Canadian Grocer - May 2018 by ensembleiq

Q&A with M&M Food Market's Andy O'Brien

VEGAN SNACK ATTACK!

MAY 2018

Walmart's

war on WASTE Lee Tappenden on Walmart Canada's zero-waste strategy

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2017 GRAND PRIX

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CONTENTS May 2018

COVER STORY

Volume 132 Number 3

A PLAN FOR ZERO WASTE

OPINIONS

05 Front Desk 18 Shopper Sense 50 Checking Out

Walmart Canada is working to stamp out food waste, and alleviate food insecurity, too

PEOPLE

06 The Buzz

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

FEATURES

A RETAIL REINVENTION

10 Davis Yung

Meet the president of Fresh Direct Produce—he’s bringing a world of specialty produce to grocers

IDEAS

20 A look inside Le Marché

13 Extreme makeover

MEET THE CONTENDERS

15 Tuning out the recalls

Find out how M&M Food Market’s total rebrand is going so far

Esposito in Boisbriand, Que.

How aware are Canadians when it comes to food recalls? (Not very!)

31 Check out the 2017 Canadian

16 Best in show

Grand Prix New Product Finalists

Some of the top new products on display at the Grocery & Specialty Food West show

SUSTAINABLE THINKING

AISLES

39 Retail thought

44 Drinks with benefits

Functional beverages are big hit, as consumers seek an extra boost of nutrition and functionality

leaders collaborate on ideas for a greener industry

47 Not grandpa’s TV dinner

There’s a whole new generation of healthier, high-end frozen meals

48 Vegan snack attack

From vegan jerky to crunchy bean chips, the popularity of plantbased snacks is blooming

49 The great outdoors

COVER IMAGE: MIKE FORD

As BBQ season approaches, Nielsen reveals data on food storage and disposable dishware

THE

#1 MEAT SNACK¹ IN THE U.S. IS NOW IN CANADA!

COME L E W E YOU’R

MEAT SNACKS is one of the fastest growing categories in Canada showing % growth.2

+19

Canadians are % of already aware of Slim Jim

with the brand having comparable levels of awareness to other leading Meat Snack brands in Canada.3

LEGENDARY, BOLD, MOUTHWATERING,

MEAT STICK GOODNESS

GiANT 24 X 28g

MONSTER 18 X 55g

Original Mild Tabasco

BEEF & CHEESE 18 x 42g / Mild

Original Tabasco

Edgy personality makes SliM jiM

BIG WITH 12-17 YEAR OLD GUYS

GO FIGURE.

NO OTHER MEAT SNACKS BRAND EFFECTIVELY TARGETS THIS CONSUMER DIRECTLY. Source: ¹ IRI 52 Weeks ending 01/21/2018. ² Nielsen Market Track, National All Channels, 52 weeks ending January 6, 2018. ³ Usage and Attitude Study, Meat Snacks. November 2017 Base: All respondents (N=415)

PRESIDENT, ENSEMBLEIQ-CANADA Jennifer Litterick

FRONT DESK

jlitterick@ensembleiq.com

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

SENIOR DESIGNER Josephine Woertman

jwoertman@ensembleiq.com

CONSULTING EDITOR George H. Condon condug@sympatico.ca

DIRECTOR OF PRODUCTION & DESIGN CANADA Derek Estey destey@ensembleiq.com

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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.

SAINSBURY’S

Printed in Canada at Transcontinental.

Grocers like Sainsbury’s are getting innovative with green initiatives like this electric bike delivery fleet

THE SLOW GREENING OF GROCERY

Bit by bit, grocers are working to be more sustainable A FEW YEARS back, The Guardian raised the following question by way of a headline: “Can Supermarkets Ever Be Sustainable?” It was a fair question; operating a grocery store demands a hefty amount of resources. Energy-intensive refrigeration systems need to be kept humming, as does the supply chain to ensure a steady supply of foods to fill shelves. And now, increasingly, retailers must meet the consumer’s demand for home delivery, too. Add it all up and the business of selling and distributing food is not always the most sustainable. But grocers are trying, and there are scores of examples around the globe of retailers doing innovative things to do better for the planet—and their bottom lines. In Europe, Metro Group debuted a 90,000-sq.-ft. zero-energy wholesale store in the Austrian town of St. Pölten last fall, a first for the retailer. And grocers like Iceland in the United Kingdom and Ekoplaza in The Netherlands have taken a firm stance on single-use plastic—one is eliminating the material from private-label products, while the other

has introduced a plastic-free aisle in store. But we don’t have to look across the pond for great examples of progressive retailers; there are plenty of examples in our own backyard. Longo’s, for instance, is constructing a net-zero store in Stouffville, Ont. Loblaw is taking a step toward zero-carbon deliveries by moving its trucking fleet to electric vehicles, while Walmart Canada is “doubling down” on waste, pledging to achieve zero food waste to landfill by 2025 (read how Walmart plans to do this on page 26). But the issues related to sustainability are too big and complex to take on alone (read how the industry is coming together on decarbonization on page 39). Collaboration is key. Let’s see more of it!

Shellee Fitzgerald

Editor-in-Chief

sfitzgerald@ensembleiq.com

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May 2018 Canadian Grocer

THE BUZZ

The latest news in the grocery biz

Gatineau, Que. is home to a new Marché Adonis. The new store, the first in the Outaouais region, opened March 14 following six months of construction. The 41,000-sq.-ft. store features a buffet-style counter of fresh-cooked foods, a 50-seat eating area and large fresh produce sections. The store’s manager is 18-year Adonis veteran Abdallah Baradhy. Farm Boy expands again. The grocer, which identifies itself as “Ontario’s fastest-growing local fresh food retailer,” opened its 26th location in Hamilton, Ont. in March. The 22,000-sq.-ft. store is the first in Hamilton and follows an opening earlier in the month in Toronto (Etobicoke).

(Above) The grand opening of Marché Adonis in Gatineau, Que. (Right) Farm Boy opens store number 26 in Hamilton, Ont.

SAVE-ON-FOODS opened its second Saska toon location in April. Among the features at the new Cumberland Avenue store: a full-service pharmacy, in-store Starbucks, a wing bar, an extensive selection of organic and natural foods along with click-andcollect and home delivery services.

DEALS IGA and its merchants have signed a long-term partnership with Tennis Canada. As part of the arrangement, IGA will become more involved with promoting the sport, and both organizations say they will make tennis more accessible to Quebec families. Under the deal, Montreal’s Jarry Park Stadium will become IGA Stadium.

May 2018 Canadian Grocer

A new FOODLAND is open for business in Owen Sound, Ont. The 36,000-sq.-ft. store replaces an older, smaller Foodland that was located next door.

(L to R) Eugène Lapierre, senior VP professional tennis, Tennis Canada, and Pierre St-Laurent, executive VP, Quebec, Sobeys

SHOPPERS DRUG MART has unveiled a sec ond Wellwise store in the Toronto sub urb of Etobicoke. The new retail concept from the Loblaw-owned pharmacy chain focuses on wellness, with a merchandise mix that ranges from mobility aids and sleep therapy products to yoga mats and pilates gear. The stores also offer special ized services such as an on-site dietitian. A Wellwise pilot store opened in Toronto in September.

MARCHE ADONIS, FARM BOY, IGA/SOBEYS

Rougemont, Que.-based LASSONDE INDUSTRIES—the maker of Oasis and Everfresh beverages—is acquiring OLD ORCHARD BRANDS, a familyowned juice and beverage company based in Sparta, Mich. Lassonde says the deal will strengthen its presence in the U.S. national juice brands sector.

North Vancouver is home to a brand new WHOLE FOODS MARKET. The store, located on 120 East 13th Street, opened on April 26. It is the natural food retailer’s 14th location in Canada.

THE BUZZ

COMINGS AND GOINGS EVENTS

The United Fresh Show 2018 is set to take place at McCormick Place, Chicago from June 25 to 27. Visit unitedfreshshow. org for details. The Summer Fancy Food Show returns to New York City’s Javitz Center from June 30 to July 2. Visit specialtyfood. com The Institute of Food Technologists’ IFT18 takes place at Chicago’s McCormick Place from July 15 to 18. Visit iftevent.org for more details.

AWARDS/RECOGNITION AGROPUR’S CAMEMBERT L’EXTRA took home first prize at the World Champion Cheese Contest in Wisconsin in March. The creamy cheese, made in Saint-Hyacinthe, Que., beat out 17 other products for the win. TINA LEE, CEO of T&T Supermarkets, was named Executive of the Year at the 5th Annual Ascend Canada Leadership Awards. The award recognizes personal dedication, career achievement and contributions to the community.

For the second year in a row, Ontario grocery chain VINCE’S MARKET has landed on the list of Canada’s Best Managed Companies. Presented by Deloitte and CIBC, the program recognizes excellence in private, Canadian-owned companies. (L to R) Vince’s Brian Johns and Giancarlo Trimarchi

CHFA East Conference and Trade Show, put on by the

Canadian Health Food Association, will be held at the Metro Toronto Convention Centre from September 13 to 16. Visit CHFA.ca

AGROPUR

GIVING BACK

Saskatoon-based FEDERATED CO-OPERATIVES LTD. (FCL) and the Saskatchewan Junior Hockey League (SJHL) have announced a new program to support all players of the league affected by the Humboldt Broncos bus crash that killed 16 people in April. To date, more than $500,000 has been committed to the fund—from both local Co-ops and FCL head office—which will provide mental health assistance and counselling for players in the league impacted by the tragedy.

TAMMY SADINSKY has joined Walmart Canada as its vicepresident of marketing communications. Sadinsky is a former Tim Hortons executive. BRUNO KELLER has taken on the role of head of business development at Kraft Heinz Canada. Keller comes to the newly created position from the company’s European operations where he was managing director of Kraft Heinz Italy.

High Liner Foods has appointed ROD HEPPONSTALL as the company’s president and chief executive officer. Hepponstall, who has held positions at Conagra and Maple Leaf Foods, assumes the role from HENRY DEMONE, who will continue as chairman of the company. The Tea and Herbal Association of Canada has announced that SHABNAM WEBER will be its new president. Weber replaces LOUISE ROBERGE, who is retiring in June. STEVE YOUNG has joined BCfresh as its new vice-president of sales. Young takes over sales responsibilities from BRIAN FAULKNER, who is transitioning to the role of vice-president, business development and marketing.

After a career spanning more than four decades in food retail, MARY DALIMONTE, senior vice-president of merchandising and commercial programs at Sobeys—and also a recipient of Canadian Grocer’s 2017 Star Women awards—is retiring in May. Described by colleagues as a trailblazer, Dalimonte held senior roles at Loblaw before joining Sobeys in 2008. Among Dalimonte’s many accomplishments is bringing Sobeys’ Urban Fresh concept to market.

May 2018 Canadian Grocer

category close-up

greeting As Canadians bask in warmer weather and make plans to celebrate the special days of the season, it’s time to focus on greeting cards.

cards

Happy days of spring

Even in this digital era, greeting cards remain a traditional way to express affection and congratulations for the happy days of spring: Mother’s Day, Father’s Day and graduation. And there’s nothing old fashioned about today’s unique and colourful cards that boldly reflect the latest consumer trends. Rod Sturtridge, president of Carlton Cards, shares his insights on current category trends and sales opportunities for grocery retailers.

How are changing consumer trends reflected in greeting cards?

Trends that resonate with consumers are continuously changing. Currently, consumers want the opportunity to acknowledge diversity and individuality and to empower the card-recipient, so they respond to messages that celebrate what makes each of us unique. Additionally, vibrant colours bring a sense of optimism and elicit the feeling of escape that consumers are looking for as a break from their day-to-day. Recent trends that will remain popular in 2018 are texture and playful messages. Our digital world has consumers touching things that are so smooth, our fingers crave new surfaces to touch! Dimension and texture continue to deliver the artisan and tactile elements we are seeking. Clever and unexpected language, such as puns and wordplay, allow consumers to connect in a way that feels authentic and relevant.

