December 2011/January 2012 Issue by Grocery Business

December January 2012 Vol 1 | No 3

PM # 42211029

a roundtable with retail council of canadaâ&#x20AC;&#x2122;s

David Wilkes & Diane Brisebois more inside on:

The Advantage Report The Village Grocer moves uptown $6.95

People • Products • Promotion • Passion December | January, 2012 Volume 1, Number 3 www.grocerybusiness.ca Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca

publishers’MESSAGE

Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca Contributing Editors Sally Praskey, Kim Laudrum, Noelle Stapinsky, Marjoe Johne, Jim Barnes, Emily Gravelle Creative Agency Boomerang Art & Design Inc. Contributing Photographers Christopher Scott, Robert Bava, Alanna Glicksman Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Grocery Business Advisory Council Bill Dunne, Acosta Canada Phil Donne, Campbell Soup Canada John Scott, Canadian Federation of Independent Grocers Perry Caicco, CIBC World Markets Nancy Croitoru, Food and Consumer Products of Canada Tim Berman, Kraft Canada Inc. Mark Ayer, Procter & Gamble Inc. David Wilkes, Retail Council of Canada Cori Bonina, Stong’s Market Michael Marinangeli, MIDEB Consulting Inc. © Copyright 2011. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Grocery Business Media 390 Queen’s Quay W., PO Box 4085 Toronto, ON M5V 3A6

Taking the Temperature Although most of the economy-related news has been gloomy and the forecast worrisome, you’d never know anything was amiss if you’d attended Grocery Innovations Canada (GIC), held recently in Toronto. With over 2,000 visitors, the GIC show had amazing energy and vitality – a testament perhaps to the adage that, no matter what, “people need to eat.” But it was also an endorsement of the intrinsic vigour of our industry, despite the many challenges facing it. For a glimpse of what was notable and new at GIC, coverage begins on page 54 of this issue. If you didn’t attend the 2011 event, well, save the date for this year’s edition – it’s being held October 1-2 at the Metro Toronto Convention Centre. One of the measures of the health of the industry is the relationship between retailers and suppliers. And as you can see from the most recent Advantage Group study on page 33, there continues to be challenges, for both groups, in aligning expectations with execution. These obstacles are not insurmountable, but if they are not addressed they can grind down the goodwill of the trading relationship. Ironically, the main disconnect points to logistics, something that the grocery industry has excelled at

for well over a century. Efficiently moving food and packaged goods from place to place is what we do, and is a key pillar of the business. And, astonishingly, the other “miss” is with communication. Really? Has the basic exchange of useful information between buyer and seller become a casualty of our 24/7 “always-on” culture? There are no easy answers or simple fixes, but the Advantage Group report card does suggest best practices to benchmark against. Our hope is that the dial will have moved in the right direction when, next year, the organization once again takes the retailer/vendor temperature. So, as an exciting new year begins, please accept our good wishes for a happy, prosperous and collaborative 2012. And to everyone who helped give Grocery Business its own healthy and vigorous start – many thanks! karenjames@grocerybusiness.ca kevinsmith@grocerybusiness.ca

Grocery Business December | January, 2012 Volume 1, Issue 3

contents

Loblaws Maple Leaf Gardens,Toronto, Ont.

Departments 5

Publishers’ Message

Front End

Taking the industry temperature

What’s happening in the grocery business

Grocery People

How to put pizzazz in your pizza program

40 Profile: The Village Grocer

Our readers respond

12 Open Mike

43 6

December | January 2012

Serving up old favourites in new digs

64 It Figures

On the move

10 Feedback

21 Shelf Life: Deli Pizza

Michael Marinangeli asks: What’s going on with conventional grocery stores?

Nielsen spotlights consumer shopping behaviour

on the cover

Roundtable with Retail Council of Canada

features 11 Making It: Maple Leaf Foods

The manufacturer has sunk a lot of dough into its new mega-bakery

14 Greening the $upply Chain Sustainability with trailer side skirts

21 15 Ethnic Foods: Chinese New Year

An opportunity to build relationships with Chinese Canadians

16 Trade Fare: Anuga 2011

Convenience, health and sustainability dominated at the latest Anuga show

17 Grocery Goodness

Q&A with Michelle Scott, executive director of The Grocery Foundation

19 Vineland Research and Innovation Centre

Ontario research facility cultivates next-generation fruits and vegetables

27 Going For Brokers

Brokers have evolved into full-service sales and marketing agencies

33 The Advantage Report: What Retailers Want

Advantage International’s annual survey takes the temperature of the trading relationship

