retailers like Sobeys and Walmart can significantly amplify the message. “We in government can do a lot of advertising,” he says, “but if you’re about to make that purchase and there’s advertising at the produce section, it’s a lot more influential than if you read it at the bus stop or see a tweet about it.”

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By Chris Powell

Supporting

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IDEAS

CATCHING UP WITH GENERATION NEXT Since 2011, Canadian Grocer’s Generation Next awards have been celebrating up-and-coming leaders (under 40) who are shaping the future of Canada’s grocery industry. Wondering “where are they now?” we checked in with a few past winners to see how their careers have been shaping up since winning their Gen Next awards. By Carol Neshevich

CHER MEREWEATHER JAMIE GRIFFITHS

GENERATION NEXT 2018

CALL FOR NOMINATIONS

Do you know a rising star in the grocery industry? NOMINATE AT CANADIANGROCER.COM/ GENERATION-NEXT

CORBIN BOURREE

2012 WINNER

2014 WINNER

2015 WINNER

JOB THEN: Managing director of the Alliance of Ontario Food Processors WHY SHE WON: She challenged the food industry to think about both innovation and sustainability, while her nuanced understanding of the industry enabled her to build effective programs. JOB NOW: Executive director of Provision Coalition (a non-profit coalition of 16 food and beverage associations committed to guiding the industry toward sustainability)

JOB THEN: Director of supplier development and merchandise strategy, Walmart Canada WHY HE WON: He introduced new processes and best practices while working at Walmart Canada, including the practice of joint business planning, with a focus on collaboration between suppliers and retailers. JOB NOW: Head of retail sales, North America for Matt & Steve’s (makers of The Extreme Bean)

JOB THEN: Managing director at Sustainable Produce Urban Delivery (SPUD.ca) WHY HE WON: He spearheaded some of SPUD’s biggest initiatives up to that point, including Spud’s office program (delivering healthy snacks to offices), and opening the SPUD Edmonton warehouse distribution centre in 2014. JOB NOW: VP of product strategy and merchandise at SPUD.ca, Blush Lane & Be Fresh

What has been your proudest career accomplishment?

What’s changed in your career since you won the Gen Next award?

There have been a few. First is the launch of Provision Coalition itself. We really were created “by industry for industry.” What we’ve been able to establish to support industry is pretty amazing. Specifically, we’ve established Provision’s online sustainability management system (SMS), and … we’ve been rewarded with partnerships that strengthen our delivery. For example, Provision and Loblaw have partnered to pilot our SMS Onsite Support Program with its control brand vendors.

What’s do you like best about your job?

Watching people’s minds shift to include environment and society in their business decisions, and then seeing their excitement as their profitability grows as a result.

What’s your favourite thing about working in the food industry?

Getting to try all the fabulous food and drink!

August 2018 Canadian Grocer

In 2016, I made the jump to the supplier side after spending just over 10 years on the retailer side. I knew I was up for the challenge and it would provide me with a different perspective of the CPG industry.

What has been your proudest career accomplishment?

I would have to say getting our first U.S. chains to list our product, The Extreme Bean. Many Canadian companies have a difficult time penetrating the U.S. market, but we knew we had a unique product, a fun and exciting brand, and a passion to make it happen.

Are there any tough lessons you’ve learned along the way?

There are going to be people who are your biggest supporters and people who aren’t. It’s solely on you to stay focused and block out the negativity. When you crave the end goal badly enough, all the surrounding noise becomes irrelevant.

How has SPUD grown/evolved since you won the Gen Next Award in 2015?

We partnered with Walmart Canada to complete its home delivery fulfillment out of our Food-X facility, set to open later this summer in Vancouver. And last summer, we acquired Blush Lane Organic Markets in Alberta, bringing on five new retail locations and close to 200 full-time team members. This is on top of continued growth in our online business.

How has your own role changed?

My role has shifted from overseeing our Edmonton operation, to managing SPUD’s online business in Alberta in 2016, to leading the negotiation on the Blush Lane acquisition in 2017. Earlier in 2018, I pivoted from overseeing our Alberta business unit to working with our product and merchandising teams.

What’s the best career advice you’ve ever received?

Be humble and curious. You don’t know what you don’t know, but if you start from that perspective, it’s amazing what you can unlock in terms of new knowledge and ideas. CG

2 GREAT EVENTS!

November 19, 2018 | Fairmont Royal York, Toronto

12:45 â&#x20AC;&#x201C; 4:00 p.m.

Cocktail Reception Sponsors

Donâ&#x20AC;&#x2122;t miss the

Golden Pencil Award Ceremony from 5:00 to 7:00 p.m.

2018 Recipients Mary Dalimonte Former Senior Vice-President of merchandising and commercial programs, Sobeys

Tom Gunter Executive Vice-President & General Manager (retired), Fiera Foods Company and Former President, ConAgra Foods Canada

www.GoldenPencilAwards.com

Industry Partners

SHOPPER SENSE

Carman Allison

COURTING LGBTQ+ CONSUMERS Want to woo these big spenders? Make sure they’re represented in your store CANADA IS HOME to a diverse popula-

tion, including dynamic LGBTQ+ (lesbian, gay, bisexual, transgender, queer/questioning and others) communities across the country. And as a consumer group, Canada’s LGBTQ+ communities have very deep pockets as they are responsible for $3.7 billion in fast-moving consumer goods (FMCG) purchases each year, which represents 4.4% of the country’s total FMCG purchases. While LGBTQ+ consumers spend nearly the same amount on FMCG items

total population. Location plays a key role in consumer purchasing decisions and can define whether or not they have the storage space to stock up. Generally, consumers who live in urban centres are living in smaller spaces (condos and apartments), whereas those in rural areas are more likely to live in houses. Household makeup is another point of differentiation. More than one-third of households in Canada have three or more members; however, less than one-quarter of LGBTQ+ households follow suit. Additionally, there are significantly more one-person LGBTQ+ households (38%) in Canada than the total population (29%). Only 16% of LGBTQ+ households have children, compared with 27% for the total population. As retailers and manufacturers develop their sales and marketing plans, they should be mindful to not over-emphasize products for babies and children.

Retailers and manufacturers should revisit their LGBTQ+ consumer strategies on a regular basis and ensure they are fully represented in annual plans as the total population (just 2% less, on average), manufacturers and retailers need to be aware of how these powerful consumers shop in order to develop effective strategies to reach them. WHERE LGBTQ+ CONSUMERS LIVE One key difference is where LGBTQ+ consumers live. More than 40% of LGBTQ+ consumers live in urban centres, compared with only 27% of the

August 2018 Canadian Grocer

HOW LGBTQ+ CONSUMERS SPEND When LGBTQ+ consumers shop FMCGs, they spend more than half (53%) of their dollars in grocery stores, but that still leaves plenty of money to be spent in other channels. While their spending in traditional FMCG channels mimics that of the average Canadian household, LGBTQ+ consumers spend more than the average at select specialty channels. For example, LGBTQ+ consumers significantly outspend the general population

in beauty stores, spending two times as much as the average Canadian consumer. They also spend 28% more at pet stores and 18% more in drugstores as they round out their purchases. WHAT LGBTQ+ CONSUMERS BUY Since LGBTQ+ consumers shop more in certain specialty FMCG stores than the average consumer, it follows that this leads to increased spending on certain products, including hair and pet care products: 21% and 29% more, respectively. Aside from hair care, LGBTQ+ consumers also spend more on oral hygiene (15%) and shaving products (13%), making personal care a key category to authentically connect with this vital consumer group. While LGBTQ+ consumers spend more in some areas of the store, there are also categories where they spend less. Desserts and baby care lead the way, with LGBTQ+ consumers spending 24% less. However, with the “Gayby Boom” underway and LGBTQ+ families catching up to the total population with small children (7% versus 11% for the total Canadian population), the baby care category may soon fall off this list. As LGBTQ+ consumers are a vibrant part of communities across Canada, it’s important that they are represented, understood and heard in the FMCG shopping experience and not just during Pride Month. Retailers and manufacturers should revisit their LGBTQ+ consumer strategies on a regular basis and ensure they are fully represented in annual plans. However, for an inclusive campaign to have the desired impact, it should be conducted regularly, and a company’s overall branding should completely weave in the LGBTQ+ theme. CG

Carman Allison is vice-president of consumer insights at Nielsen in Toronto. @CarmAllison.