New layer of fabulous from Papyrus

Partnering with lead designers for New York Fashion week, Carlton Cards’ Papyrus brand, the leading premium brand in the industry, is ready for its close-up.

Sparkle and shine

Fun-loving shoppers will find boutique collections of custom designed cards from favourites such as Adam Selman, Cromat, Zang Toi, Lori Weitzner and Judith Leiber.

Star Wars

What’s trendy in cards today?

Premium cards continue to show a strong performance in the category. Fine finishings such as gems, micro gems, handmade attachments, feathers and laser woodcraft are huge with millennials, especially when paired with a beautifully printed envelope and a specialty sticker to seal the card.

How can grocers attract more shoppers to the greeting card aisle? Our shoppers’ research shows 77% of impulse purchases are triggered by seeing the card department. This reinforces the continued importance of well-positioned, prominent departments and well-positioned displays.

However, merchandising no longer starts when shoppers set foot in the store so it is important to reach consumers pre-shop when they are looking for inspiration, answers and promotions on how to actually make meaningful connections.

Finely detailed micro gems expertly placed on a beautiful paper stock feature Star Wars in a brand new way. With cards so spectacular, Star Wars fans may choose to display the cards as art in their homes!

For dads everywhere

Unique and upbeat messages for Dads — relax and rock on!

Research also shows consumers include greeting cards on their shopping lists. Retailers can increase their share of trips and purchases by making greeting cards a part of their pre-shop marketing vehicles: weekly print and digital flyer advertising, email and mobile advertising, digital coupons offered through their shopping app, targeted loyalty program offers — and more. Providing inspiration and coupons or promotions represent key marketing opportunities, particularly with younger consumers who are influenced by in-store social media and store websites through their mobile devices. This behaviour offers opportunities to connect and inspire them throughout their shopping journey.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–MAY 2018

Cards as unique

as every relationship

Carlton Cards Premier collection is the latest addition to our portfolio of premium brands. These amazing cards fulfill the needs of shoppers looking for high-quality finishes, elaborate embellishments and warm emotive messages for all of their relationships. Itâ&#x20AC;&#x2122;s one more way Carlton Cards helps consumers create meaningful connections while driving your sales. For a sample of these amazing cards call us at 1-800-663-CARD.

PEOPLE

Who you need to know

The Facts Who

Davis Yung Position

President, Fresh Direct Produce What’s Next?

A push into the U.S. market

FOCUSED ON FRESH

Davis Yung’s mission is to bring a world of ethnic and specialty produce to grocers By Rebecca Harris Photography by Adam Blasberg

PEOPLE

defining moment in Davis Yung’s life occurred at a Vancouver McDonald’s in 1987. Then 17, Yung was a foreign student newly arrived in Canada from Hong Kong. “I’m trying to order and I see a blank face across from me as the employee tries to figure out what I’m saying,” says Yung. “That day, I quickly realized, ‘Okay, I’m in a new country. I have to make it. I have to study hard and work hard if I am going to be successful in this new place.’” His determination paid off. Today, Yung is president of Fresh Direct Produce, a produce importing, marketing and distribution company he founded in 2003 with partners Albert Lum and Kam Chiu Lee. The company started out with just two trucks, a small warehouse and a long list of cold calls, but the vision was set from day one. “We wanted to become a leader in the industry and we wanted to make a difference,” says Yung. Yung entered the produce industry by chance. After finishing a degree in business administration at Simon Fraser University, Yung worked as a financial analyst but lasted only four months. “It was a very structured, 8-to-4 job doing spreadsheets, and I knew right away it wasn’t for me,” recalls Yung. A connection from a friend led to a job at VanWhole Produce in 1992. Over the next decade, Yung learned the ropes of the produce business, with roles in sales, logistics, buying and business development. In 2001, the company was sold to The Jim Pattison Group, and Yung’s boss and mentor, Jason Du, retired. Yung—who by then had earned an MBA and CMA designation—decided to move on. He did consulting for about a year before starting Fresh Direct Produce. “There was a lot of consolidation in the produce industry and I felt there was an opportunity for another company that could do things a bit different, a bit more innovative, a bit more progressive.” Today, Fresh Direct Produce is a leader in ethnic and specialty fruits and vegetables. The Vancouver-based company serves independent grocery retailers (with conventional produce, too), as well as regional and national chains, including Thrifty Foods, Safeway,

30 SECONDS WITH...

Sobeys, Whole Foods Market, Walmart, Loblaws and T&T Supermarket. “For smaller retail operations, we want to be their one-stop shop,” says Yung. Meanwhile, larger retailers come to Fresh Direct Produce for the specialty, tropical, ethnic and value-added offerings, such as the company’s private-label Simply Hot (peppers) and Simply Fresh (Asian vegetables) lines. “We wanted to be an extension of their procurement team, especially with the demographic shift in Canada for the past 20 years,” says Yung. Part of the company’s secret sauce is tapping into immigration trends and changing consumer tastes. “One thing we do very proudly is bring in fruits and vegetables from all over the world so immigrants can enjoy the foods they had at home,” he says. “At the same time, we introduce new products, flavours and tastes to mainstream consumers.” In the past five years alone, Fresh Direct Produce has increased its offerings from 600 to 1,000 conventional, organic and imported items sourced from 32 countries. It has also expanded its warehouse facilities from 55,000 sq. ft. to 150,000 sq. ft. across two locations in Vancouver, as well as a new facility in Calgary. The big goal now is to break into the U.S. market. “It’s quite fragmented in that market and we feel we can help drive a more consolidated effort to get [global produce] into the chain stores,” says Yung. He sees California, Los Angeles specifically, as the logical place to expand Fresh Direct’s operations. Its port allows for imports from the Pacific Rim and South America, and “L.A. is a hub for customers all across the U.S. to pick up their produce from the West Coast.” The second goal, says Yung, is to continue with staff development—an important lesson he learned from Du. “He built a very successful business, but it wasn’t just about growing the business. It was about helping people be better,” says Yung, whose workforce has now grown to 230 employees. “I see the difference with someone like myself—no experience and no produce knowledge. But given the right environment, supportive people and a vision, we can be successful … If each one of us can truly unleash our potential, anything is possible.” CG

DAVIS YUNG Where does your entrepreneurial spirit come from?

My dad was an entrepreneur. He didn’t have a lot of education and started working when he was 14. He eventually started his own construction contracting business. But I heard a story that he once tried to get an ice cream cart and the cart was too heavy. He couldn’t even push it. So that kind of image is in my head: if you want to make it, you’ve got to be determined and you’ve got to figure it out.

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

My former boss, Jason Du, said most people work hard, so working hard is not enough. That’s a given. You have to have the mindset of improving and a deliberate practice to make the business better.

What’s your favourite thing about working in this industry?

Colourful, tasty, flavourful products and the opportunity to bring in everything from everywhere around the world.

What do you like to do outside of work?

Besides spending time with my family, I like to get a good workout in and sweat it out. It’s a high-stress, fast-paced working environment, so whenever I get a chance to do some spinning, biking, stretching or yoga, that’s my best day.

May 2018 Canadian Grocer

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to our dedicated sponsors for your continued support. CHAIRMAN CLUB

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WORLD RICe M Y

Dainty has a bold new look; attractive and efficient. Whole grain Brown Basmati rice proudly joins Basmati, completing the collection from the Himalayan foothills of Pakistan and India. Dainty offers a wide variety of 100% natural rices which are carefully cleaned or milled at Canada’s only rice mill, the Dainty facility in Windsor, ON.

IDEAS

Retailers, suppliers, shoppers, insights

Q & A WITH ANDY O’BRIEN

M&M FOOD MARKET

Extreme makeover M&M Food Market has transformed itself in recent years. To find out how the rebrand is going, we caught up with CEO Andy O’Brien By Carol Neshevich

hen Andy O’Brien took over as CEO of M&M Meat Shops in 2014, the brand was noticeably tired. Not much had changed since the 1980s and ’90s for M&M, which had become best known for its frozen appetizers. O’Brien quickly went to work on a major brand transformation, including a completely revamped store design, a significant number of new products, the removal of artificial colours, flavours and sweeteners from all the products, and

a name change to M&M Food Market. Canadian Grocer recently caught up with O’Brien to find out how M&M’s extreme makeover has been progressing.

Why was this transformation necessary? When I arrived in 2014, it was clear that M&M had really fallen off pace with the market. Whenever you talked with someone, they’d be like “Oh, M&M? I haven’t been there in a while.” It wasn’t relevant anymore. So we needed a radical change across the business. May 2018 Canadian Grocer

IDEAS What was your “vision” for the process? We wanted to still be known as the destination for entertainment food, but also for everyday value-added meals for people who are “time poor.” Maybe they’ve got two kids and one’s in dance and one’s in hockey, and they need to put a quality meal on the table in under 30 minutes. They’re looking for something to help them in their busy lives, but they don’t want to sacrifice quality. We knew our food really could be positioned that way, so we came up with a new brand positioning around helping you make real food for real life.

How did you achieve this? There were several key pillars that we focused on. The first one was around making sure we had the right team in place, both at head office and at the store level. The second was around the food portfolio. We did an inventory of all of our food and, quite frankly, we discontinued probably 20% of it within the first six months because it didn’t fit with where we were going. And we identified probably 200 to 300 products that over the next couple of years we would have to be bringing forward to the marketplace. We brought in meal kits, new soups and sauces, new appetizers, smaller packs, single-serve proteins, new desserts, a number of gluten-free products … Every quarter we’re launching probably 25 to 40 new products. We also removed all artificial colours, flavours and sweeteners from all of our products. The third pillar was our in-store environment. We spent a lot of time in research with design teams figuring out the right design for us. There were a couple of major design elements consumers wanted us to change. First and foremost, they wanted the counter removed. [Previously M&M had a service counter separating customers from the product-filled freezers; customers had to walk up to the counter to request their products from an M&M staff member.] They love the aspect of having service, but they wanted it on their own time. So we didn’t want to lose that service element, but we wanted to give consumers the freedom and flexibility to roam about the store. Also, there was the packaging—everything was in white boxes before. Those white boxes were fantastic in the 1980s, but a lot has changed since then. We really elicit a lot more food appeal now through our

May 2018 Canadian Grocer

redesigned boxes. And it’s much easier to shop our store now. When you walk in, you’re basically walking through in the order of how you would have a meal. As you walk you can go, “OK, I’ve got my appetizer, I’ve got my mains, I’ve got my sides, what’s for dessert?” It makes the in-store experience much better. The fourth thing was what I call optimizing the network. And that means moving stores around, and making sure we have the right stores in the right place. We didn’t have a lot of stores in urban areas, so we’ve been focusing on developing urban areas where a lot of younger people are living.

How have things been going so far? We’re very happy. We’ve been able to improve the profitability of our franchisees. We’re opening new stores, which M&M hasn’t done since 2005. So we’re very pleased with the results. Now, I have to say it took us a significant amount of investment to get things right and figure this out. It wasn’t taken lightly. Between the research, the store remodelling, the renovations, and moving the head office from Kitchener-Waterloo to Mississauga, Ont., it was a $20-million investment. So yes, we’re happy with the progress, but it came with significant investment behind it with a lot of great people.

How many stores have been transformed? We’re now at 100 [out of 350]. It took us about a year to 18 months to figure out the design. Then we got the design in market, and had to test it a bit to make sure it was getting the results we thought it would. And it did; it’s providing significant lift factor for the stores. Consumers love it. It’s bringing back people that haven’t shopped there in a while, and the people that have been shopping come back more often. So in the last 24 months,we’ve got 100 stores [transformed], and we’re trying for an average of five per month right now.