38 How Do Canadians Eat?

The NPD Group’s Eating Patterns in Canada illuminates consumption patterns

43 Category Report: Coffee An update on coffee trends

48 Loblaws Scores

With their Maple Leaf Gardens store

60 Michael Marinangeli Retires from UGI

63 Calendar 2012 Event Planner Can’t-miss industry events for this year

66 I Remember Alex Campbell John Scott’s poignant tribute to a late industry icon

51 Seasonal: Spring Cleaning

Consumers are still going for green in the household cleaning category

54 Grocery Innovations Canada 2011

Award winners, 10 Most Innovative Products and more

59 International: Drake Supermarkets

How Roger Drake built the largest independent chain in Australia

December | January 2012

Front End

Sobeys buys retail gas locations Sobeys is expanding its retail gasoline operations with an agreement to buy approximately 250 gas stations in Atlantic Canada and Quebec from Shell Canada. The deal will include both corporate-owned and dealer-operated locations, with annual fuel volumes in excess of one billion litres. The transaction is expected to close by the end of March 2012. “This is an exciting opportunity for us to grow our existing retail gas operations while leveraging our significant wholesale and convenience business to better serve our customers and support our affiliates and dealer operations,” says Bill McEwan, president and CEO, Sobeys Inc. “Shell’s strong fuel brand connected to Sobeys’ leading retail formats and banners and the strength of the Air Miles

program will be a unique and attractive offering to customers.” Of the locations that are being acquired as part of this deal, approximately 200 are in the province of Quebec with the remainder in the Atlantic provinces. “By adding fuel retail to our customer offering in Quebec, Sobeys becomes a strong partner for independent retailers who will benefit from our experience in collaborating with this type of business,” says Marc Poulin, president, IGA Operations business unit. “In addition, the participation of Shell and IGA in the Air Miles rewards program means we will seek to leverage cross-promotion opportunities to benefit our customers.”

Jason Potter

Marc Poulin

Sobeys recently announced an organizational realignment: Two business units have been formed, each led by a President of Operations.

By getting involved in CPMA’s exciting Fruits and Veggies – Mix it up!TM program, you can become a leader in the movement towards better overall health for Canadians. Your support will go directly into programs that promote better health through the consumption of products that drive your business.

Mix it up!TM today! TM/MC

@FruitsNVeg

December | January 2012

Contact Lianne Wand 613-226-4187 ext. 225 • lwand@cpma.ca

The IGA Operations business unit consists of IGA and IGA extra, Les Marchés Tradition, Marché Bonichoix, and Rachelle-Béry in the province of Quebec and will continue to be led by Marc Poulin. The Multi-Format Operations business unit includes Sobeys, Thrifty Foods, Sobeys Urban Fresh, Foodland, IGA stores (Western Canada), FreshCo, Needs, Fast Fuel, and Sobeys liquor operations. The MultiFormat Operations business unit will be led by Jason Potter, formerly President of Operations, Sobeys Atlantic Region.

People

Terrio Named CEO of CROSSMARK Canada Christopher S. Terrio has been appointed president and CEO of CROSSMARK Canada, an operating company of CROSSMARK, Inc.

NaNcy MesshaM Larry Ketcheson, CEO of Parks and Recreation Ontario (PRO), is pleased to announce that Nancy Messham is assuming the role of Sponsorship Development with PRO. With her passion for wellness and extensive background in the CPG industry, Nancy is most recently known for her work on developing the Health Check program in Canada. In her new role, Nancy will pursue innovative partnerships within the food industry and related sectors that will support the value and benefits of quality recreation and it’s important role in consumer wellness. ••• PRO is the not-for-profit association providing leadership and expertise to the parks and recreation sector by delivering education, training, research and quality programs. Championing recreation and parks capacity to build healthy citizens, communities and environments, PRO also enjoys a growing reputation as the go-to group for provincial policy and program development as well as grassroots engagement. •••

Please join me in congratulating Nancy on her new role. nmessham@prontario.org

Terrio joins CROSSMARK after more than 23 years of international CPG and food and beverage experience. With leadership roles at Heineken Canada Ltd., Consumer Impact Marketing-USA and Coca-Cola Canada, Terrio is uniquely qualified to lead Crossmark’s Canadian operations.