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WHERE FOOD & FUN COLLIDE

August 2018 Canadian Grocer

COVER STORY

By Shellee Fitzgerald Photography by Jaime Hogge

With its fourth store, Nations brings its “foodertainment” concept to life PRESCHOOL-AGED children jump, climb, slide and tumble their way through “Happy Kingdom,” a colourful, 4,000-sq.-ft. spaceship-themed indoor playground, as moms and dads watch from a seated viewing area. To the left, just past the Party Rooms, a spacious eating area is scattered with diners lunching on dim sum, pizza and jerk chicken from the nearby hot kitchens. And to the right, neon lights emanating from the large Games Room, housing about 100 arcade games, beckon tweens along with a few “big” kids. It’s not your typical supermarket scene, but the sprawling 155,000-sq.-ft. Nations Experience is no ordinary supermarket.

As its name suggests, this store, the fourth and by far the largest Nations—the second banner under Oceans Fresh Group— is all about delivering an unparalleled shopping experience. “Foodertainment” is the term Frank Ho, Nations Fresh Foods’ senior vice-president, uses to describe the concept behind the store, located in Toronto’s Stock Yards Village in a space formerly occupied by a Target. Foodertainment is also a big part of Nations’ strategy to attract families. “The key is the family,” says Ho. “They come, they play, they’re exhausted, then they eat.” Ho, who originally hails from Shanghai, says his inspiration August 2018 Canadian Grocer

COVER STORY for Nations Experience comes from living in Las Vegas in the late 1990s, where he was impressed by the integration of food with entertainment at many of the city’s venues. He also sees the integration of food and entertainment as the key to survival for brick-and-mortar grocery stores in the future. “You need to have very strong brick-and-mortar store models—you have to deliver something unique.” Experts agree. Over the past year, a chorus of retail analysts have warned that to combat the threat from Amazon and other encroachers, grocers must amp up the in-store experience to engage shoppers and keep them coming back. At Nations Experience, Ho admits that the team underestimated the appeal of the store’s entertainment area, noting that the five party rooms are fully booked each weekend and lineups for the other entertainment areas can be long during peak periods. “We should have tripled the entertainment space,” he says. “But we were testing things; we weren’t sure how customers would respond.” Since its grand opening last November, customers have, in fact, responded enthusiastically to the entertainment/ restaurant/supermarket hybrid. Ho rapidly lists off customer comments posted on Google reviews, along with the store’s current rating (4.5 stars). A quick look at Google confirms Ho’s account: overwhelmingly, the (500+) reviews are positive with many customers giving a thumbs-up to the store’s unique features, multicultural fare, and its affordability. “Fresh and daily affordable—that’s our secret weapon,” says Ho, as he offers a quick tour of the store’s expansive prepared food area, in the centre of which is a large International Buffet. “We have two pricing levels: premium and value,” he says, explaining that at the value buffet shoppers can load up on things that “fill you up”—potato wedges, mixed vegetables, mac & cheese, etc. for $5.99 per pound—while those opting for the premium buffet pay a bit more, $6.99 per pound, but have more protein options and dishes prepared with more expensive ingredients. This pricing strategy was conceived at Nations’ Jackson Square location in downtown Hamilton, Ont. Before introducing its prepared food offer at the Hamilton store, Ho says invitations for a free lunch were delivered to all offices in the vicinity. “After lunch we asked them, what would you feel comfortable paying?” explains Ho. “We settled on a fair price.” At the new Toronto location as well as the others—in Vaughan, Mississauga and Hamilton—a key theme is “Where East Meets West.” This is evident up front in the prepared food area where the Western Kitchen serves up pizza, burgers, fish and chips, rotisserie chicken (of course) and grab-and-go salads; while nearby another kitchen serves up Asian noodle dishes, dim sum and Chinese barbecue pork. There’s also a sushi and teppanyaki station, and a bubble tea bar sits next to a fresh juice counter. Nations’ East meets West philosophy continues in the grocery aisles. Along with Chinese, Japanese and Korean products, there are sections dedicated to Caribbean, Mexican and Filipino fare as well as Portuguese and Brazilian favourites. “We have a lot of Portuguese and Brazilian staff,” says Ho, noting this reflects the local makeup of the neighbourhood surrounding Stock Yards Village. “We learn a lot from our staff at each store,” says Ho. “They’ll tell us about the food of their culture and we’ll try to incorporate it into the mix.” At the Toronto store, this means introducing a Portuguese chicken

August 2018 Canadian Grocer

“Foodertainment” is the Fernam nihicit res evendeb itiiscipsae nis diam ab iduciet doluptis volore solute vidipsa Busant, omnit pe eaque consed most, odit officit eos ullor

More than just a grocery store, Nations’ new Toronto location features a 4,000-sq.-ft. indoor play ground, party rooms and an arcade

“Where East Meets West” sums up the diverse food selection at Nations, from pizza and rotisserie chicken to dim sum and sushi

term Frank Ho uses to describe the store’s concept dish to the menu, while the Mississauga store has an extensive halal offering to cater to the area’s sizable Muslim community. Among the other notable features at Nations Experience is a semi-enclosed seafood department. It’s an intentional departure from Asian grocers where open seafood counters are the norm. “The smell of fish can be off-putting to some customers,” says Ho, adding that on the other hand, some customers don’t think fish is fresh unless they can smell it. “Our solution is to have a semi-enclosed fish area so for people who like the smell, you can go in this area and get it.” As impressive as Nations Experience is, Ho says the current iteration is just “phase one.” When asked about the future of the store, Ho, who appears to have boundless energy, quickly rhymes off a list of plans. In phase two, Ho envisions that the presently unoccupied commercial space near Nations’ entrance will include restaurants, a high-end wine bar, retail kiosks and small themed, temporary pop-up shops. Further down the line he has a vision for satellite stores that offer a taste of Nations Experience, which could be called “Nations Express.” As we wrap up our photoshoot with Ho at the store’s exit, a mom walks by with an inconsolable toddler in tow. Not wanting to quit the play area, the child is refusing to put on her shoes. “She could be a poster child for Nations,” jokes the mom. “She doesn’t want to leave.” Ho gives the mom a wide smile. As she passes he says, “Yes, that happens a lot.” CG August 2018 Canadian Grocer

Innovations that delight your shoppers!