How do you see M&M evolving? I think we’re perfectly poised for growth. Over the next five years I see not only growth in the penetration of the stores and an evolution of the food portfolio, but also an increase in utilizing technology for whatever it might be—whether it be click and collect [which we currently have] or delivery, or just as a platform to share information about our food.

POLL RESULTS

GOING GREEN GROCERS MIGHT BE inclined to agree with Kermit the Frog’s assessment: it’s not easy being green. Those in the business of selling food have many sustainability issues to tackle—from energy use to food waste to responsible sourcing—all of which require long-term commitments and sometimes hefty investments. So, we wondered: what is the main sustainability priority in your operation right now?

We asked readers on CanadianGrocer.com:

What is your priority when it comes to sustainability initiatives in your business?

42 21%

REDUCING FOOD WASTE

ENERGY EFFICIENCY

19%

WORKING WITH SUSTAINABLY RESPONSIBLE SUPPLIERS

CURBING PLASTIC USE

SHUTTERSTOCK/BROOKE BECKER

IDEAS

TUNED OUT

FOOD RECALLS constantly capture the headlines, but a new study by Dalhousie University finds there is a lack of awareness and an abundance of confusion around food recalls. The survey of 1,049 Canadians shows the majority of consumers greatly underestimate the number of recalls issued by the Canadian Food Inspection Agency (CFIA). More than 61% of those surveyed said they thought there were fewer than 50 recalls in 2017, while the actual number was 155. Sylvain Charlebois, dean of the faculty of management at Dalhousie University, says the results indicate Canadians are confused about food recalls. “In 2017, we had three recalls a week, on average, and that’s a lot of noise,” he says. The CFIA communicates food recalls through social media channels such as Twitter and Facebook, an e-mail notification system and the Healthy Canadians app, as well as a public warning on Canada Newswire when required. Information on all recalls is posted to the CFIA website (www.inspection.gc.ca) and Healthy Canadians website (www. healthycanadians.gc.ca). To improve communication with the public, Charlebois says CFIA’s website should be the first fix. “They need to make sure the information on the website is readily available and easy to understand within seconds. Right now, there’s a lot of scientific gibberish that few people understand.” Secondly, Charlebois says the CFIA

should “close the loop” on recalls. “It’s great to say to people, ‘stop eating this or that.’ But they should also provide information about what goes on during the investigations, and also when consumers can eat a product again safely.” In a statement to Canadian Grocer, CFIA spokesperson Natasha Gauthier said: “The CFIA believes we can always do better. The survey highlights communication gaps, including some based on education and income levels. We will be studying the data more closely in the coming months to see how we may apply this information to our practices.” Charlebois says the more the CFIA can do in terms of risk communication, the better for the grocers. “Grocers are often put in a position to take the hit on any recall,” he says. “They’re the ones interacting with the public ... If you have a public agency serving the public and that actually provides more information and becomes more transparent, it will make grocers’ duties as risk communicators less onerous.” While food recalls have become more of a concern to Canadians (57%), more than 71% of respondents agreed that when they hear about food recalls, they feel confident because the regulatory system is working. Charlebois says that high level of confidence is a fundamental asset for the government. “But at the same time, you also want to make sure people understand how the system actually works. And I’m not sure that’s the case right now.” CG

Despite their high frequency, Canadians are pretty much oblivious to food recalls By Rebecca Harris

RECALL AWARENESS: THE STATS Who is responsible for food safety in Canada? Respondents were asked which three people/organizations were the most responsible for ensuring food safety in Canada. Canadian Food Inspection Agency

89.2%

Food Producers

Health Canada

Food Retailers

Agriculture and Agri-Food Canada

Provincial/Territorial Governments

61.4%

50.5% 45.9% 37.8%

21.4%

Thought there were fewer than 50 recalls

34.8%

Thought there were 50 - 100 recalls

26.3%

Farmers

20.1%

Consumers

4.4%

17.9%

Prefer not to answer Other, please specify

How many recalls do you think were issued by the Canadian Food Inspection Agency in 2017?

1.4% 0.4% 0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Thought there were 151 - 200 recalls

ACTUAL # OF RECALLS: 155

SOURCE: DALHOUSIE UNIVERSITY, 2018

May 2018 Canadian Grocer

IDEAS

BEST IN SHOW Loads of new products were on display at the Grocery and Specialty Food West show in Vancouver recently. A jury comprised of local food experts was asked to choose the Top 10 in Grocery for 2018. Among the winners, here are some of our favourites:

Blue Dragon 3 Step Meal Kits by ID Foods Consumers can whip up an authentic Thai meal in three easy steps with this handy Blue Dragon kit.

Apple & Eve Vegan Protein Smoothie by A Lassonde A vibrantly coloured vegan smoothie with 8 grams of plant protein and no added sugar.

Fatso Hybrid Peanut Butter by Fatso This all-natural “hybrid” peanut butter is enriched with things like avocado oil and chia seeds.

Monteli Cauliflower Thin Crust Pizza by Tree of Life Those seeking a vegan, gluten-free pizza base made of cauliflower need look no further.

CasusGrill by CasusGrill Canada A portable, 100% biodegradeable barbecue that is ready to grill in five minutes.

Don’t worry, we got your pack.

Give your customers a guilt-free cup!

Contact our Broker Advantage Sales and Marketing 1.905.475.9623

Whole Bean Jeff LeDrew, Jumping Bean jeff@jumpingbean.ca

Pods Mark Berish, Club Coffee mberish@clubcoffee.ca

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WHY MILLENNIALS STILL MATTER Understanding the purchasing power of this group can be tricky, but it’s well worth the effort ACCORDING TO STATISTICS CANADA, those aged 20 to 39 years old represent 27.5% of the Canadian population, with males at 13.9% and females at 13.7%. This equates to about 10 million people. As a cohort, millennials spend, on average, $509 per household per month across fast-moving consumer goods (FMCG) categories (compared with $685 for the boomer generation), accounting for just 12% of overall FMCG dollars. Millennials are currently spending less than what we’d expect, given the size of the overall

steep declines from 2012 through 2017. This means manufacturers and retailers face fewer opportunities to capture shoppers at the shelf and influence in-store decisions. Millennials are no exception to this trend. In the last year, millennials’ rate of decline in trips per household was approximately twice that of the overall Canadian population. In addition, millennials make 28 fewer trips than the average Canadian household annually. Despite making fewer trips, on average, these young consumers are likely to spend more than other cohorts per shopping occasion. Here lies the opportunity. While the number of trips millennials made declined by 5% in the last year, the amount they spent per household grew by 4%. So when compared with the total Canadian population and the boomer generation, specifically, millennials tend to shop less frequently but spend more per trip. In fact, millennials spent just over $7 more per trip than the average Canadian household and close to $11 more than boomer households in the last year. Millennials may be swapping trips to the store with trips to restaurants. They led other age cohorts in trips per capita to restaurants during the last year. And given the constraints felt by city core dwellers, this makes sense. It’s not uncommon for millennials in city centres to forgo a traditional dining room or additional storage space

When compared with the total Canadian population and the boomer generation, specifically, millennials tend to shop less frequently but spend more per trip cohort; however, the importance of this group is expected to grow in the coming years as they move through different life stages and income levels. Now that we understand the size of the prize of the millennial group, the question becomes: how can we capitalize on the opportunity millennials represent? On the whole, Canadians continue to make fewer total shopping trips—with

May 2018 Canadian Grocer

in their homes due to costs of living. Furthermore, the high concentration of restaurant options with eclectic cuisines makes dining out a desirable and easy alternative to cooking at home. Millennials with kids make more trips to the store than their counterparts without kids. But basket size, or the amount they spend during those trips, truly differentiates these two groups. Regardless, declining traffic is a trend that all millennials are driving. Time, convenience and life stage all play a role in challenging millennials’ trip rates. In order to boost trips among this cohort, manufacturers and retailers should focus on boosting traffic across all millennial homes, regardless of whether there are children in the mix. That said, armed with the knowledge that millennials with kids spend substantially more per trip than millennials without kids, there is an opportunity to identify and capitalize on where this consumer group is spending the most dollars, and what they are spending their money on. Planning ahead requires understanding the new paths to purchase. Digital disruption and considerable population shifts are upon us, and millennials are at the helm of these changes. These consumers are in their early adulthood, approaching key milestones while still intertwined and influenced by the generations before them. This generation is, quite literally, the future. While understanding and harnessing their purchasing power can be a challenging task, it’s imperative that manufacturers and retailers remain at the forefront of consumer decisions and—more importantly—millennials’ decisions to get a share of their spending dollars. CG

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

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FEATURE

With a brand-new store, Montreal staple Le MarchĂŠ Esposito is reinventing itself By Danny Kucharsky Photography by Chantale Lecours

STORE PROFILE

A RETAIL REINVENTION PHIL ESPOSITO INSISTS he and his two brothers aren’t trying to shake up grocery with the opening of the new concept store for their family-run Le Marché Esposito in Boisbriand, a suburb of Montreal. “We didn’t reinvent grocery,” he says of the fifth Esposito store, which opened last November. “We’re reinventing ourselves.” The $2.5-million, 15,000-sq.-ft. outlet marks a rebrand and new beginning for the grocer, a Montreal staple since their father Angelo Esposito opened an 800-sq.-ft. store in the Park Extension neighbourhood back in 1960. Now in its second generation, Esposito is run by brothers Phil, Tony and Johnny,

vice-presidents who all wear a number of hats for the chain. With the new store and format change, Esposito is sticking with the core philosophies his father established back in the 1960s, which were “fair prices and quality” while also bringing back “the neighbourhood grocery feel,” something he says is lacking in large-format stores. “We just weren’t changing with the times,” Esposito says. “The thought was to have a really nice store that is very price- conscious where everyone can shop—(with) good quality products, freshness, a focus mostly on perishables, ethnic goods and fair prices.” May 2018 Canadian Grocer

Signage and carefully selected products signal the store’s Italian flavour

most conventional grocery stores, the look, feel and service you get at a store go hand-in-hand with price, he says. In other words, the lower the prices, the less bells and whistles. “We didn’t want that,” Esposito declares. Here, “you get great service, personalized service, good quality products and a nice ambience.” The flagship Boisbriand store, on the north shore of Montreal, is the company’s first outlet off the island. It’s located in a building on Chemin de la Grande-Côte that formerly housed a Provigo store, but had been vacant for two years. More than half of the selling space is devoted to perishable foods and the store is designed in hues of grey, brown, black and red. “We wanted a contemporary, clean feel,” Esposito says. Customers enter the store in the meticulously maintained produce section, which Esposito says contains fruit and vegetables not found in typical grocery stores. “A lot of the independents are doing fresh because that’s how they’re competing,” he says. “Any perishable product you’re going to buy here is going to be less expensive than what you’re going to pay in a conventional chain store.” Ten varieties of sausage are made on-site daily, while organic, antibiotic- and hormone-free items fill the meat counter. And unlike “a lot of chicken in grocery stores that’s filled with water, ours is natural,” Esposito says. In the deli section, Canadian and Italian prosciuttos and other Italian cold cuts sit alongside turkeys and hams. Shoppers at Le Marché Esposito can also choose from a large selection of imported cheese from around the world, including Italian favourites such as bocconcini and burrata, “which is becoming more and more