Offer SELF SERVICE a convience that is EASY, EFFICIENT and ACCURATE. BIZERBA - K CLASS scale systems ... Ideas ... Change the World Bizerba K class Touchscreen scales

Bizerba North America In Canada: Tel. 905 816 0498 Fax. 905 816 0497 E-mail. sales @ Bizerba.ca www.bizerba-na.com December | January 2012

Front End

Reset...

Metro Inc. has entered into a partnership agreement with Marché Adonis, an ethnic food retailer specializing in fresh and Mediterranean products and prepared meals. Metro now holds a 55% interest in the retailer and its distributor, Phoenicia Products. . . . . Fondaction CSN has invested $2.5 million in growth financing in Aliments In Foods, which develops and commercializes

Lidia Bastianich, celebrity chef and one of the founders of New York City’s famed Eataly food and restaurant emporium (featured in GB’s premiere issue), was in Toronto at All the Best Fine Foods to promote her cookbooks, line of gourmet foods, restaurants and new Italian wine list. Was she also in town scouting a site for another Eataly store? Her reply? “Toronto is a great city for restaurants.”

food under the InCuisin and InSnax brands. The investment is to support the launch of the company’s InCuisin line of risottos. . . . . The Procter & Gamble Company has received the Thomson Reuters 2011 Top 100 Global Innovator Award. The award is based on a series of proprietary, patent-related metrics developed by the

Feedback Karen: Please accept my congratulations on

Thomson Reuters Intellectual Property Solutions

your wonderful new grocery magazine. I know

Business. . . . . Sobeys Inc. and BMO Bank of Montreal

it took strength, passion and perseverance by

have launched two online co-branded bank accounts – a

you, Kevin and the team to make it all a reality – in a word, success. I loved the format, paper,

no-fee chequing account and a high-interest savings account. Both come with a debit card and several ways to accumulate Club Sobeys points. . . . . Mosaic Sales Solutions, a Toronto-based retail and experiential marketing agency, has acquired the sales and merchandising operations of Consumer Impact Marketing (CIM), a provider of retail sales solutions. . . . . Home Care Industries, Inc. announces the hiring of Concord National to enhance distribution of Febreze™ Deep Cleaning Carpet, Rug and Upholstery Formulas and Spot & Stain Remover Sprays into the broader Canadian market. Home Care Industries licenses the Febreze™ brand for carpet cleaning products from The Procter & Gamble Company. The grocery industry is mourning the passing of Alex Campbell, co-founder of Thrifty Foods. See the back page for a poignant tribute by John F.T. Scott, president and CEO of the Canadian Federation of Independent Grocers. 10

December | January 2012

Blair Ruelens

layout and content. Congratulations to all.

Vice-President, Customer Development Pepsico Foods Canada

Within a very competitive landscape, grocery operators are

trying many distinctive ways to drive traffic and steal share from the competition. As a vendor representative, offering engaging programs with customized merchandising and unique

communication solutions to operators is the key to driving

shoppers into their stores, and Grocery Business is a great resource on that front. Keep up the good work! Steve Tsafkopoulos

National Accounts Manager – ISB Rich Products of Canada Ltd.

Would we be able to receive additional copies of Grocery Business magazine? The content looks excellent – great magazine. Congratulations! Judy Jackiw

Director, Retail Marketing & Procurement The Grocery People Ltd., Edmonton, Alta.

p h oto : R obert B ava

Look who’s reading Grocery Business

Making It

Maple Leaf Foods Maple Leaf Foods has sunk a lot of dough into its new mega-bakery in a quest for rising efficiencies By Marjo Johne

The official opening in September of Canada’s largest bakery was a good news story on a number of fronts. For Maple Leaf Foods and its investors, the launch of the $100-million, 385,000-sq.-ft. facility was another step forward in the company’s four-year plan to create value for shareholders. At an estimated capital cost of almost $1.3 billion, the strategy calls for improved efficiencies across the company. The new facility achieves this by consolidating three aging bakeries in Toronto into one mega-bakery with the latest factory infrastructure and energy-efficient building design. “Our new facility is among the most efficient in North America,” says president and CEO Michael McCain. “We are particularly proud of the environmental features that we engineered into the facility to meet rigorous environmental standards.” According to Richard Lan, chief operating officer, the facility has seven lines, all in one building. The resulting economies of scale will be significant, he told Grocery Business.