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For 10 years, Carlton Cards has been leading the way with new-to-the-world cards that sing, dance, light-up, pop-out and more! Each year, new performers like these build retail excitement with surprise and delight for consumers. Itâ&#x20AC;&#x2122;s one more way Carlton Cards helps consumers create meaningful connections while driving your sales. For an up close view, contact Carlton Cards at 1-800-663-CARD

GRAND PRIX WINNERS

From pre-cut seafood cubes for sushi tartar to grain-free granola, the winners of the 25th anniversary Canadian Grand Prix New Product Awards, presented by the Retail Council of Canada, are the best of the best

groceries GREAT

Food Au Pain Doré Origine Danish BRIDOR WINNER: Bakery Fresh (Par-baked) Splenda Stevia No Calorie Sweetener HEARTLAND FOOD PRODUCTS GROUP WINNER: Baking Needs & Dried Bakery Twinings Exotic Mango and Ginger Green Tea TWININGS OF LONDON WINNER: Beverages Blue Dragon 3 Step AB WORLD FOODS WINNER: Condiments & Sauces Lamontagne Collection LAMONTAGNE CHOCOLATE WINNER: Confectionery & Shelf Stable Desserts Nordica Smooth Cottage Cheese GAY LEA FOODS CO-OPERATIVE WINNER: Dairy (Milk, Yogurt, Cheese & Spreadables)

Lenberg Farms FINICA FOOD SPECIALTIES WINNER: Deli Meats & Cheeses Spinach Dip, Artichoke and Seasoning BONDUELLE WINNER: Frozen or Refrigerated Prepared Foods & Entrees 40% Less Sugar Whole Dried Cranberries TERRA BEATA FARMS WINNER: Fruits, Vegetables & Produce (Refrigerated or Frozen) Cubes for tartar Sushi à la maison BLEUMER WINNER: Meat, Egg and Seafood Fresh Nutbrown Grain Free FOURMI BIONIQUE WINNER: Shelf Stable Prepared Foods & Entrees Spokes Puffed Potato Snacks LEFT FIELD FOODS WINNER: Snack (Savoury) Chocolate Bark PRANA WINNER: Snack (Sweet)

August 2018 Canadian Grocer

GRAND PRIX WINNERS

Non-Food Baby Gourmet - Shakers Nutritional Beverage BABY GOURMET FOODS WINNER: Baby Care Sweet Eats CARLTON CARDS WINNER: General Merchandise GUM Flossers SUNSTAR AMERICAS (CANADA) Winner: Health Care—Oral Hygiene IGNITE-SX NAMËNA BIOSCIENCES WINNER: Health Care—OTC (Over-the-Counter) Cascades Fluff CASCADES TISSUE GROUP WINNER: Paper, Plastic & Foil Jason Dry Spray Deodorant HAIN-CELESTIAL CANADA WINNER: Personal Care

Private Label— Food Irresistibles Apple, Maple and Cranberry Pie METRO BRANDS, G.P. WINNER: Bakery Fresh (Par-baked) Compliments Naturally Simple Seed and Ancient Grain Blend SOBEYS WINNER: Baking Needs & Dried Bakery Sensations by Compliments Cold Brew Coffee SOBEYS WINNER: Beverages Longo’s Signature Muffuletta LONGO’S WINNER: Condiments & Sauces Sensations by Compliments Milk & Dark Chocolate Almond Dates

August 2018 Canadian Grocer

SOBEYS WINNER: Confectionery & Shelf

Stable Desserts Irresistibles Organics LactoseFree Cheese METRO BRANDS, G.P. WINNER: Dairy (Milk, Yogurt, Cheese & Spreadables) Compliments Gluten Free Cookie Dough SOBEYS WINNER: Desserts (Fresh, Refrigerated or Frozen) Co-op Gold Perogies FEDERATED CO-OPERATIVES LIMITED WINNER: Frozen or Refrigerated Prepared Foods & Entrees Western Family Salad Kits SAVE-ON-FOODS WINNER: Fruit, Vegetable & Produce (Fresh, Refrigerated or Frozen) Irresistibles Organics Grain Fed Chicken METRO BRANDS, G.P. WINNER: Meat, Egg & Seafood (Fresh, Refrigerated or Frozen) Irresistibles Old-Fashioned Potato Chips METRO BRANDS, G.P. WINNER: Snack (Savoury) Nosh & Co. Premium Artisanal Shortbread Cookies REXALL PHARMACY GROUP WINNER: Snack (Sweet)

Private Label— Non-Food Parent’s Choice Diaper Pail Refills WALMART CANADA WINNER: Baby Care NOMA Advanced Constant-Lit C6 LED Christmas String Lights CANADIAN TIRE CORPORATION WINNER: General Merchandise

GRAND PRIX WINNERS Equate Whey Protein Powder WALMART CANADA WINNER: Health Care—OTC (Over-the-Counter)

METRO WINS BIG Among this year’s winners, Metro was the most-awarded company, nabbing five Grand Prix awards for products from its Irresistibles private-label line: Irresistibles Apple, Maple and Cranberry Pie, Irresistibles Organics Lactose Free Cheese, Irresistibles Organics Chicken, Irresistibles Old-Fashioned Potato Chips and Irresistibles Dog Treats.

Kit 3-in-1 Sponge REXALL PHARMACY GROUP WINNER: Personal Care Irresistibles Apple & Chicken Dog Treats METRO BRANDS, G.P. WINNER: Pet Needs

METRO GROUP: RETAIL COUNCIL OF CANADA

Special Awards Nutbrown Grain Free Granola FOURMI BIONIQUE WINNER: All Canadian Spinach Dip, Artichoke and Seasoning BONDUELLE WINNER: Overall Consumer Value

Can’t Mess It Up! Wild Pink Salmon HIGH LINER FOODS WINNER: Innovation And Originality Lenberg Farms FINICA FOOD SPECIALTIES WINNER: Innovative Packaging

The Big Cheese Winner of 2 Canadian Grand Prix Awards for: Best New Product in Deli Meats & Cheeses and Innovative Packaging Contact your Finica Food Specialties representative to get Lenberg Farms cheeses in your dairy case today!

ZZZ ȴQLFD FRP

Finica Food Specialties Limited 65 Superior Blvd #1, Mississauga, ON August 2018 Canadian Grocer 27 L5T2X9 Canada (905) 696-2770

CYBERSECURITY

With cybercrime on the rise and retailers now the prime target, grocers need to step up their security measures

NCE IN THE REALM OF HACKER MOVIES, OR ONLY

a theoretical possibility for businesses, cyberattacks are now a growing, real-world threat. Globally, businesses suffered an average of 130 security breaches in 2017, a 27% increase over 2016 and almost double the number from five years ago, according to the 2017 “Cost of Cyber Crime” study by Accenture and Ponemon Institute. “This is not out of a movie. This is real,” says Daniel Tobok, CEO of Cytelligence Inc., a cybersecurity firm based in Toronto. “And it’s important to keep in mind that these are no longer a bunch of pimple-faced teenagers sitting in mommy and daddy’s basement, eating Cheetos and drinking Coke and doing this for fun.”