May 2018 Canadian Grocer

popular.” Fresh bread is baked onsite and traditional Italian desserts such as cannoli are brought in from local bakeries. The Italian flavour of the store is immediately obvious, and to reinforce this focus, store signage is presented in both French and Italian. “We feel that Italian [food] is something that is geared toward everyone,” says Esposito. Another highlight of Le Marché Esposito Boisbriand is its commercial kitchen where everything is made from scratch. “Everyone wants a home-cooked meal (but) no one has time. We thought, ‘You know what, we’re going to make nice rustic Italian food with some recipes from mom.’” Brother Tony works in the kitchen “to make sure my mom’s recipes are followed,” Esposito jokes. “It’s good old Italian cooking—no recipes are written down.” Freshly prepared meals include lasagna, eggplant parmesan, arancini (breaded rice balls stuffed with cheese), meatballs, pasta sauce and stuffed chicken. Traditional Italian tomato pizzas are made using flour and tomatoes from Italy and baked in a stone oven. The pizza is affordably priced—two extra-large, all-dressed pizzas sell for $26—and is a strong seller at the store. “We don’t cut corners,” Esposito says. “People are used to traditional grocery store pizza. That’s not what you get here!” The store also sets itself apart in the dried goods sections. Pasta choices include not only traditional brands but air-dried pasta and a wide range of imported brands from Italy at various price points. There are more than 60 types of olive oil, and balsamic vinegars aged six or 12 years. The beer section is stocked with a number of little-known Quebec microbrews (craft beers) that have proven to be popular sellers. “We want to have a

STORE PROFILE

store for everyone,” Esposito says of the decision to provide shoppers with as much choice as possible in each department. Product sampling is done on the weekend and a Découvertes/Scopertes (discoveries) section highlights products people might not normally try, such as olive oil from a small producer or balsamic beads. Since the store’s November opening, Esposito says sales have been steadily increasing every week and “our kitchen is doing phenomenally [well].” Customers in the primarily francophone neighbourhood who were previously unfamiliar with the Esposito banner have embraced the grocer, while the store has also attracted Montrealers who initially visited out of curiosity to check out the new concept but have kept coming back. Using Boisbriand as a template, Esposito aims to renovate the other outlets starting next year. The other stores are located in the Notre Dame de Grâce, St-Laurent and St-Michel areas of Montreal and Montréal-Nord. Plans also call for Esposito to open one new 15,000- to 20,000-sq.-ft. store annually for the next five years, with a focus on expansion on the north shore. “I’d like to be known as your go-to ethnic [store] for fresh quality products and Italian specialty goods,” Esposito says. A fresh juice bar will soon be added to the Boisbriand store and a click and pick-up pilot project is planned that will be extended storewide if the results are good. All Esposito stores welcome telephone orders and deliveries, although as Esposito notes, “today’s generation is not a phone-order generation.” While mom died a few years ago, 94-year-old Angelo Esposito is still going strong and visits the store on weekends. He’s given a thumbs-up to the transformation of the grocery business he founded. Dad is “very proud of it, very happy.” CG

The Facts Location:

Boisbriand, Quebec Number of employees:

Size:

15,000 sq. ft. Specialties:

Meals prepared in-house, Italian specialties, fresh foods at fair prices

The spirit of “mama” Esposito lives on in the the prepared food section that features her recipes

category close-up

dips

When the lazy hazy days of summer call for easy-to-prepare yet nutritious foods, dips are the perfect choice.

Nutritious, convenient and delicious – what more could you ask for?

A fresh, new look in the dip case

The dip category is constantly evolving. What are the latest innovations and product trends you’re seeing in dips?

Updated classic

The ever-growing selection of dips and spreads give consumers lots of options for meals and snacks throughout the day. We asked Kelly Freeman, marketing manager at Sabra Canada for her thoughts on this popular category.

The category is evolving based on what what we hear from customers. Our research shows that consumers want larger formats of hummus, hence the addition of our two new SKUs in 482 gram tubs for a total of four in our portfolio in Canada. Consumers are also asking for portability, so we’ve introduced Sabra Hummus Snackers with Pretzels and Sabra Guacamole Snackers with Tostitos. Consumers told us that they love our flavours but want to be able to take them with them for lunch, snacks and after-school carpool — it’s all about convenience. And, of course, we’re always listening to them to assist in developing new flavours like our just-launched Sweet & Smoky BBQ Hummus with Jackfruit and Smoked Paprika — a plant-forward choice that’s very on-trend.

What are some of the latest consumer trends driving ongoing sales in the dip category? Consumers care more about the quality of ingredients and the innate healthfulness of what we eat and, increasingly, people are prioritizing plant-based nourishment. They want delicious, healthy dips that they can enjoy for any occasion — whether they are having hummus as an appetizer or snack, during a meal or while entertaining. They want to understand the ingredients and are asking for transparency, which is a key factor in our clear label design. With a focus on choosing healthier options, we also know our consumers are shopping the perimeter of the grocery store, seeking hummus as a fresh, delicious choice.

Sabra, Canada’s fastest-growing brand of hummus has a new logo and redesigned packaging to shine a light on the fresh ingredients and bold flavours that get consumers’ mouths watering.

The iconic red rim and transparent top are unchanged but the new look enhances the natural ingredients in Sabra’s creamy hummus lineup.

A spicy kick Based on consumer demand, Supremely Spicy Hummus is now available in a larger 482 gram version, just in time for BBQ season.

Flavourful combo Sabra’s new label photography uses sunlight and a wooden cutting board to emphasize freshness of ingredients and real food appeal.

How can grocers improve dip sales? Can you provide some merchandising tips? Consumers like to come to the dips section, look down in the case, and see the beautiful toppings on display. It also helps for hummus to be merchandised close to fresh produce and other well-known carriers, such as fresh pita. During key seasons, entertaining displays also help to drive sales. We take pride in helping to rejuvenate the category — when Sabra sells, the whole category grows.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–MAY 2018

New limited edition Sabra’s newest freshtopped hummus comes with a topping of tender jackfruit and smoked paprika.

COVER STORY

T’S HARD TO WRAP YOUR HEAD AROUND the numbers: a staggering 1.3 billion tons of food— roughly one-third of all food produced for human consumption—never gets eaten. Around the globe, this amounts to about $1 trillion worth of food that gets tossed each year. And if you are under the illusion that Canadians, with their progressive environmental views, have a handle on the problem, think again. According to a new report from the Commission for Environmental Cooperation (CEC), Canadians are among the world’s biggest wasters. The Montreal-based agency found Canadians waste 396 kilograms (873 pounds) of food per capita annually. While food loss and waste occurs at every link of the supply chain, consumers are, by far, the biggest culprits. Figures vary on exactly how wasteful consumers are with some claiming they account for 51% of the problem. And the new CEC report reveals that of the 168 million tons of food wasted in North America, 67 million occurs at the consumer level. Still, it’s grocery stores that have the influence to take a big bite out of waste. Both the Anthony Bourdain-narrated documentary Wasted! The Story of Food Waste and the Center for Biological Diversity’s Checked Out report—which graded the 10 largest U.S. grocers on their efforts to lessen food waste—have recently called on supermarkets to step

By Shellee Fitzgerald Photography by Mike Ford

WALMART'S WAR ON WASTE The retail giant is “doubling down” on its efforts to stamp out waste in its operations and alleviate food insecurity, too

May 2018 Canadian Grocer

Lee Tappenden, president and CEO of Walmart Canada, says the retail giant is committed to improving operational efficiencies to prevent any food from ending up in landfills

COVER STORY

Walmart Canada’s Lee Tappenden with Kathleen McLaughlin, Walmart Inc.’s chief sustainability officer and president of the Walmart Foundation

up and play a bigger role in solving food waste and help address the issues wrapped up with it, such as squandered natural resources and food insecurity. “They [supermarkets] are the conduit between suppliers, the producers of food, and consumers, so they have a unique role and a unique opportunity,” says Martin Gooch, CEO of Oakville, Ont.-based Value Chain Management International (VCMI), the firm whose often-referenced 2014 report pegs the value of food waste in Canada at $31 billion. Walmart Canada is heeding the call. In a recent video created for its Canadian employees, Kathleen McLaughlin, Walmart Inc.’s chief sustainability officer and president of the Walmart Foundation (the company’s philanthropic arm), said: “As a large retailer, we have an opportunity to work upstream with suppliers, manufacturers, farmers and downstream with our customers to really get at food waste end to end.” In Canada, Walmart is ramping up its efforts around food waste. While the retail giant has had the aspirational target of zero waste to landfill since 2005, it recently renewed its sustainability targets and has now set a deadline of 2025 to achieve the goal. It’s no small thing. Food left to

May 2018 Canadian Grocer

rot in landfills releases methane, a potent greenhouse gas that’s more powerful than carbon dioxide. To put the problem in perspective, experts say globally if food waste were a country, it would be the third-biggest greenhouse gas emitter, trailing only the United States and China. So how does Walmart plan to get to zero food waste? Lee Tappenden, president and CEO of Walmart Canada, says the company is employing a three-part strategy—the first of which is to improve operational efficiencies to prevent any food from ending up in landfills. One practice Tappenden says is picking up traction in stores is a more “proactive” markdown policy in its dairy, meat and bakery departments. As part of the company’s Customer Value Program, products approaching their best-before dates are sold at reduced prices. It has also introduced what it calls its “$1/$2 bag program” where culled produce (bruised or nicked, but still edible) is put back on the sales floor in bags priced for a quick sale. While Tappenden admits the discounting initiatives are not exactly groundbreaking, they are resonating with customers and achieving the desired effect. Its fresh operations team, for instance, is reporting 90% to 95% sell-through on the $1/$2 bags. “It enables us to pass savings on to customers without having any product go to landfill,” he says. The company is also making improvements in its bakeries to allow for more accurate bakes to reduce overbaking. And in Western Canada it has announced plans to open a perishable distribution centre to get food into stores more quickly. Walmart has also implemented organic recycling programs at 338 of its stores and distribution centres so it can take unsold or unsaleable food and turn it into other products: animal feed, compost or energy, rather than shipping it off to landfill. The company is also investing in its staff (or “associates”) providing training and resources so they are better equipped to deal with fresh food and are minimizing waste. The retail giant’s waste-free journey has not been without a few stumbles. Back in 2016, CBC’s Marketplace news program made multiple visits to two Toronto-area stores and found dumpsters filled with packaged foods, many of which had yet to reach their expiry dates. The message was that Walmart was trashing perfectly good food. It was an embarrassing episode for the retailer, which had already made big commitments on curbing waste. At the time, the company said some mistakes were made and that it would do better. “We had plenty of programs and efforts already

in place at that point,” says Tappenden, adding that there are always challenges to be faced when operating stores. “But we’ve doubled down our efforts.” And the company says it managed to reduce food waste 23% between 2015 and 2017. “We have now in place a whole team across the country that wasn’t there before, our field associates that are trained specifically on fresh food. We’re getting much more consistency across all of our stores on how to handle fresh, which is a unique skill,” says Tappenden, noting that Walmart Canada is a relative newcomer in this area, only in the business of selling fresh food since 2006. When asked if the consumer’s desire for more fresh food and abundant choice in-store is slowing progress around waste, Tappenden said innovations and improvements are emerging to offset any challenges. “There’s a lot of innovative packaging, around meat especially, which improves freshness; and there’s a lot more than can be done there that enables us to offer more choice without increasing waste,” he says. “And I think we are genuinely getting more sophisticated in our whole supply chain. We’re getting better at demand planning, and it’s a small thing but we’re taking more and more promotions out of our fresh food area. The more we get to everyday low pricing and take out that volatility, helps a lot.” Aside from the moral argument for being less wasteful, there’s a strong business case to be made for reducing or eliminating food waste. VCMI’s Gooch says retailers—and certainly consumers— sometimes don’t grasp the true cost of wasted food. “They see [wasted] food and worry about X amount [of dollars] on face value,” he says. But they don’t see the costs that go along with waste, from disposal to handling, reconciling accounts and transporting the product through the supply chain. “All of those factors mean the true cost of food loss and waste is far greater than the face value of the food. It’s typical for it to be 3, 4, 5 times as much.” At Walmart, where the business model is all about driving efficiency, McLaughlin says the clear links between business benefit and societal benefit make the goal of zero waste a compelling one. “Having a more resilient food chain with better availability that follows better supply security—that’s good business.” USING ONE PROBLEM TO HELP SOLVE ANOTHER Despite our status as an affluent nation boasting a high standard of living, hunger remains a real problem. Food Banks Canada says more than 800,000 people need to use a food bank each month. And according to the 2017 Report Card on Child and Family Poverty in Canada, 1.2 million Canadians live in poverty with food insecurity an issue. Walmart sees hunger and food waste as two sides of the same coin, and the second part of its strategy to attack waste involves increasing donations to food banks. All of Walmart Canada’s 411 stores are now partnered with a food bank, something Tappenden

‘‘ ’’ We’re looking to provide a whole solution to reducing food waste in Canada, not just a solution to reduce food waste for Walmart Canada

says “is a really big deal” for the company. And new staff training has been implemented to maximize donations of unsold, edible food. In Canada, Walmart says its stores have donated more than 11 million pounds of food to food banks across the country.