“We’re replacing some very old plants with brand new assets, which should give retailers a high degree of certainty that bread is going to be on the shelf.” – Richard Lan, COO

Michael McCain, president and CEO

But for the residents of Hamilton, where the new bakery is located, the good news can be summed up in one word: jobs. While about 130 Maple Leaf Foods employees from the Toronto bakeries are relocating to the new facility, Hamiltonians can expect about 170 jobs to open up for them. At the same time, Maple Leaf Foods will be paying the city an estimated $1.6 million a year in municipal taxes. So, what’s the good news for food retailers? The bakery, which produces Dempster’s and Villagio brand baked goods, is rolling out about 240,000 loaves of bread each day. Unlike the old facilities, where some lines were faster than others, the new bakery will have every line going at full speed. With the Hamilton facility’s state-of-the-art infrastructure, there’s a much lower likelihood of machines breaking down, says Lan. “We’re replacing some very old plants with brand new assets, which should give retailers a high degree of certainty that bread is going to be on the shelf,” he notes. “With the new bakery and the new equipment, they’re going

to have a secure supply of bread.” The Hamilton facility, which is equipped with baking technology from Europe, produces even better bread than that from the old bakeries, says Lan. He invites close inspection of the crumb structure on the products made in the new bakery. “You’ll notice that it’s tighter,” he says. “It’s a subtle improvement but it does result in a nicer texture.” Maple Leaf Foods has allocated 50,000 sq.-ft. of the new facility for product innovation and new category expansion. This means retailers – and consumers – can expect more good things to come out of the giant ovens in Hamilton. Lan isn’t able to disclose at this point exactly what new products retailers can expect to see on their shelves, but he says there will be “different and exciting things” ahead. “Whatever those new products may be – whether it’s baguettes or something else – you can count on them being really good,” he says. “You’ll sit back and say, ‘wow, that’s better bread’.” December | January 2012

Open Mike

From “Conventional” to “Multi-dimensional” By Michael Marinangeli

Long-time grocery industry observers have noted that Canadian store offerings, like our economy, are undergoing a polarization, stratifying into highend and discount. The incredibly shrinking middle class is mirrored in the declining role of what we have always called “conventional” store formats. The high-end stores are compelling. They offer unique products, plenty of sampling, and great ambiance. Meanwhile, at the other end of the spectrum, the discounters/mass merchandisers and even the ethnic grocers are stepping up their game to become the new “conventional” offering. Not surprisingly, these discount/conventional retailers’ prices have become the consumers’ benchmark against which they measure all other retailers. Even the dollar stores have entered the fray. Although this channel is fairly new to food, it is creating an even lower pricing level that consumers can take advantage of if they’re interested in that kind of shopping experience. In other words, if the discounters are becoming the new “conventional” stores, the dollar stores have become the new “discounters.” So where does this shift leave the traditional conventional store, which is higher in price than the discounters and yet doesn’t deliver on the other metrics that create value in the consumer’s mind? In 12

December | January 2012

this fiercely competitive market, a 30 per cent price premium for a ho-hum shopping experience isn’t a sustainable business model. As conventional stores decline in market share, discount stores’ slice of the pie continues to grow, according to the latest Retailer Commodity Share data. In fact, the discount channel is growing so fast in Ontario and is now so overdeveloped that its market share is almost on a par with that of traditional conventional stores. The shift between conventional and discount formats is not new. In 1969, conventional stores in Ontario were under severe pressure when Sam Steinberg converted his struggling Grand Union stores to Miracle Food Mart and launched Miracle discount prices. Within three years, the stores had almost doubled their share. The dominant conventional retailers eventually took notice, and throughout the late ’70s and early ’80s, they launched their own discount offerings. Loblaws introduced No Frills, and everyday low pricing became the main arrow in everyone’s quiver. It’s no wonder that when the dust had cleared, so had the number of players on the field.

Even the dollar stores have entered the fray. Although this channel is fairly new to food, it is creating an even lower pricing level that consumers can take advantage of.