By Rebecca Harris Illustration by Sébastien Thibault August 2018 Canadian Grocer

CYBERSECURITY In fact, professional organized crime rings are behind most cyberattacks today, says Tobok. “That’s what makes it so dangerous because they are so well prepared, funded and controlled. And a lot of organizations don’t understand what they’re dealing with.” Retailers, in particular, need to be cautious: the retail industry is now the top target for cyber criminals. According to the “2018 Trustwave Global Security Report,” the North American retail sector suffered the most breach incidences of any industry in 2017 (16.7%), followed by the finance and insurance industry (13.1%) and hospitality (11.9%). From an attacker’s point of view, retailers are enticing because they hold vast amounts of valuable customer data—be it credit card information, loyalty program data or personal information. “This

Common cyber threats

David Greenham, senior manager, risk, performance and technology advisory services at Montreal-based Richter Advisory Group, outlines three common cyber threats: Hacking of servers to break into a network The hacker scans the victim’s Internet-facing servers looking for ones that don’t have the latest security patches. Once they find a vulnerable server, they’ll exploit the vulnerability to gain control of the server. From there, they see what other systems they can connect to and possibly gain control over, until they get to the “crown jewels,” such as databases with credit card information, human resources records, passwords, or anything else they can monetize. Ransomware An attacker will send an email containing ransomware. If the recipient clicks on the attachment, the malware encrypts files on their computer

August 2018 Canadian Grocer

and on network shares they have access to. This renders the data unreadable by anyone (except the attacker). The attacker then demands payment (bitcoin or other cryptocurrency) for the decryption key. “Whether or not they actually do send a key once the ransom is paid is another story,” says Greenham. The CEO scam An attacker either hijacks the email account of a high-level executive or sets up an email account that closely resembles the executive’s account. Posing as the executive, they then send an email to someone in finance who has the ability to release funds, expressing urgency to pay a vendor or other entity via some form of electronic funds transfer.

is very juicy for the threat actors because they can leverage this information to either attack those particular people or sell that information on the dark web for profit,” says Tobok. “So they’re able to monetize it fairly quickly.” For businesses, the ramifications of a sophisticated attack can be far-reaching. First, there’s the financial cost. Cybersecurity Ventures predicts that globally, ransomware damages will cost businesses US$11.5 billion in 2019, up from US$325 million in 2015. The costs include not just the ransom amount, but damage or loss of data, downtime, lost productivity and employee training. The cost of data breaches is also climbing. The “2018 Cost of A Data Breach” report by IBM and Ponemon Institute says the global average cost of a data breach hit US$3.86 million in 2017, a 6.4% increase versus the previous year. Then, there’s the risk of reputational damage and loss of consumer trust, which also comes at a cost. “If a consumer was to steer away from that particular retailer for a period of time, there is an acquisition cost that would be required to get that consumer back,” says Marc MacKinnon, leader of Deloitte Canada’s cyber strategy practice and partner in the firm’s risk advisory practice. Richard Levick, chairman and CEO of Washington-based PR firm Levick, sees an even greater risk emerging for grocery retailers: the health and safety of consumers. For example, as more companies are implementing “smart” devices, a ransomware attack could disturb a grocer’s refrigeration or inventory system. “If you lose control of inventory, or don’t know what the real temperature is of dairy products or other fragile goods, suddenly it becomes a health and safety issue,” says Levick. Experts agree it’s not a matter of if a cyberattack will happen, but when. “It’s definitely going to happen to you,” Levick cautions grocery retailers. “In fact, 100% of people who run companies can expect to be breached … The criminals are always ahead of the good guys. And no one is fully prepared.” While it’s impossible to be 100% secure, there are steps grocery retailers can take to mitigate risk and reduce the impact of a cyberattack. DEVOTE MORE RESOURCES TO CYBERSECURITY “Retailers are often forced to do more with less, and security or IT teams may not be given enough budget to deal with cyber threats,” says David Greenham, senior manager, risk, performance and technology advisory services at Montreal-based Richter Advisory Group. “As a result, their teams may be more reactive than proactive.” By dedicating more resources to cybersecurity, not only can retailers potentially fend off attacks, they can drive business results. In a recent global survey by Capgemini, 77% of respondents ranked cybersecurity as the third-most important factor when selecting a primary retailer. The report suggests

CYBERSECURITY

“100% OF PEOPLE WHO RUN COMPANIES CAN EXPECT TO BE BREACHED … THE CRIMINALS ARE ALWAYS AHEAD OF THE GOOD GUYS. AND NO ONE IS FULLY PREPARED ” retailers that adopt advanced cybersecurity measures could drive a 5.4% uplift in annual revenue. “The traditional perspective that cybersecurity and data protection is an overhead cost needs to change,” the Capgemini report states. On the contrary, “it is an effective means to gain competitive advantage for retailers since it plays an important role in consumers’ minds when they choose their retailers. Cybersecurity and data protection also drives satisfaction and wins consumers’ trust. As a result, it can make a positive impact on top-line revenue for retailers.” BUILD BASIC SECURITY HYGIENE

From an IT perspective, companies should start by building basic security hygiene, which involves knowing what your critical assets are and where they are, says Richter’s Greenham. Then, organizations need to understand what the biggest threats and risks are to those assets, and put in security controls to mitigate those risks. To help thwart ransomware attacks, for example, Greenham says organizations need to update their systems with the latest security patches and frequently back up their data, so that if their data is held ransom, they can restore from backup. Since grocery retailers have limited budgets, Deloitte’s MacKinnon says they need to make the best use of their resources by developing risk-prioritized controls. “The way you do that is look at your ‘crown jewels.’ What is the most sensitive data to the organization that requires protection? And how do we make sure we have the layered controls around that, so if there was an incident, it’s not going to be against the crown jewels?” Organizations also need to be cyber vigilant, which means having early warning systems and good monitoring mechanisms in place so they can detect threats, adds MacKinnon. “It’s about making sure you have situational awareness and [are] using intelligence wisely to be able to predict attacks.” Tobok’s advice is “encrypt, encrypt, encrypt,” as he believes another reason the retail industry

August 2018 Canadian Grocer

is under attack is that most retailers don’t encrypt their data. “For the bad guys, this is like shooting fish in a barrel,” he says. “You’ve got to start moving to a network of encrypted data because then it’s useless for [cyber criminals.] It’s a true deterrent.” EDUCATE EMPLOYEES The human factor is paramount to cybersecurity, as employees often get tricked into clicking on malicious files, or have weak passwords that open the door for attacks. “People are the weakest link in the security chain,” says Greenham. “A lack of security awareness in employees can have a huge impact; for example, in the case of phishing or ransomware.” Security awareness training for employees is a must, and should cover how to identify suspicious emails and who to notify if they suspect a security incident has occurred. In addition, says Greenham, “educate employees on good password practices, like creating strong passwords, not reusing their passwords across multiple online services, and especially don’t use their corporate password on those services.” Tobok adds that employees don’t have to become military-grade IT gurus when it comes to security awareness training. “They just need to understand that this can happen and how, and how to report it when they have a problem,” he says. “That will alleviate a lot of problems.” DEVELOP AN INCIDENCE RESPONSE PLAN In the event a cyberattack does occur, it’s important to have a well-documented and tested incidence response plan so employees know what to do. “That way, people aren’t scrambling when it comes time to respond to a potential breach,” says Greenham. “They’re on top of what needs to be done. The quicker an event can be responded to, the less impact that event can have.” From a communications standpoint, PR expert Levick says it’s what companies do before a crisis that matters most. “Specifically for grocers, you have to have an incidence response plan that you communicate with your employees, and that covers the concerns of your customers in the event of a cyberattack,” he says. When developing a plan, Levick suggests having things like signs printed up, in advance, for the store’s doors alerting shoppers should a cyberattack prevent the cash registers from working. In addition, consider having staff members who can greet customers as they enter the store and communicate what’s happened. “It could be ‘sorry, we’re the victim of a cyberattack. Everything is normal except you have to pay with cash.’ Or ‘since we can no longer be certain of the integrity of our dairy products, we removed them from the shelves,’” says Levick. “Whatever the issue is, you have to have planned that in advance … People will judge you by how well you recover and the only way to recover well is to prepare.” CG