THE BIGGER PICTURE To tackle the issue of waste beyond the company’s operations, the Walmart Foundation is donating $19 million in the form of a suite of grants to Canadian non-profits working to come up with innovative solutions to reduce waste all along the food chain. Projects range from those that champion whole crop utilization to those studying consumer behaviour. “It’s a big step forward for us in terms of actually trying to enable a solution end to end,” says McLaughlin. She adds that the grants will support everything from helping the Daily Bread Food Bank build up the infrastructure to collect and redistribute excess produce from up to a dozen farms and greenhouses in rural Ontario to helping the Greater Vancouver Food Bank Society scale up an enterprise that turns surplus produce into foods such as soups and sauces that will be distributed to people in need. The Foundation is also funding a project by the Canadian Centre for Food Integrity and Provision Coalition to work with 50 manufacturers across the country to conduct food loss and waste assessments and identify solutions. Food rescue group Second Harvest is another grant recipient. Its FoodRescue.ca online system, which allows businesses to donate surplus food, will get a nearly $2-million injection of funds. In addition, the Foundation is supporting an in-depth study into the causes of food waste. “We’re doing research with Second Harvest to look end-to-end in the chain and figure out where is the waste occurring and what is the practical roadmap for others to dive in and address it,” says McLaughlin. McLaughlin and Tappenden are both quick to emphasize that Walmart is not only willing, but is eager to share any of its learnings from these projects with the wider industry. “We would proactively share it with any other retailer,” says Tappenden. “That’s the whole point of this. We’re looking to provide a whole solution to reducing food waste in Canada, not just a solution to reduce food waste for Walmart Canada.” CG

May 2018 Canadian Grocer

Thank you Retail Council of Canada for encouraging new product innovation in Canada

for 25 years!

from your friends at

GRAND PRIX FINALISTS

A total of 119 products have landed on the list of finalists for the Retail Council of Canada’s (RCC) 2017 Canadian Grand Prix New Product Awards

Meet the

CONTENDERS THE AWARDS, which are marking their 25th anniversary,

celebrate the best new branded and private-label products launched in Canada in 2017, as determined by a 27-member jury of industry experts. “Canadians are craving genuine newness,”says RCC president and CEO Diane J. Brisebois, adding that companies have delivered. According to RCC, submissions for the competition saw a 20% uptick in 2017. Vegan mayonnaise, cold brew coffee and gluten-free cookie dough are among the innovative products making the shortlist this year—check them all out on the pages that follow. (And look out for the list of winners in our August issue!)

A. Lassonde Inc. | Oasis Infusion Infused with herbs, flowers and fruit, this refreshing water-based beverage is slightly sweetened with fruit juice. Available in three flavours: Cucumber-Lime-Mint, Strawberry-Hibiscus-Basil and Tangerine-Lemon-Thyme.

Food AB World Foods | Patak’s 3 Step Curry in a hurry? No problem. With these handy sauce kits (available in Korma and Butter Chicken), home cooks just need to add veggies, protein and complete three simple steps for an authentic-tasting Indian meal.

Arla Foods | Castello Double Crème White A soft, white mold (brie-type) cheese with a creamy texture and complex taste. Unlike other soft cheeses, Castello Double Crème matures from the inside out to ensure a velvety texture.

May 2018 Canadian Grocer

GRAND PRIX FINALISTS Cavendish Farms | Cavendish Farms FlavourCrisp Oven Chips

Dole Foods of Canada | Dole Resealable Fruit Pouch For cut fruit fans, Dole has conveniently placed two popular varieties in convenient, resealable pouches. Pineapple Chunks and Sliced Peaches are packed with fruit juice in these 382-mL fridge packs.

An alternative to plain-old fries, these oven chips are crisp and perfectly seasoned. They can be easily dipped or loaded up with toppings.

Conagra Brands | Hunt’s Heirloom Tomatoes These tomatoes are vine ripened in openair fields and picked during the early weeks of harvest. Grown entirely in Canada, they are Non-GMO Project Verified.

Earth’s Own Food Company | SoFresh Oat Plant-based alternatives to milk are all the rage and Earth’s Own has added an oat option to its lineup. Made with 100% Canadian whole grain gluten-free oats.

Hain-Celestial Brands | Tilda Lime & Cilantro Basmati Rice The zest of fragrant limes, coriander leaf and smooth coconut cream give a hint of Thai cuisine to this readyto-heat rice. Made with natural ingredients, this aromatic rice is quick and easy to prepare.

High Liner Foods | Can’t Mess it up! Wild Pink Salmon

Finica Foods | Lenberg Farms cheese These truckles (small barrel-shaped cheeses) are younger versions of Lenberg Farms’ award-winning cheeses (Lindsay Bandage Cheddar, Tania and Zoey). Each has its own distinct flavour, and all are inspired by Dutch names: Luuk, Taavi and Zander.

May 2018 Canadian Grocer

Foolproof fish! From High Liner comes this product featuring a patentpending reverse sous vide technology that cooks the responsibly-sourced salmon “from frozen to perfection” in just 10 minutes. Comes in BPAfree plastic packaging.

mindful hydration � naturally alkaline spring water � organic flavours � pure taste � eco-friendly pack � no sugar, no juice, no calories, no preservatives and no GMOs

flowhydration.com

Flow Naturally Alkaline Spring Water now comes in two new organic flavours: strawberry + rose and watermelon + lime. They join the rest of the Flow family including cucumber + mint and lemon + ginger. Each flavour is designed to be deliciously drinkable while still maintaining the healthful benefits of original Flow (pH of 8.1).

GRAND PRIX FINALISTS Kraft Heinz Canada | Philadelphia Whipped Bold For those who want a more audacious cream cheese. Philadelphia Whipped Bold is light and creamy with amped up flavours including Jalapeno Cheddar, Cracked Pepper & Garlic, and Creamy Sriracha.

Naturally Homegrown Foods | Hardbite Chips

Kicking Horse Coffee | Kicking Horse Coffee Cold Brew Deep, dark and delicious, this unsweetened cold brew coffee is made from organic coffee beans roasted in the Rocky Mountains and steeped for 20 hours.

The makers of Hardbite are pretty picky about what goes into their chips—that’s why they’re free from GMOs, are gluten free and contain nothing artificial. New flavours to the lineup include Avocado & Lime and Sweet Spud of Mine.

Lamontagne Chocolate | Lamontagne Collection These crunchy roasted almonds are coated in layers of chocolate along with aromatic coffee brittles (Caffe Latte variety) or crispy coconut flakes (Coconut Almond variety).

May 2018 Canadian Grocer

Heartland Food Products Group | Splenda Stevia No Calorie Sweetener Jan K Overweel | Duero Fruit Jelly & Cheese Jewels Under the Kilt | Maple Roasted Nuts Kraft Heinz Canada | McCafé Premium Roast 100% Compostable Pods

THINKing OUTSIDE THE CAN!

Fresh tasting fruit now in a resealable stand up pouch www.dolecanada.ca

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A Cheese to Please

69636 Make sure you have Lenberg Farms in your dairy case

rint Size 00% | PDF Size 100%

evision: 0

Date:inApril 18,wax 2018and embellished with a brightly coloured Released: Hand dipped black label Lenbergs cheese is beautifully merchandised and sure to stand out Printer: Canadian Grocer to consumers, not only in appearance but also with its unique taste!4 Printing Stations + Finishing/Coatin 77 City Centre Drive, West Tower 2nd Floor Mississauga, ON L4Y 4C5, Canada 905 270 2501 1 877 519 2501 davisdesign.ca

ient: Dole ontact: Livio Ghizzardi

rector: Linda McGregor anager: Debbie Piché esign: Paul oduction: Jackie maging: Pam, Jackie

Job Code: DOL 69636 Project Name: Dole Canadian Grocer Job Description: Retailer Ad English File Name: 69636p_Dole_CdnGrocer_HalfPg_HorizEng1.ai Software/Version: Adobe Illustrator CC Fonts: Museo Sans family, Helvetica 57 Condensed, Avenir Book, Brandon Printed One.

Print Method: N/A Prepress: N/A Dieline Date: N/A Dieline: 7 7/8” x 5 3/8” CC#: N/A

PLEASE READ PRIOR TO FINAL PRODUCTION

Process Cyan

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Process Yellow

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Match with Process Colours PANTONE® Reflex Blue

Special instructions to pre-press… White

Dole Red

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EASE CHECK CAREFULLY Although every effort is made to ensure that this artwork is correct, errors and omissions do occur. Davis does not assume liability beyond the corrections needed. OTE: Font software or images which may accompany this artwork are intended solely to facilitate outputting the attached artwork files. Fonts/images are used under license; we do not have the authority to grant a transfer of ownership or subl d no such transfer or sublicense is effected hereby. In the event of any modification, the receiving party is required to possess its own license to effect same and any use of the fonts/images outside of a license from the owner is at your ow

www.finica.com

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

Twinings of London | Twinings Exotic Mango and Ginger Green Tea To achieve this fragrant blend, Twinings’ master blenders have paired mango pieces with ginger, over a base of green tea. The effect, its makers say, “is delicious, refreshing, even a little surprising.”

Mars Inc. | M&M Caramel Milk Chocolate Candies Nestlé Canada | Aero Dark Cherry Truffle Tablet

Carlton Cards | Chairs to you

Olivieri Foods | Skillet Gnocchi

Designed to celebrate Dad, this greeting card collection features colourful, mini displayable lawn chairs that fold out to deliver hilarious “bouncing ballads.”

Unilever | Hellmann’s Vegan Made with soybean oil, Hellmann’s Vegan contains no eggs, no cholesterol, no genetically-engineered ingredients and is certified vegan by Vegan Action.

St-Hubert | Smoked Meat Tourtiere Terra Beata Farms | Refrigerated NFC Juice Cocktail, 1.75L Terra Beata Farms | 40% less sugar whole dried Cranberries

Non-Food

Three Farmers Products | Three Farmers Pea Pops

Baby Gourmet Foods Inc. | Baby Gourmet Shakers Nutritional Beverage

ThreeWorks Snacks | ThreeWorks Apple Chips Crinkle Crunch

Cascades Tissue Group | Cascades Fluff

Traditional Medicinals | Stress Soother

Hain-Celestial Canada | Jason Dry Spray Deodorant

Unilever | Knorr Selects Viau Foods Ltd. | Thin Sliced Salametti

May 2018 Canadian Grocer

Namëna Biosciences | IGNITE-SX

Sunstar Americas Inc. (Canada) | Gum Flossers Carlton Cards | Sweet Eats Hallmark Canada | Star Wars Collection Jedi Master Set Hallmark Canada | Stained Glass Shadowbox

GRAND PRIX FINALISTS

Private Label FOOD

• Co-op Gold Perogies • Co-op Gold PURE Smoked Steelhead • Co-op Gold PURE Cold Pressed Juice • Co-op Gold PURE Mustard • Co-op Gold Cookies

• Irresistibles Chips • Irresistibles Chewy Cookies • Irresistibles Vinegar and Maple Syrup • Irresistibles Ice Cream • Irresistibles Pie • Irresistibles Baked Deep Dish Pie, 1-kg • Juice Blend • Irresistibles Organics Chicken

Longo’s

Rexall

Chicken Breast Chunks • Sensations by Compliments Milk & Dark Chocolate Almond Dates • Compliments Gluten Free Cookie Dough • Sensations by Compliments Cold Brew Coffee • Compliments Naturally Simple Seed and Ancient Grain Blend • Compliments Naturally Simple Veggie Burgers

• Longo’s Signature Muffuletta • Longo’s Signature Italian Filone Loaf

• Nosh & Co. Premium Arti sanal Shortbread Cookies

Walmart Canada

PetSmart Canada

• Our Finest Festive Collection Naturally Flavoured Coffee K-Cup pods • Great Value Pretzel Coated Chicken Fingers

• Beaver Canoe Apparel

Federated Co-operatives Ltd.