Open Mike It now seems that history is repeating itself as the discounters gain the upper hand again. And with good reason; they offer clean stores, reasonable selection and, of course, great prices. The points of difference between them and conventional stores are beginning to disappear, and the customer looks at the price gap with more scrutiny and scepticism. After all, in the absence of a differentiating value proposition, price becomes the deciding factor. So what can retailers do to make their conventional store offering compelling to consumers? Let’s start, as an industry, by calling those conventional stores that have successfully repositioned themselves “multi-dimensional,” and rename the discount stores “conventional” because, in reality, that’s what they’ve become. Individual retailers can begin their stores’ rebranding by recruiting a “SWAT” team of their best talent. These folks will put all aspects of the operation – pricing, presentation, service levels – every metric, department by department, under a microscope. The goal is to create a strong brand positioning (the banner needs to stand for something – either value pricing or valueadded) and stick with it to deliver a consistently identifiable shopping experience for the consumer. A multi-dimensional store can compete and thrive by carving out a distinctive niche. Competitive, if not fully discounted, pricing supported by an exciting shopping experience can be a winner with the consumer. There are many great examples of retailers who are doing this brilliantly. They’re not hard to pick out – they’re the ones that are growing.

The Way We Were: In 1959, Sam Steinberg, a very savvy retailer, purchased the American chain of 38 Grand Union stores in Ontario. It was a shot fired over Dominion’s bow to keep his competitor honest in Quebec, Sam’s home turf. These stores operated under the Steinberg banner in Ontario until 1969, when they were converted to the Miracle Food Mart stores with the launch of “Miracle discount prices.”

To find out more… After Mr. Sam, by Arthur Hammond – a National Film Board documentary filmed at two tension-filled Steinberg succession planning board meetings. Steinberg: The Breakup of a Family Empire (1990), by Ann Gibbon and Peter Hadekel – a book profiling the family drama that set the stage for much of what was to evolve into the Quebec grocery retail landscape of today.

Michael Marinangeli is a principal at Mideb Consulting Inc. and a retailing veteran with more than 40 years of experience.

GROW YOUR BUSINESS WITH THE CANADIAN PRODUCE MARKETING ASSOCIATION Attend CPMA’s 2012 Annual Convention and Trade Show in Calgary for great learning sessions on the trends, issues and challenges facing the produce industry. Visit online for information and registration. www.cpma.ca

CALGARY 2012

87TH ANNUAL CPMA CONVENTION & TRADE SHOW

PRODUCE A MOUNTAIN OF OPPORTUNITIES

April 11-13, 2012 • Stampede Park BMO Centre Canada’s leading fruit & vegetable industry event!

@cpmaconvention

December | January 2012 CALGARY 2012

Sustainability

s the trucking industry says, “If you got it, a truck brought it.” Grocery stores depend on trucks to keep the shelves fully stocked and perishables as fresh as possible. But with razor-thin margins, grocers need to take every opportunity to cut

their transportation costs. Otherwise, they are leaving money on the truck. “Greening the $upply Chain” is intended to help retailers and manufacturers reap savings from their transport trailers while reducing their carbon footprint.

Greening the Supply Chain By Alan Boughton

Faced with skyrocketing fuel prices and an uncertain economic climate, fleet managers are looking for ways to cut transportation costs. By “greening” your trailers, you can dramatically lower your fuel costs while reducing your carbon footprint. Let’s start with the exterior. A shoebox-shaped trailer hurtling 100 km/h down the highway can be a real drag – in other words, it isn’t exactly aerodynamic. That’s where trailer side skirts – or fairings – come in. By streamlining the air flow and reducing the undercarriage drag, they cut fuel costs by four to seven per cent, for an estimated payback period of seven to 18 months, according to Natural Resources Canada’s FleetSmart data. Mandatory in California, trailer side skirts are now an option on all new trailers and, in many cases, will be retrofitted by fleet operators on trailers running 50,000 kilometres or more per year. A trailer running 100,000 kilometres per year will reduce greenhouse gas emissions by

many tons, but most will save from $1,600 to $2,400 a year in fuel at today’s prices (see chart). The trick is to find a product that will be long-lasting and maintenance-free. Three companies – Transtex Composite, Freight Wing, and Laydon Composite, – have been in the forefront of this technology since testing in Canada began in 2008, and continue to seek ways to help their customers. According to Trailcon’s stipulations, side skirts must be able to generate fuel savings of more than seven per cent at 98 km/h per hour. They must weigh less than 175 pounds, and should last the lifetime of the trailer. “I make it my duty to test every type of skirt or aerodynamic technology on the market,” says Michel Morin, fleet manager at Logistiques Trans West Inc., Montreal. Trans West picks up produce several times a week in California. “Not only have we experienced the advertised seven-to-nine per cent fuel savings,” he says, “but we have found also that side

By adding side skirts, a trailer running 100,000 kilometres per year will reduce greenhouse gas emissions by many tons, but most will save from $1,600 to $2,400 a year in fuel at today’s prices. 14