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LABOUR & TECHNOLOGY

THE FUTURE OF WORK By David Brown

IKE MANY GROCERY retailers these days, the Longo’s leadership team is thinking a lot about technology and how it will affect their workforce. There’s not a lot of technology in stores yet, but they’re starting to test and explore the possibilities. Self checkout was previously deemed a poor fit for Longo’s, but they are reconsidering it as systems improve. They’ve partnered with the University of Guelph on a retail innovation lab and they’re in the midst of implementing a new enterprise resource planning system, which will serve as the digital foundation of additional enhancements. “We are going to be introducing more and more technology,” says Liz Volk, vice-president of human resources at the chain that has more than 30 stores around Ontario’s Golden Horseshoe. “We do a little bit of testing and learning, trying to look at what are some of the technologies for the future, and what it could mean for our workforce,” she says. Technology will infuse all corners of the business, but rather than chase every new

August 2018 Canadian Grocer

innovation that comes along, Longo’s is focusing first on the larger strategy—what the brand can become in an industry totally transformed by technology, and what that could mean to its workers. “We are having conversations about what impact it will have in the future,” she says. “And it will have. For sure.” By now most people working in food and grocery will know some version of the, well, grim labour market forecast for the industry. Thanks to smarter and smarter artificial intelligence systems, software and platforms, along with ever more capable robots, a wave of automation is expected to wash over the retail labour workforce, eliminating millions of jobs around the world. Intuitively, this makes sense. We’ve already got self checkouts, and the trend line seems clear. Amazon is already opening cashier-free stores and we’ve all seen those creepy robots that open doors, pick up items and deliver packages. But this might be an over-simplified vision of what lies ahead for retail labour. Indeed, the impact of automation is a matter of debate among economists and

many simply don’t accept that bleak view of the future where human labour is replaced by robots. “I don’t buy it,” says Joe Atikian, a Toronto-based economics writer and author of Industrial Shift: The Structure of the New World Economy. To be sure, new technology almost always leads to job losses. “But, generally, what happens is that there are unexpected consequences and usually on the positive side,” he says. “Automation makes things more efficient, and more efficient economies tend to hire more people.” The financial sector is sometimes used as an analogy for this argument: one of the reasons bank teller employment didn’t plummet after ATMs became ubiquitous was that the more efficient delivery of basic services allowed banks to open more branches, even if each branch had fewer tellers. In other words, the net effect of technology will largely depend on the answers to fundamental—even philosophical— decisions about what a grocery business wants to become through the application of new technology, and how they get

GETTY IMAGES/FATIDO

How will tech impact grocery’s labour force?

and use that technology to move there. Some experts see a new spectrum for the industry emerging. At one end, we’ll have businesses that use technology to sell food and consumer packaged goods as efficiently and cheaply as possible. This is grocery shopping as pure transaction: maximum automation and minimal human interaction. The challenge in that space will be coming up with a unique value proposition. Globally, the two e-commerce overlords, Amazon and Alibaba, have benefits of scale and technology that provide an enormous advantage against most other players. Last year, Walmart partnered with Google to offer thousands of items for sale through its voice platform, Google Assistant. That was a response to Amazon’s growing power, says Canadian retail expert and author Doug Stephens. “Amazon is a technology, data, innovation and logistics platform,” he explains. And in this age of online shopping and constant connectivity, those are the attributes of a dominant retail force. “If, indeed, Walmart is going into this gun battle with

Amazon, then they better have a partner that is a data and technology company,” he says. (The headline on Wired.com was “Google and Walmart’s big bet against Amazon might just pay off” when the deal was announced.) At the far edge of this retail divide, these purely technology-driven grocery businesses won’t need many employees that understand the basics of customer service, or really anything about food. “People in this retail environment will really just be there to keep the technology working,” says Stephens. “The humans we have in-store will be more like technicians to make sure everything is working as it should.” Most conventional Canadian grocery retailers will find it difficult to make the shift to cutting-edge technology company. (Loblaw, Sobeys, Metro and Walmart all declined to share any details about their plans for this article.) “If it is possible— and I’m not suggesting it is not—it would be an extremely long-term transition,” says Stephens. “And you may never actualize that vision because it really has to be something that is in your DNA.”

At the other end of the spectrum, grocery retailers will still use technology to reduce and eliminate repetitive, monotonous labour. But rather than simply cut head count, they could use staff— equipped with the latest information technology—to provide different and better services to consumers. “They could hire a sommelier who can help customers pair up wines with their foods. They could potentially hire chefs in the store [to] help customers understand how to cook the things they are buying, or [have] nutritionists helping people match up the right diet for any medical condition,” says Stephens. Thanks to cloud computing and software-as-a-service (SaaS) vendors, almost any grocery retailer has access to platforms and technology that were only available to major multinational firms not long ago, says Michael LeBlanc, founder of retail consultants M.E. LeBlanc & Company and a senior advisor with the Retail Council of Canada. “These big SaaS-type platforms allow you to rent the technology and that is a real benefit to the smaller retailer in the grocery sector August 2018 Canadian Grocer

LABOUR & TECHNOLOGY because they can focus on the best, most knowledgeable customer experiences.” But even with the option of thirdparty tech providers and system developers, grocers will still need to find people to manage the software and integrate various retail systems—from e-commerce to inventory management to loyalty to point of sale—to deliver the best possible experiences for customers. “Having all of those systems talk to each other, that takes a lot of horsepower,” says LeBlanc, “some of which you can rent and some of which you are going to need to have your own in-house.” Already, finding and holding onto those talents is tough when so many other sectors are competing for essentially the same expertise. The challenges are particularly acute for smaller retailers. “You have to keep them engaged with interesting projects,” says LeBlanc. “When you are a larger retailer there are all kinds of projects to work on in all kinds of divisions.” Recruiting highly skilled digital talent has been a challenge at Longo’s,

especially for its e-commerce business, says Volk. The technologies are always evolving and changing so there is constant pressure to ensure the company has employees who are proficient in the newest and best—people who are in demand across most of the economy. That competition for talent is pushing Longo’s to change how it finds and vets those in-demand candidates. “We are having to get faster with our recruiting process,” says Volk. “For top talent, we need to conduct a full-cycle recruitment within two to three weeks or risk the candidate being offered another position.” Earlier this year, when the company was looking for a senior Java developer, it went from sourcing a candidate on LinkedIn to hiring in one week, says Volk. “It is extremely competitive.” But beyond those very specific, highly technical skill sets, Longo’s has adjusted its staffing practices across the company for the new, more tech-driven retail age. Now, the hiring emphasis is on people who will be able to quickly adapt to

whatever new technology comes along, says Volk. “Someone who is interested in continuously learning new things,” she explains. “Individuals who are curious, who are interested in innovation and asking what is possible.” Norman Shaw, professor of retail management at Ryerson University, has a similar perspective on how the workforce—outside of the dedicated technology experts and developers—will have to change. When tools and technology become ubiquitous, infusing all aspects of all businesses, he says, the quality of the employees will be what allows businesses to succeed. “I think it is more about creativity,” says Shaw. “New ideas and the whole business of design.” When one store comes up with a new idea to impress customers, for instance, how well and how quickly can another business respond with its own new idea? “I think if we can educate people to be more flexible and creative,” he says, “that would be very good.” CG

Breaking Through: How Metro 360 Helps Brands Succeed at Retail W

inning in the big leagues of grocery retail is a tough prospect for many CPG brands. Today, they’re faced with significant slotting fees just to get a product listed, as well as increased demands from retailers on the sales and marketing front. “Retailers want to know how you are going to market the brand and drive consumers into the stores to find it,” says Daniel Shapiro, CEO of Metro 360, a national distributor and demand activation company. “Even if you can get over those hurdles, the product still has to sell. It’s one thing to get the listing, but it’s another thing to get consumers to buy the product. So, it’s not for the faint of heart.” That’s where Metro 360 comes in. The 100-year-old company (formerly Metro News) is redefining how brands break into and succeed at Canadian retail. “We’re truly a full-service provider that brings high-quality products to market, grows sales and builds brands, and no other distribution company is doing that in Canada,” says Shapiro.