Save-On-Foods

Metro Brands, g.p. • Irresistibles Naturalia Tourtière • Irresistibles Organics Lactose-Free Cheese • Irresistibles Maple Syrup • Irresistibles Fully Cooked Drumstick Style Pork Shank, Korean

• Western Family Salad Kits • Western Family Organic Kombucha • Western Family Fully Cooked Smokies

• NOMA Advanced Constant-Lit C6 LED Christmas String Lights • Yardworks 12A Leaf Blower/ Vacuum with AeroForce Technology

Metro Brands, g.p. • Irresistibles Dog Treats

Mondou • Vetdiet Dental Chews • Vetdiet Dog Snacks

Rexall • Kit 3 in 1 Sponge

Walmart Canada

NON-FOOD

• Special Kitty scoopable multi cat tight clumping cat litter • Parent’s Choice Diaper Pail Refills • Equate Whey Protein Powder

CTea

Sobeys

Canadian Tire Corporation

• Compliments Naturally Sim ple Ancient Grain-Coated

• Canvas Marseille Fireplace • Canadian Signature Fry Pan

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EMERGING SUSTAINABILITY LEADERS TACKLE CLIMATE CHANGE Last year, Kruger Products and Canadian Grocer’s Leaders in Sustainable Thinking brought together the industry’s emerging talent to answer the question, “how do we decarbonize the retail value chain by 2040?” Attendees worked in teams to develop creative solutions and identify opportunities for the CPG and retail industry.

This year, we brought many of these emerging professionals back, and integrated seasoned sustainability leaders to take the 2017 ideas even further. This day-long collaboration led to new relationships, innovative thinking, and a top ten list of ways the CPG industry can collaborate to reduce emissions in the retail value chain.

READ ON TO LEARN MORE ABOUT THE LIST GENERATED BY PARTICIPANTS AT THIS YEAR’S EVENT.

FEATURE

COMING TOGETHER ON CARBON EMISSIONS

What’s the best way to decarbonize the retail value chain? Collaboration is a good start

GETTY IMAGES/LONGQUATTRO

By Carol Neshevich Photography by Roger Yip

a bright and early morning in late February, about 25 thought leaders from the retail industry and beyond gathered in Toronto to dive into the topic of sustainability. Their goal: to figure out collaborative ways to reduce carbon emissions across the retail value chain. “We want to talk about a vision for the sector. We want to talk about the pressures that we’re facing, and the fact that you can’t solve them alone,” said Ted Ferguson, president of The Delphi Group, a consultancy that helped organize and facilitate the 2018 Leaders in Sustainable Thinking event, which has been presented by Kruger Products and Canadian Grocer annually since 2012.

Among the companies participating were Loblaw, Metro, Sobeys, Canadian Tire, Walmart Canada, HBC, Maple Leaf Foods and Unilever. Last year, the sustainability event took on an unconventional “hackathon” format, and attendees at this year’s conference were asked to continue building on the decarbonizing ideas generated at the hackathon. Promoting collaboration was also key. “There’s a program for today, there’s an agenda, but it’s just as much about making connections—and the ideal is that you might meet someone here today and go for coffee, and that might lead to some interesting initiative that you collaborate on together beyond this room,” said Steven Sage, vice-president of sustainability and innovation for Kruger Products. May 2018 Canadian Grocer

2 4

1. The Delphi Group’s Ingrid Hoffmann 2. Compass Canada’s Jana Vodicka addresses the group 3. Vanessa Bauer of Metro Inc. 4. Tetra Pak’s Isabelle Faucher and Alex Kjorven of Purpose Capital 5. The Delphi Group’s Ted Ferguson 6. Brainstorming session

PART 1: MOTIVATION AND INSPIRATION To motivate the group, Ted Graham, head of Open Innovation at General Motors (GM), kicked things off with an inspiring keynote speech. “Ted Graham was a logical choice to get us in the space where we can imagine change and be a little more comfortable with disruption,” said Delphi’s Ferguson in his introduction of the speaker. “If we’re going to decarbonize this sector and reduce the negative impact of this sector on the climate, we have to do some pretty dramatic things.” Prior to his role at GM, Graham was innovation leader at PricewaterhouseCoopers (PwC). During his time at PwC he undertook an off-the-wall experiment that inspired many new ideas for the corporation: he became an UberX driver for a year (while simultaneously working at PwC) in an effort to understand the impact of digital disruption first hand. In his talk, Graham described the lessons he took from this experience. “I was very curious about what I could learn from this and what it was going to mean for disruptive change in a number of industries,” he said. The first learning, he said, was the idea of working with inde-

May 2018 Canadian Grocer

pendent contractors as “partners” of the business. He was able to take this back to PwC and apply it to how the company worked with seasonal accounting staff. Another lesson was about two-way feedback with consequences. Customers can rate their Uber drivers, of course, but drivers can also rate their customers. This idea led to PwC collecting feedback from employees about their clients. “I think it was really helpful for us because, frankly, there are times when we need to fire a few of our clients,” he said. A third lesson was around balancing risk versus reward—something fundamental to Uber drivers (who must balance the risk of using their own cars, for example, with the reward of setting their own hours). Graham said he found numerous applications for this idea at PwC. Graham also talked about his current work with GM, including research around self-driving cars and electric vehicles, both of which could have an impact on the retail value chain. “Our autonomous vehicles in the future will be electric vehicles,” he added. Graham tied his talk back to the theme of collaboration when discussing transportation innovations, sharing a question he asks often: “How can I look to other

FEATURE 3

How to collaborate on decarbonization? 10 key ideas were floated at the event: 1 Joint business planning: Vendors and suppliers could set out joint emission reduction targets at the beginning of the year through existing joint business planning meetings. Companies can explore ways to share the savings that occur as the result of these strategies to incentivize change across the value chain.

2 Carbon risk assessment for products: To complete a carbon risk assessment, industry standards can be developed for the assessment process. Once assessments are an industry norm, they can provide data on highcarbon hotspots to be targeted for emission reduction strategies.

3 Forecasting emissions: We can 6

people to help us innovate and actually achieve at a higher impact than we could on our own?” PART 2: BUILDING ON THE HACKATHON In the second part of the day, attendees were divided into groups to build upon the ideas generated at the Sustainability Hackathon last fall. At the hackathon, small groups of “future leaders” were tasked with creating a plan for decarbonizing the retail value chain by 2040. Their solutions fell into the following categories: packaging, plant-based foods, customer experience, transportation, data analysis, and lastly, “Aisle 6 Labs,” an idea for a retail sustainability innovation centre. Each group at this year’s event was assigned one of the hackathon ideas to explore further. For example, the group discussing plant-based eating came up with innovative ways to promote a plant-based diet, including AR (augmented reality) technology applications that customers could use in store to learn more about the food they are buying in a fun, tech-forward way. And the table discussing “Aisle 6 Labs” proposed that the test store/lab could either be spearheaded by a major retailer, a retailer in

leverage existing carbon and energy inventories to match with business planning and create a forecast of emissions. With that forecast, we can look critically for ways to avoid emissions in the future.

4 Reduce packaging: A significant role that packaging plays is to market the product within it. If this marketing were placed elsewhere, such as the store shelving, packaging could become smaller and less complex. Reduced packaging would make it easier to fit more products in commercial vehicles, reducing transportation emissions. 5 Data sharing: Companies often lack complete data on the life cycle impacts of their products, which makes it challenging to make informed emission reduction decisions. Increased sharing of this information between companies would allow everyone to make more informed choices.

6 Align incentives throughout the supply chain: Decision makers within the retail value chain sometimes are not impacted by

incentives to reduce emissions. For example, a retailer may receive the eco-fee that they charge customers for environmentally friendly products, but they may not actually be responsible for managing the end-of-life of that product. We could work with relevant authorities to better align incentives for reduced carbon and energy use.

7 Leverage new tech—cut costs and carbon emissions: Tools already exist that can tell drivers how efficiently they are driving. Using these technologies and creating positive incentives around faster delivery times can reduce supply chain emissions. Sensor, GPS and tracking information can be leveraged to find ways to reduce emissions and costs.

8 Boost consumer engage ment: Consumers don’t consistently demand products and services that are environmentally friendly with a low-carbon impact. Retailers can collaborate to present consumers with consistent messaging/communication about the environmental impact of their choices. Engaging the consumer needs to be shared by the product manufacturers and the retailer.

9 Issue an RFS (Request for Solutions): Create opportunities to innovate and build an environment that promotes sharing of intellectual property around reducing carbon to improve the sector overall. For example, issue a request for solutions (RFS) for emission reduction opportunities within the industry.

10 Create a business case for collaboration: Use existing venues of collaboration to work together on issues like emission reductions. Set industry wide targets to galvanize the sector to work towards a common goal. Align communication across retailers with suppliers, so they are receiving consistent messaging about environmental goals and priorities. May 2018 Canadian Grocer

FEATURE

8 7

7. A lively discussion at table number three 8. Steven Sage of Kruger Products 9. GM’s head of Open Innovation, Ted Graham, gives an inspiring keynote speech 10. Jessica Krasin of Kruger Products

conjunction with startups and/or a university, or it could even be run completely by a major technology company. “It was a pretty wild idea, so it can be taken in a million different ways, but the concept is really interesting,” said Alexandra Eakins, corporate sustainability specialist for Sobeys. PART 3: COLLABORATIVE SOLUTIONS TO REDUCE EMISSIONS The third part of the day focused on what large companies such as Loblaw, Walmart Canada, IKEA, Nestlé, HP and Unilever are doing to reduce emissions in the areas of transportation, energy and sustainable products. Each group then embarked on a brainstorming session, with the end goal being to come up with solutions prioritizing not only decarbonization, but also—and maybe even more importantly—collaboration. “Our idea for reducing emissions from energy in the retail value chain was through joint business planning,” explained Whitney McWade, sustainability reporting manager at Canadian Tire. So when vendors and retailers are already getting together to set sales goals, they could also set goals for sustainability at the same time.

May 2018 Canadian Grocer

Some groups discussed solutions involving better sharing of data, while others looked at putting a greater emphasis on forecasting and careful planning to reduce emissions. “There’s one component that I don’t think anybody else mentioned, and that would be more investment in research and development to get better products out there,” said Pete Skubna, who works in sustainability/environmental programs and services at Staples. Jinie Choi, senior manager of sustainability at HBC, elaborated: “Whether that be in packaging, materials, or even raw materials themselves to make the products, there are a lot of new technologies coming out. If there’s more industry collaboration ... perhaps there’s more opportunity for more innovative products.” As the day wrapped up, Kruger’s Sage had some final hopeful words: “I hope that some of the things we talked about at the beginning of the day [came to fruition] in terms of making connections and challenging some of your thinking,” he said. “I hope there were some different points of view you can take back and, in the best case, I hope you can partner with someone you might have met today for further discussion.” CG

Sustainability 2020

Actions Delivering Results Kruger Products is committed to its multi-year journey to reduce its environmental footprint while improving the health and safety of its employees. Our Sustainability 2020 initiative focuses on four key targets towards achieving this objective.

Our progress to date:

REACHED

59%

REACHED

85%

OF OUR 2020 GOAL*

TO REDUCE ENERGY USE** BY -15%

REACHED

TO REDUCE EMISSIONS** BY -27%

80%

OF OUR 2020 GOAL* REACHED

56%

TO REDUCE WATER USE** BY -35%

OF OUR 2020 GOAL* TO IMPROVE EMPLOYEE SAFETY† BY +50%

For more on our continuing efforts, visit krugerproducts.ca/sustainability

*As of December 31, 2017 **Intensity-based since 2009 †Since 2015 © 2018, ® Registered and ™ Trademark of Kruger Products L.P. ® Earth Day Canada used under license. ® Forest Stewardship Council and FSC Logo – Forest Stewardship Council, A.C.

AISLES

Products, store ops, customers, trends

FUNCTIONAL BEVERAGES

As consumers look for an extra hit of nutrition and functionality, functional beverages are booming By Anna Sharratt 44

May 2018 Canadian Grocer

t Pete’s Frootique in Halifax, the front beverage cooler is stocked with a bevy of functional beverages. There’s carbonated tea made by a local producer, numerous lines of coconut water, watermelon water, vitamin waters, cold brews (cold coffees) and kombucha, by far the biggest seller. “It’s crazy how that trend has exploded,” says Frank Yunace, operations manager at Pete’s. “Kombucha outsells the bottled water.” Yunace’s experience isn’t unique.

Across Canada, grocers are watching the functional beverage market grow exponentially—with some products like kombucha surging in sales. They’re tapping into the trend of consumers looking for healthy, nutrient-filled drinks that are easy to access, act as a vitamin-packed “meal,” and make them feel good about themselves. “There’s been explosive growth over the past couple of years,” says Jo-Ann McArthur, founding partner and president at Nourish Food Marketing in Toronto.

SHUTTERSTOCK/MARIYANA M

Drinks with benefits

In 2016, the Canadian functional beverage market had $1.4 billion in sales—a figure that’s expected to reach $1.6 billion in 2021, according to Euromonitor International. And according to Mintel’s figures, 14% of Canadians say they drink “hybrid/fusion drinks” on a typical day. That means these beverages are now popping up everywhere. “You’ll see them at the checkout sections of convenience stores now,” says McArthur. NATURAL = GOOD FOR YOU Consumers ranked “functional” as fourth in importance among a list of key characteristics of the food they’re buying, according to Mintel. Joel Gregoire, associate director of food and drink at Mintel in Toronto, says consumers want that extra hit of protein, vitamin or energy to get through their day. Part of the appeal of functional beverages is that they tap into the societal shift towards all things natural, says Gregoire. He says there’s a clear movement away from old-school sodas, which are high in calories and sugar, towards drinks with all-natural ingredients that are sourced ethically or produced locally. In particular, these beverages have attracted the attention of socially conscious millennials who are prepared to part with their disposable income on a $4 bottle of kombucha. “We tend to see that younger consumers have an interest in functional beverages,” says Gregoire. Yunace adds that younger consumers are savvy about all things health. “Millennials are very knowledgeable about products—they’re dialled in.” Social media also plays a big part with this demographic, he says, as younger consumers want to feel like they’re not only consuming a healthy product, they’re also making a positive impact socially. The new packaging on these functional drinks is hip and environmentally friendly—and often includes hashtags. “The thinking among millennials,” says Ron Szekely, vice-president of marketing at Montreal-based Rise Kombucha, is that “by taking care of themselves, they are able to better take care of the world.” QUICK HITS Functional beverages can also fill the holes in one’s diet, and can do it at an affordable price. Many of the heartier beverages—such as smoothies, cold-

pressed juices or coffee-infused drinks— can act as a meal replacement, making them popular with the younger set who can spend $5 and get a lunch out of it, says McArthur. Millennials don’t want to waste time; they want something quick and convenient. “We’ve turned into a generation of snackers,” she says. “And a functional beverage is faster to consume than a functional food.” At the other end of the spectrum are the baby boomers, a generation that’s laser-focused on health. They want to ensure they’re making their calories count, says Yunace. This demographic is also looking for a hit of energy to get themselves through the day—whether it’s a protein-enhanced smoothie, a bulletproof coffee (with coconut oil) or a tea-infused drink. Some, too, are using functional beverages to relax. McArthur says some functional beverages now promote relaxation, boasting ingredients such as lavender and lemon balm. Then there’s kombucha, which promises to regulate digestive health and improve energy levels. “It’s something that’s been growing 20% year over year,” says Szekely, adding that it’s popular among adults of all ages. The kombucha market increased nearly 41% to reach $534 million wholesale last year, finds a report from the New York-based Beverage Marketing Corporation. “Sugary juice and pop drinkers discover kombucha as a low-sugar alternative,” says Szekely. “Across the U.S. and Canada, it’s becoming more mainstream.” “The primary demographic still does tend to be in the 20 to 40 age range,” adds Dane Robertson, a spokesperson for Greens Organic + Natural Market in Vancouver, noting that women are more likely to drink kombucha. HOW GROCERS ARE ADAPTING Grocery chains across Canada are waking up to the revenue opportunities functional beverages offer. At grocery stores catering to middle-class or higher-income shoppers especially, coolers filled with functional beverages are often on display close to the store entrance. Yunace says his beverage cooler is de signed for a grab-and-go crowd. And at a Longo’s location in Toronto’s east end, each check-out aisle has a beverage cooler stocking vitamin waters, cold coffees and kombucha.

Yunace says grocers have to keep on top of the ever-changing functional beverage industry. “We try to keep one ear to the ground—we watch these trends,” he says, adding that each department manager does all the purchasing for their respective section, allowing them to track and adapt to trends. “You have to be nimble to survive in this business,” he says. With the massive popularity of functional beverages, big manufacturers like Nestlé, Coca-Cola and PepsiCo are getting in on the action, investing in and acquiring smaller beverage firms. In 2016, for instance, Coca-Cola obtained a minority equity stake in Aloe Gloe, a line of organic aloe-water beverages, and PepsiCo acquired KeVita, a maker of sparkling probiotic beverages. The larger players are also modifying their existing products. Yunace says he’s seen the big players such as Coca-Cola, PepsiCo and Ocean Spray change their language on beverage packaging to tout health benefits, list more natural ingredients, promote less sugar and feature larger images of fruit. WHAT’S NEXT? Grocers will see no shortage of functional beverages hitting their shelves in the next while. Allison Phelps, a spokesperson for Whole Foods in Chicago, says kombucha has “opened doors for a variety of diverse beverages to come into the market, like probiotic-enhanced juices, sparkling tonics with herbal adaptogens and apple cider vinegar-based teas.” Phelps says powders like matcha, maca root and cacao are becoming more popular because they’re so easy to incorporate. “They’ve found their way into lattés, smoothies, nutrition bars, soups and baked goods,” says Phelps. She adds that another ingredient showing up in beverages is functional mushrooms such as reishi, chaga, cordyceps and lion’s mane. McArthur has also seen a dramatic pick-up in liquid concentrates that, when added to water, can replace lost electrolytes after a workout. “It’s an innovative way to combine convenience and customization,” says McArthur. What’s up next for functional drinks? A lot more growth, experts concur. In the meantime, grocers would be wise to pay close attention to this market segment. “Retailers have to be sensitive to these trends,” says Szekely. May 2018 Canadian Grocer

cauliflower

Power

Founder and CEO Gail Becker explains how CAULIPOWER revolutionized frozen pizza in the US and is now ready to do the same in Canada. and we listened. We even set up our manufacturing plant in Ontario so that our products could be locally made.

California-based CAULIPOWER has become the fastest-growing frozen pizza brand in the US. Now, by popular demand, CAULIPOWER products are not just launching in Canada, but are also made in Canada. Why is cauliflower the star ingredient in all your products? As the mom of two boys who were diagnosed with celiac disease at a young age, I had a pretty good perch from which to watch the gluten-free industry evolve and, suffice it to say, I didn’t always like what I saw in terms of ingredients. I tried making my own cauliflower crust, but 90 minutes was just way too long to spend making a pizza crust! I looked for a pre-made one in retail and when I couldn’t find it, I decided to quit my corporate job and start CAULIPOWER. We launched four SKUs — three topped and one plain crust — in 30 Whole Foods stores in the US and the stores sold out within hours. Today we are in 9,000 retailers across the U.S., ranging from high-end to mass-market grocers….and growing. You’ve just launched four of your pizza products in Canada. Why now? I was at Expo West last year and was stunned by the amount of Canadian interest from retailers and distributors. We have also been inundated by consumers in Canada via social media and email wanting our products. So, basically, Canada spoke up

Are your pizzas gaining popularity beyond allergy-conscious consumers? The gluten-free consumer is certainly a large market for us, but the base of our customers don’t buy our pizza for that reason. People love our pizzas because it’s a delicious, better-for-you option that everyone can feel good about eating or serving to their kids. No matter the dietary restrictions, CAULIPOWER allows all of us to share from the same plate once again. Any tips for retailers on how to promote your products? What we discovered from our US retailers is that our brand can play in the ‘better-for-you’ section of the freezer, as well as with the more traditional frozen pizzas. It’s also something customers ask for from retailers, so it’s a matter of listening to what your customers need. What’s on the horizon for CAULIPOWER? We will continue to listen to our customers and deliver on the promise we first made in launching our brand: quality first, innovation always and a focus on bringing things to market that consumers haven’t had the opportunity to experience before. We’re obviously filling a gap and that feels great. We are hopeful and confident that all of our Canadian retailers — and fans — will feel the same.

SPECIAL PROMOTIONAL FEATURE IN CANADIAN GROCER–MAY 2018

AISLES

Amy's Kitchen's Quinoa and Black Beans with Butternut Squash and Chard

FROZEN MEALS

Not your grandfather’s TV dinner The new generation of high-end frozen meals is a big hit in the freezer aisle

COURTESY AMY’S KITCHEN

By Lara Brighton Chef-created. Wholesome. Preservative free. Hormone free. Non-GMO. Vegan. Gluten free. No, we’re not talking about the trendy new organic bowl bar down the street; we’re talking about the new generation of frozen meals—and these are definitely not your grandfather’s oldschool TV dinners. The frozen food market is heating up these days as consumers flock to the freezer section to buy high-end frozen meals offering great taste, high-quality nutrition and, of course, convenience. Why the renewed interest in frozen? Food industry experts point to new technologies in frozen food preservation, reformulated products and new health-conscious offerings, coupled with the growing need for convenience in the lives of today’s busy millennials, who are hitting their stride financially while also finding themselves feeding growing families. “In the last year, frozen dinner/entrees have seen their dollar sales increase by 3% over the previous year,” says Isabel

Morales, manager of consumer insights at Nielsen, noting that these sales rose in Canada from $1.64 billion to $1.69 billion in the latest 52 weeks ending March 3, 2018. “As families are strapped for time, family-size frozen meals are exceeding the growth of single-serve portions (4% vs. 1%). Frozen dinners are a simple and convenient solution that can be kept on hand without the need for planning.” U.S.-based food and consumer analyst Phil Lempert of Supermarketguru.com suggests the recent trend toward higher frozen food sales is also a direct result of innovative food preservation technologies such as flash freezing, which “allows for the creation of frozen food items without extra additives like sodium, sugar, preservatives and colourings.” Taste, of course, is also a factor. “Manufacturers are focusing on better sauces, better quality ingredients, and more inventive recipes. This is what has brought people back to frozen food,” he says. Brad McMullen, owner of Toronto’s