As a company that “does it all,” Metro 360 provides end-tosolutions through its main business pillars, including: • Wholesale Distribution: Metro 360 is a national DSD (direct store delivery) and DC (distribution centre) distributor that makes over 12,000 deliveries a week from coast to coast, and is Canada’s largest wholesale distributor of magazines and books. • CPG Investment: Metro 360 owns or has invested in a growing portfolio of on-trend food brands. It also represents a host of best-in-class brands at retail. • Demand Activation: Beyond sales and distribution, Metro 360 creates marketing and PR plans to help brands grow sales. Its services include advertising, product development and cross-brand promotions. Across the country, a 500-person field force provides merchandising, retail intelligence and in-store support. • Third-Party Financial Services: Metro 360 owns and operates a propriety cloud-based billing system that manages all aspects of pay-from-scan (consignment) programs, such as newspaper billing. Another key differentiator is that while other distributors typically have thousands of products in their portfolios, Metro 360 is highly selective. “It’s important for us to focus on best-in-class brands—brands that we love and are proud to sell and market,” says Shapiro. To find out how Metro 360 can help your brand break through and succeed at retail, contact Monique Fung, brand manager, at mfung@metro360.ca and visit www. metro360.ca.

Special promotional feature in Canadian GroCer–SeptemBer 2018

AISLES

Products, store ops, customers, trends

ORGANIC REPORT

SHUTTERSTOCK/SERGEY RYZHOV

Organics on the move As the organic market keeps growing, so do the opportunities for grocers to attract new shoppers By Rosalind Stefanac

or all those who never believed organic goods would be significant contenders across grocery categories, it’s time to re-evaluate. Not only have organics made their way into the aisles of mainstream retailers, but more and more manufacturers are investing in developing organic products to meet consumer demand. As a $5.4-billion market in Canada—which has been steadily growing over the last five years—the Canada Organic Trade Association (COTA) reports that two-thirds of shoppers are now choosing to buy organic products on a weekly basis. “Fifty per cent of all organic consumption globally is happening in North America and 80% of organic shoppers are buying from mainstream channels instead of natural or local markets,” says Tia Loftsgard, COTA’s executive director. “That’s a really good sign for all grocers.” According to the Association’s 2017 report The Canadian Organic Market, Trends and Opportunities, people across the country, regardless of income levels, are August 2018 Canadian Grocer

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“Consumers are starting to become aware of why organics cost more and are willing to make that investment in the health of their families” buying organic, dispelling the common perception that this market is inaccessible to those with lower incomes. In fact, 39% of shoppers are now buying organics at mass retailers such as Walmart and Costco—and it is families who are most often gravitating to these large-format, low-price venues. Further pushing the accessibility factor are grocers like Organic Garage, which has created its business model around providing organic and natural products at lower prices. “In the last eight years, I’ve seen a real shift in knowledge base: instead of people asking what quinoa tastes like, they want to know about particular brands and price point,” says Matt Lurie, president of Organic Garage, which will start construction on its fifth store in Toronto later this year. “Now, even the value-minded consumer is starting to transition to this market.” That said, the perception of elevated cost for organics is still an issue, says Joel Gregoire, associate director, Food & Drink at Mintel. Mintel research reveals that 52% of Canadians identify organic foods or beverages as being pricey and 69% of those who purchase organic/natural foods and beverages say they would buy more if they were less expensive. “Given that most people agree that organics are safer for you, but price is a challenge, it’s about really conveying the value of these products and the benefits to consumers, especially parents,” explains Gregoire. WHO’S BUYING ORGANICS? Suzanne Gagnon, national director of offer evolution at Sobeys, agrees that grocery customers see organic foods as a safer option—especially when they start having

August 2018 Canadian Grocer

children. “The minute we see children come into a family, that’s where we’re seeing a real shift to organics,” she says, adding that locally produced food is also gaining favour, even when it’s not organic. Toronto-based Love Child Organics, makers of 100% organic baby cereals, purées, snacks and drinks, is tapping into this growing market share of sustainably minded, health-conscious parents. (The company is launching six new products this fall.) “I really believe there is a mind shift when you become pregnant, even if you’ve only dabbled in organics previously,” says senior brand manager Erin Grosberg. “Consumers are starting to become aware of why organics cost more and are willing to make that investment in the health of their families.” She suggests grocers play to the shopping habits of time-starved new moms by offering impactful displays through easy-to-reach endcaps, or bundling multiple products for better savings. Along with new parents, COTA’s research shows both millennials (83%) and baby boomers (56%) are driving the growth of organics. “In that third stage of life, people are looking for ways to improve their health and stay independent longer,” says Patrick Barclay, product category manager at Goodness Me! Natural Food Market, which has nine locations throughout Ontario and carries only organic produce. “That’s why they are gravitating to a cleaner diet with organics.” Interestingly, across Canada it’s Alberta (74%) and British Columbia (69%) showing the highest per-capita consumption of organics, according to COTA. Doug Newstead, vice-president of food operations and merchandising at Calgary Co-op, attributes this trend, at least in Calgary—where the Co-op has 24 food centres—to a city filled with educated millennials who are especially concerned about eating healthier. “We have a strong agriculturally based economy too … and with the whole farm-totable movement, people want to support local [producers],” he says. Calgary Co-op has integrated its organic products within its regular aisles based on customer feedback. “We did initially segregate organics, but then our customers told us they wanted to be able to choose these products among the rest,” says Newstead. “They want to see it highlighted as organic on the shelf,

but within regular categories instead of having to look elsewhere.” WHAT KIND OF ORGANICS? So, which organics are consumers buying most? Fruits and vegetables are holding steady at No. 1, according to COTA, followed by meat/poultry and bread/grains. With a growing snacking culture in Canada, consumers are also on the lookout for healthy snacks—and that’s where some organic manufacturers are finding their niche. At Moose Jaw, Sask.-based Zak Organics, for example, crunchy peas are the main attraction. “Sure, veggies and fruits were the first things people went to for organics, but now they’re realizing they don’t have to cheat on the snack part either,” says company founder Allen Zak. “We started experimenting with things on our farm and realized we could make a healthy snack alternative that tasted good too.” The company recently added a fifth flavour (Mango Habanero) to its crunchy pea line, and will launch a sixth flavour before the end of the year. Big food players are seeking to grab a bigger slice of the organic market by introducing new items to their lines. Kraft Heinz, for instance, is launching organic versions of its Classico tomato sauce, while General Mills announced plans this past March to convert 34,000 acres of conventional farmland to organic by 2020. Even Red Bull is getting in on the trend with Organics by Red Bull, its new line of all-natural organic sodas launched earlier this year. For Canadian retailers, there’s a real growth opportunity to lure shoppers who are increasingly gravitating towards organics, believes Elizabeth Kowpak, director of retail marketing at Ontario-based Yorkshire Valley Farms. (The company produces organic poultry products, and is just releasing a new line of pre-packed sliced organic chicken and turkey.) Rather than putting a product on the shelf and hoping consumers will find it, she says it’s about helping them understand what they are paying for, especially if it’s at a premium. “Anyone who is considering buying organic is already engaged and will take the time to read pamphlets or other information,” explains Kowpak. “Retailers can rely more on their organic partners to educate them and provide point-of-sale information to pass onto their customers.” CG