Summerhill Market, has seen a notable increase in frozen food sales at all of his locations. “What makes frozen meals gourmet tasting and high-end is really just about using wholesome, natural ingredients,” he says. “It’s also about what you don’t put in—additives like preservatives and artificial flavourings.” The high-end frozen meals on the market today also offer options that meet dietary and lifestyle needs such as nonGMO, gluten free, dairy free and vegan. Sarah Dobec, marketing manager for Toronto natural food market The Big Carrot, says the store sells a high volume of pastas, pizzas and burritos on offer from frozen foods brand Amy’s Kitchen. “People want to eat fresh but don’t want to cook,” she says. “Healthy frozen meals are a gateway for people improving their diets.” The growing demand for healthier, high-end frozen meals has also seen the rise of companies such as Luvo, the forward-thinking Vancouver-based frozen food manufacturer that has developed “chef-created, nutritionist-approved,” globally inspired frozen meals using higher-quality ingredients, full servings of fruits and vegetables, non-GMO items, antibiotic-free meats, small-batch cooking and flash freezing. Examples of Luvo meals include such fancy fare as Red Wine Braised Beef and Polenta, Quinoa and Veggie Enchilada Verde, and Tandoori-inspired Spiced Chicken. Kraft Heinz has also thrown its hat into the high-end frozen meals ring, recently unveiling a new line called Crave. This product line uses no artificial colours, flavours or sweeteners, and has 20 to 30 grams of protein in every meal. Examples of Crave’s gourmet-style entrees include White Cheddar Macaroni and Cheese with Bacon, Creamy Chicken Enchiladas, and Sweet & Tangy Pulled Pork with Spicy Sweet Potatoes. “Crave offers a great taste and flavour experience in frozen that consumers don’t always expect,” says Av Maharaj, vice-president of corporate and legal affairs at Kraft Heinz. Consumer demand for high-end frozen meals has been steadily growing, and the trend is only expected to increase. Grocers ought to ready themselves by making room in their freezer section for the high-end frozen fare that today’s taste-savvy, health-conscious and busy consumer wants. CG May 2018 Canadian Grocer

AISLES

Vegan snack attack Vegan foods appear to be booming—even among those who haven’t strictly sworn off animal products—thanks to growing consumer concerns over their own health and the planet’s. The snack category is no exception. From vegan jerky to crunchy bean chips, here are just a few trendy vegan snacks filling grocery shelves: LOUISVILLE VEGAN JERKY CO.

VEGAN ROB’S Known for its wide array of innovative vegan snack foods, from Jackfruit Puffs to Asparagus Chips, New York-based Vegan Rob’s has now introduced Kombuchabars to its product lineup. Kombuchabars bring the soaring popularity of kombucha beverages to the snack food world, in flavours such as Cranberry, Banana, Blueberry and Dark Cacao. And just like the beverage, Kombuchabars provide a probiotic boost.

With flavours and packaging inspired by the Kentucky city where it’s made, Louisville Vegan Jerky offers a tasty snack for jerky lovers who don’t want to eat meat. And to add an element of hipster coolness, each flavour is named for a well-known Louisville historical figure: Pete’s Smoked Black Pepper is named for 1880s Louisville baseball legend Pete Browning, while Enid’s Sriracha Maple was named for renowned Louisville sculptor Enid Yandell.

ROOBAR Touted by its makers as “an organic raw superfood bar,” this hip Bulgarian brand is sold on four continents and counting. Roobar’s fun and functional flavours include Chia & Coconut, Goji Berry, Maca & Cranberry, and Baobab & Ginger; and each Roobar is made with only four or five ingredients including superfoods, dried fruits and nuts. These bars are also organic and vegan, and contain no added sugar or gluten.

HIPPIE SNACKS BEANFIELDS SNACKS Move aside, potato chips— Beanfields Bean Chips offer that flavourful chip crunch but with an added beanpowered boost of fibre and protein. These bean chips are all gluten free, Non-GMO Project Verified, kosher, allergy friendly and, of course, vegan. And while there’s a wide array of flavours available, the California-based company notes that its three top sellers are Nacho, Pico do Gallo and Sea Salt.

May 2018 Canadian Grocer

Made in Canada

Hippie Snacks—a B.C.-based brand that’s found success with snack lines like Coconut Clusters, Veggie Clusters and Grain-free Granola—has now launched a new Organic Sesame Snack. Boasting significantly less sugar than other similar snacks on the market, Hippie Snacks’ version is made with crunchy white and black organic sesame seeds and is sweetened with coconut sugar.

AISLES

THE GREAT OUTDOORS

NEW ON SHELF!

AS THE WEATHER WARMS UP, it’s time for backyard entertaining—and all those disposable cups, plates, cutlery and skewers that go along with it. And don’t forget foil wrap for barbecuing, or the storage bags and containers for all those leftovers! As outdoor entertaining season approaches, this Nielsen data reveals how food storage and disposable dishware categories have been performing.

Looking to add some excitement to your product selection? These three innovative items could liven up any grocer’s aisles.

Food storage and disposable dishware sales - 52 weeks, ending Feb. 3, 2018 $ Sales (000s)

$ Vol % Chg

Units (000s)

Units Vol % Chg

1. FOIL WRAPS: ALL

68,074.5

-2

21,500.4

-5

FOIL WRAPS: SIZE 0-25 FEET

17,020.9

-6

9,265.8

-10

FOIL WRAPS: SIZE 101 FEET & OVER

11,984.5

-9

1,112.9

-5

FOIL WRAPS: SIZE 26-50 FEET

17,264.3

-1

5,808.8

-4

FOIL WRAPS: SIZE 51-75 FEET

114.8

N/A

38.3

N/A

FOIL WRAPS: SIZE 76-100 FEET

21,690.0

5,274.6

CAULIPOWER Better-for-you frozen pizza with cauliflower crust After a successful U.S. launch, Caulipower frozen pizzas are now available in Canada in four flavours: Margherita, Three-Cheese, Veggie, and Plain Crust. Using real cauliflower to make the crust, the pizzas are gluten free and rich in nutrients.

FOOD STORAGE PRODUCTS: ALL

96,046.5

15,633.9

-1

DISPOSABLE CONTAINERS

28,192.7

6,317.8

-3

FOOD STORAGE PRODUCTS

67,853.8

9,316.1

190,623.6

53,986.8

110,148.1

27,534.1

1,446.7

-13

456.9

-19

56,601.3

19,854.2

6,581.6

-4

2,616.4

FOOD STORAGE BAGS - STORAGE/UTILITY

15,845.9

3,525.2

-4

FOOD WRAP: ALL

39,675.4

-1

10,835.8

5,113.0

-2

1,577.1

-9

20,344.7

6,917.4

Stuffed Reese cups now available in mini format

9,010.4

2,024.4

CUTLERY - DISPOSABLE - FORKS

4,972.4

2,114.3

CUTLERY - DISPOSABLE - KNIVES

1,072.6

505.6

-1

141.3

-20

100.7

-18

A year after the launch of the innovative Reese Big Cup Stuffed with Pieces, there’s a new mini version: Reese Miniatures Stuffed with Pieces. These mini Reese peanut butter cups filled with bits of Reese’s Pieces are designed for sharing.

2. FOOD STORAGE BAGS: ALL FOOD STORAGE BAGS - FREEZER FOOD STORAGE BAGS - OTHER FOOD STORAGE BAGS - SANDWICH FOOD STORAGE BAGS - SNACK

WAXED PAPER DISPOSABLE CUTLERY: ALL CUTLERY - DISPOSABLE - ASSORTED

CUTLERY - DISPOSABLE - PICKS 3. CUTLERY - DISPOSABLE - SKEWERS CUTLERY - DISPOSABLE - SPOONS CUTLERY - DISPOSABLE - STICKS DISPOSABLE DISHWARE: ALL

381.5

251.7

4,529.9

1,759.9

-4

236.6

-24

160.8

-26

106,910.5

22,326.1

-2

4. DISHWARE - DISPOSABLE BOWLS

5,346.7

1,600.3

-4

DISHWARE - DISPOSABLE CUPS & DISPENSERS

32,317.2

8,620.5

DISHWARE - DISPOSABLE PLATES

69,246.6

12,105.3

-3

1. Is foil wrap out of style? Foil wrap sales

dropped in both dollar value and units sold (by 2% and 5%, respectively) in the latest 52 weeks ending Feb. 3, 2018. 2. It’s in the bag! Dollar sales of food storage bags are up by 3%, with Canadians spending more than $190 million on various types of food storage bags in the past year.

3. It looks like Canadians are loving their

kabobs—sales of disposable skewers have risen by a whopping 30% in dollar volume and 10% in units. 4. Consumers are spending more on disposable bowls, but buying less of them—bowls are up in dollar sales by an impressive 8%, but have decreased in unit sales by 4%.

REESE MINIATURES STUFFED WITH PIECES

SANPELLEGRINO + TEA New organic sparkling tea with fruit juice Adding to its sparkling fruit beverage family, Sanpellegrino has launched an organic sparkling tea called Sanpellegrino + Tea. Made from organic tea extract, pure cane sugar and Italian fruit juice from concentrate, it comes in two flavours: limone (lemon) and pesca (peach).

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

May 2018 Canadian Grocer

CHECKING OUT George Condon

Are retailers shooting themselves in the foot by imposing too many charges on manufacturers? THERE’S CLEARLY turmoil in the Canadian grocery industry today. And there are signs that things could get worse. Take, for instance, our Annual Market Survey. Published earlier this year, the survey showed a total sales increase at traditional grocers of just 1.4%—more or less the rate of grocery industry inflation. Sure, the economy had a role to play in grocery’s lacklustre performance, in some regions more than others, but the entire industry was affected by intense competition from Walmart, Costco, drugstores and specialty stores. Canada’s top grocers are doing what they can to improve sales and profits. They're investing in e-commerce, home meal replacement and, recently, meal kits. They’ve also trimmed head office staff. But amid all this activity, many manu-

May 2018 Canadian Grocer

facturers are beginning to feel ignored and mistreated. I fear these suppliers are getting fed up with their treatment, and this can only lead to problems for retail down the road. Because of the increasing costs of dealing with large retailers, suppliers have been reducing their investment in new product innovation. The funds normally going toward product development are being used to maintain the status quo at retail. Not a good development, especially since successful retail depends on the availability of exciting new products. Rather than offering more unique products to Canadian retailers, suppliers are setting their sights on the export market. One reason for this state of affairs, say manufacturers, is that some big Canadian retailers have been squeezing money from

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

DREW SHANNON

TIME TO RETHINK THOSE FEES

them at an ever-increasing rate. This goes beyond the steep listing fees imposed by retailers and includes myriad charges and penalties that are bordering on unfair. For example, if a supplier’s truck is not at the loading dock at the appointed hour, in some cases the manufacturer can be punished with expensive fines (even if the holdup is caused by store staff). There can be penalties for billing errors, even when they are the retailer’s fault. And even when the retailer admits its mistake, there are usually demands to the supplier for something in return for a partial refund. What has pushed manufacturers’ buttons most is one major retailer’s move, last fall, to impose a 0.79% handling fee on suppliers using its distribution centres. The fee came on the heels of its move in September 2016 to apply an automatic 1.45% price deduction on shipments it receives from suppliers. Add to this the ongoing demands for product and mandatory price reductions when retailers open or renovate stores or streamline their supply chains, none of which ever seems to result in additional sales or productivity for suppliers. There is also the disconnect between category managers and supplier reps. The category managers are focused on category profitability, not so much the profitability of the supplier. Not to mention that at some retail head offices there’s a revolving door for category managers, making it impossible for supplier reps to establish a useful relationship based on mutual interests. As manufacturers get increasingly ticked off by the treatment they’re receiving from big retailers, and as their costs continue to climb, there is the real risk retailers will not see any new products and some known brands will no longer be available. To my mind, it seems like retailers are shooting themselves in the foot. Manufacturers say it’s time for a reboot. CG

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Appetites have changed. So have we. The Maple Leaf brand is changing. Starting now, our food will only be made with real, simple ingredients. Look for our new products, logo and packaging coming to stores across Canada throughout the year. Find out what real food means to us at mapleleaf.ca