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

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Hey, what’s baking? Baking ingredients aren’t just about plain old flour, eggs, baking powder and sugar any longer. Like nearly every other category in the grocery store, there is an influx of baking products that are organic, vegan, premium quality, packed with protein, gluten free, non-GMO—and sometimes, all of the above. As we approach fall baking season, check out these interesting and innovative baking ingredients that are popping up on store shelves. CUISINE CAMINO Cuisine Camino is adding two brand new chocolate chip offerings to its baking product line this fall: Sugar-Free Chocolate Chips and Semi-Sweet Mini Chocolate Chips. Both are free from common allergens such as milk, nuts, soy and gluten. Based in Ottawa, all Camino baking products are certified organic and fair trade.

WHOLESOME SWEETENERS

CRICKET FLOURS Consumers who are looking to add a protein boost to their favourite baking recipes need look no further than Cricket Flours’ All-Purpose Baking Flour. Blending bleached wheat flour, malted barley flour and cricket protein, the Portland, Ore.-based manufacturers of this product say it works as a one-for-one substitute in any recipe that calls for baking flour.

With the tagline “Mindfully Delicious,” Wholesome Organic Icing Sugar works well in frostings, fillings and for dusting and baking. Made by Texas-based Wholesome Sweeteners, this superfine icing sugar is certified organic, Non-GMO Project Verified, fair trade certified, gluten free, corn free, vegan and kosher.

BOB’S RED MILL The new Gluten Free Vegan Egg Replacer from Oregonbased Bob’s Red Mill is ideal for vegans, celiacs, people with egg allergies, or even those on a low-cholesterol diet. Ideal for baking muffins, cakes, cookies and more, this product is made with only four clean and simple ingredients: potato starch, tapioca flour, baking soda and psyllium husk fibre. Each 12-oz. bag holds the equivalent of 34 eggs.

August 2018 Canadian Grocer

BAKERS SUPPLY HOUSE The base of Bakers Supply House Non GMO Baking Powder is made from organic potatoes, which makes it a good choice for consumers who want to whip up organic baked goods. And the Surrey, B.C.-based company’s baking powder is not only free from GMOs, it’s also free from aluminum, corn, artificial flavours and artificial colours.

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SCALE OF THE CATEGORY Confection is a growing segment and represents 3 out of the 15 top impulse categories, making in-store conversions more likely.1

confection

cheese

milk

HOUSEHOLD PENETRATION Confection reach 97% of Canadian households, and have appeal across ALL ages, genders and ethnicity groups.2

97%

PROFITABILITY Confection can be high margin and extremely space efficient. Potential to drive 8 times the sales with similar shelf or display space. CONSUMER TRENDS

HERSHEYâ&#x20AC;&#x2122;S bars x $1.59* =

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bags of CHIPS x $1.49* =

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MODERN SNACKING MODEL

Consumer habits are constantly evolving. 90% of consumers snack multiple times throughout the day.3

breakfast

snack

lunch

snack

dinner

snack

DRIVE IMPULSE PURCHASE 77% of confection purchases are decided in-store.4

77%

PROMOTIONAL RESPONSE

50%

Of chocolate purchases were influenced by display.6

50%

50% did not plan to buy candy. 5

2 in 3 chocolate bar purchasers are influenced by at least 1 in-store activation.

1. Shopper Intelligence (Lucros); Planned vs. Impulse, All retailers, 2016 2. The Nielsen Company, Homescan, 52 Weeks ending July 01, 2017 Vs YAG Vs 2YAG 3,4,5. International Food Information Council Foundation Food and Health Survey 2015 6. IMI International, 2016 Recommendations only. All pricing, distribution, shelving, and promotional decisions are at the sole discretion of the retailer

Tempeh is expected to be the “next big thing” in fermented food

FERMENTED FOODS

Fermented frenzy Age-old foods like kimchi, tempeh and sauerkraut are experiencing a surge in popularity thanks to consumer interest in gut health By Anna Sharratt LIKE THE FERMENTED foods they sell, ideas around new products are perpetually percolating at Pyramid Ferments in Picton, Ont. “We have five different sauerkraut flavours and a kimchi line,” says Jenna Empey, Pyramid Ferments’ owner, who currently sells 13 fermented food products at Metro, some Sobeys locations and Whole Foods Market, as well as smaller Toronto-based indie grocers such as The Big Carrot and The Sweet Potato. For Pyramid, the business of selling fermented foods is good. “Our sales doubled between 2016 and 2017,” says Empey. As a result, Pyramid Ferments is now moving to a new production facility to keep up with growing demand. “We need to stay ahead of the curve,” she says. Fermented foods, though very old, are new again. And many are a far cry from the dusty pickling jars sitting in grandma’s pantry. Kimchi and sauerkraut

August 2018 Canadian Grocer

now sport a number of trendy flavours such as kale, smoked garlic, jalapeno, pepper and harissa. Fermented sausages are increasingly popular, as are tempeh (a traditional soy-based fermented food from Indonesia) and lactic-acid fermented pickles. And they are getting a whole lot of press. Fermented foods were ranked the No. 1 superfood for 2018, according to a Today’s Dietitian’s survey. “It’s more mainstream,” says Jess Pirnak, staff dietitian and nutrition manager at Choices Markets in Vancouver, when asked about the growing fermented foods trend. She adds that while the foods are being purchased by virtually all demographics for their health properties, it appears that health-conscious women in their 30s are the main consumers. “Gut health is huge right now,” says Pirnak. Jeremy Burton, a scientist at Lawson

Health Research Institute and deputy director, Canadian Centre for Human Microbiome and Probiotics, devotes much of his research to gut health. He’s currently working with small fermented foods producers, making connections between the foods they produce and the probiotic benefits they possess. At the moment, he’s working with a company that makes vegan fermented cheese and a kombucha manufacturer. Burton says there’s a theory that all disease originates in the intestines. “We are meant to eat bugs,” he says, noting that fermented foods repopulate the microbiome of the body with good bacteria that have been linked to better digestive, cardiovascular and brain health, as well as heightened immunity. “I’m trying to eat more of this stuff,” he says, confessing that some products such as sauerkraut are an acquired taste. That said, Pirnak notes that because every culture has its own fermented foods, everyone can find something that works with their cultural preferences and palate. At Choices Markets, kimchi and sauerkraut are top sellers and the store makes room for new products in the category. “Tempeh is the next big thing,” she predicts, with vegetarians seeking fermented protein sources. Empey predicts kvass, a “Ukrainian Gatorade” made of fermented beets, will also be one of the next big sellers. It’s refreshing and filled with electrolytes, she says, making it a popular choice among fitness types. Meanwhile, grocers are taking stock, promoting fermented foods aggressively and selling them in higher-traffic areas of the store. Sarah Dobec, marketing manager at Toronto’s The Big Carrot, says the store has even put on a largescale fermented foods event. “We have hosted an entire event around fermented foods and supplements called ‘The Ferment Event Under the Tent.’ It was a big event in our courtyard with vendors, speakers and samples.” She says the store also puts its fermented products on sale regularly and offers weekly samples. So, what’s the outlook for fermented foods? Pirnak says some fermented product categories could become saturated. But overall, it looks like fermented foods are here to stay, and are expected to see a lot of sales growth in the coming year. “I think everyone is on that bandwagon,” says Pirnak. CG

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PET POWER

With Rover and Fluffy now being treated like important members of the family, more and more pet parents are demanding “premium quality” when it comes to pet food and pet care products. In fact, many large human food manufacturers are getting into the premium pet food biz: this year alone, J.M. Smucker purchased Ainsworth Pet Nutrition, while General Mills acquired Blue Buffalo Pet Products. As pets take centre stage, this Nielsen data reveals how pet-related categories have been performing in Canada. Pet-related products - 52 weeks, ending May 26, 2018

PET NEEDS (TOTAL) 1. DOG FOOD (ALL TYPES)

$ Sales (000s)

$ Vol % Chg

Units (000s)

Units Vol % Chg

1,705,812,687.0

540,209,191.0

470,342,194.0

-1

110,775,917.1

CANNED DOG FOOD

101,725,713.0

91,027,856.2

MEAL & KIBBLED DOG FOOD

359,134,413.0

-3

18,684,103.7

-4

9,482,068.0

1,063,957.2

2. SOFT MOIST DOG FOOD CAT FOOD (ALL TYPES)

450,761,967.0

311,127,870.6

CANNED CAT FOOD

199,206,933.0

288,508,306.6

DRY CAT FOOD

250,902,670.0

-1

22,511,490.1

-3

652,364.0

108,073.9

227,003,653.0

36,796,092.0

-1

SEMI-MOIST CAT FOOD DOG TREATS 3. CAT TREATS CAT & DOG ACCESSORIES PET CARE PRODUCTS PET TOYS

73,376,342.0

27,300,894.9

-7

13,077,064.0

1,262,675.2

123,806,546.0

10,864,484.4

28,627,749.0

4,518,527.4

-3

REMAINING PET FOOD TREATS

36,154,684.0

5,210,435.5

-3

BIRD SEED

58,102,698.0

-4

7,030,391.4

-6

6,155,137.0

-1

655,721.7

-2

212,177,295.0

22,820,388.0

4,974,663.0

1,634,781.1

1,252,695.0

-9

211,011.7

-12

FLEA COLLARS CAT LITTER 4. CAT LITTER DEODORIZERS CAT BOX LINERS

SHUTTERSTOCK/GLADSKIKH TATIANA

1. Canadians spend a bit more on dog food than cat food. In the latest 52 weeks ending May 26, 2018, overall dog food sales were $470 million while cat food sales were $451 million.

2. Of all the dog food types, the “soft

moist” variety showed the greatest dollar and unit sales growth, at 12% and 10% respectively during the latest period.

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3. People are spending more on treats for

their cats—but they’re buying less of them. Dollar sales for cat treats were up by 4% reaching $73 million, while unit sales dropped by 7%.

4. Smelly cat, no more! Cat litter

deodorizers were up by 11% in dollar sales and 7% in unit sales. Meanwhile, cat box liners decreased by 9% in dollar sales and 12% in unit sales.

Perrier is introducing Perrier & Juice, a brand new bubbly beverage made with real fruit juice, available in three flavours: Strawberry & Kiwi, Peach & Cherry, and Pineapple & Mango. It’s 79% carbonated water, 17% fruit juice, 3.5% natural sugar syrup and 0.5% natural flavour.

NATREL WHIPPED COTTAGE CHEESE Classic cottage cheese gets a makeover Natrel Whipped Cottage Cheese is a new dip and spread made with cottage cheese, but whipped to a smooth and creamy consistency (no more lumpy texture!). Launching in September, it comes in three flavours: Plain, Chive and Garlic, and Roasted Red Pepper.

CLIF KID ZBAR FILLED Clif Kid Zbars now with creamy nut butter filling Building on the success of its Clif Kid Zbars for active kids, Clif is launching new Clif Kid Zbar Filled bars in Canada this fall. Featuring creamy nut butter filling, these organic energy snacks come in three flavours: Double Peanut Butter, Chocolate filled with Peanut Butter, and Apple filled with Almond Butter.

SOURCE: NIELSEN, NATIONAL, ALL CHANNELS, ALL SALES, EXCLUDING N.L.

August 2018 Canadian Grocer

CHECKING OUT George Condon

Canada’s new retaliatory tariffs on certain U.S. consumer goods are putting retailers in a tricky spot AS YOU HAVE likely heard, a trade war has erupted between Canada and our neighbours to the south. On July 1, Canada slapped a 10% tariff on more than 120 U.S. consumer goods in retaliation for our southern neighbour’s imposition of tariffs on Canadian- produced steel and aluminum. Canada has also applied a 25% surtax on U.S. steel and aluminum products. Good on Canada for defending itself! The problem, however, is that many products we routinely buy at the grocery store are from the United States and many will become pricier. As suppliers get hit with the extra cost, they’ll likely be forced to pass it along the chain to retailers. This presents Canada’s grocers with a dilemma: do they continue to stock the more expensive U.S. items that

August 2018 Canadian Grocer

have established brand loyalty among Canadian consumers? Or do they opt to cut back on the imports and bump up their supplies of made-in-Canada alternatives to appeal to both price-sensitive and patriotic customers? Among the U.S.-made products (about $16 billion worth) that are now subject to Canada’s counter-tariffs are ketchup, roasted coffee, soya sauce, strawberry jam, mayonnaise, salad dressing, chocolate bars, yogurt, fresh orange juice, soups and broths, pizza and quiche, confectionery, tomato sauces, cucumbers and gherkins, toilet paper, automatic dishwasher detergents and facial tissues. Mustard was initially on the hit list, but it got a last-minute reprieve (it seems Canada sends a lot of mustard seeds south of the border). All

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

SHUTTERSTOCK/LIGHTSPRING

THE TROUBLE WITH TARIFF TIFFS

of these products are now subject to the additional 10% tariff. It appears Canada made an effort to tax U.S. products for which there are Canadian-made alternatives. And some newly-taxed products seem aimed at punishing states that support President Trump’s protectionist policies; for instance, Kentucky, where bourbon is made. (U.S whiskies are also subject to the new tariffs.) That said, there are still at least two worries facing Canadians. The first, according to a report by the Retail Council of Canada, is that it is not certain that alternative suppliers can—or are willing to—“scale-up production to meet increased Canadian demand, given the uncertainties as to how long this trade dispute will last.” Sure, there are some Canadian products that can fill a void. U.S. maple syrup is taxed, but there will be no problem substituting Canadian maple syrup. Other products may be a bit more problematic. The second worry is that the unpredictable Trump may opt to impose more tariffs on Canadian goods. As the RCC points out, “[The] vendors’ solution will be to seek enforceable long-term commitments, diminishing retailers’ flexibility on their product mix even after [the] dispute with the U.S. is resolved.” President Trump seems convinced that trade wars with Canada, Europe and China will help “make America great again.” He doesn’t grasp that trade wars are as bad for the United States as they are for his targeted countries. As we’ve heard again and again, there are no winners in a trade war. For Canadian grocers, the best advice seems to be to watch your shoppers carefully, listen to them and respond accordingly. CG

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