December | January 2012

FUEL SAVINGS

FUEL COST / LITER

ANNUAL KM

LITERS / 100 KM

SAVINGS / YEAR

$1.00

50,000

$800

$1.00

75,000

$1,200

$1.00

100,000

$1,600

$1.00

150,000

$2,400

$1.00

50,000

$1,000

$1.00

75,000

$1,500

$1.00

100,000

$2,000

$1.00

150,000

$3,000

$1.00

50,000

$1,200

$1.00

75,000

$1,800

$1.00

100,000

$2,400

$1.00

150,000

$3,600

skirts add stability to our trailers, especially when running through crosswinds in Wyoming. The durability is also pretty awesome. In an accident involving a trailer, a car found itself under the trailer, where the spring back and resistance of the skirt ejected the car and likely saved a driver’s life. As for the skirt, it bent back into its original shape.’’ Side skirts are a win–win proposition. Your company will need them to be both competitive and environmentally responsible.

Alan Boughton is president of Trailcon Leasing, which is headquartered in Mississauga, Ont. With operations in Edmonton, Trailcon Leasing Inc. leases, rents, and services a wide variety of trailer equipment. For more information, visit www.trailcon.com.

Ethnic: Chinese New Year

CAUSE TO CELEBRATE Chinese New Year presents an occasion for grocers to build relationships with the growing numbers of Chinese Canadians. By Marjo Johne

It may be cold and snowing on January 22, but for the Chinese community in Canada and around the world, this date marks the start of their spring festival in 2012. According to the Chinese lunar calendar, it is also the eve of the New Year – China’s most important holiday. “Factories and government offices in China close down and people celebrate this holiday for 15 days,” explains Mary Lui, a founding member of the Halton Region Chinese Canadian Association, based in Oakville, just west of Toronto. “Here in Canada, most Chinese Canadians celebrate Chinese New Year for about a week.” Whether they celebrate their New Year for a week or 15 days, Chinese Canadians go all out for this holiday, which in 2012 will be symbolized by the dragon. In urban centres, they take to the streets to watch lion and dragon dances, where performers cloaked in brightly-coloured silk costumes move to the beat of drums and the clash of cymbals. At home, they exchange “lucky money” in small red envelopes, prepare elaborate dishes for dinners with family and friends, and hang up traditional decorations such as “couplets” – red paper banners printed with messages of good luck. For grocers, this holiday presents an opportunity to strengthen relationships with

For grocers, this holiday presents an opportunity to strengthen relationships with Chinese Canadians, who comprise a large and growing consumer group.

Chinese Canadians, who comprise a large and growing consumer group. Statistics Canada Understanding what they need to prepare their traditional New counts more than 1.3 Year’s fare is important, says Gail Castillo. Chicken and fish million Chinese dishes are typical for this time of year, but grocers should take Canadians in the note that tradition calls for fish to be served whole, with head and country, and cites tail intact. Fruits such as tangerine and pomelo, which signify prosperity, are also in demand during Chinese New Year. China as the top source of newcomers to Canada. Gail Castillo, category insight Walmart stocks greater quantities of Asian manager for the Americas for AB World Foods products such as rice, sesame oil, taro root, Ltd. says retailers can play an important part soy sauce, and soy drinks. It also dedicates in helping Chinese Canadians celebrate their certain areas of the store to Chinese New Year New Year by stocking and properly merchanmerchandise, which includes not just food dising the products they need for this holiday. products but also housewares, décor items, At the same time, retailers can build greater and lucky money envelopes. awareness of Chinese New Year among other Walmart also sells gift cards branded for the Canadians. Chinese New Year and gives out Chinese New “It really is a great opportunity for retailers,” Year calendars. says Castillo, whose company recently launched “We also put on dragon dances at select its Blue Dragon line of Asian sauces, noodles, stores,” says Carneiro. wraps, soups and stir-fry products. “Christmas Castillo says Chinese New Year is a good may be over, but for more than a million time to promote Chinese cuisine to other Canadians, the big holiday is still coming up.” Canadians. Many Canadians love Chinese So what can retailers do to help their food but don’t cook it at home. Retailers Chinese Canadian customers celebrate their can change this by offering recipes and big holiday? products that make it easy to prepare Holiday shoppers are often pressed for time, Chinese dishes. says Castillo, so retailers need to ensure they Opportunities for grocers abound. As the make products easy to find. traditional New Year’s greeting goes: “Gung This is exactly what Walmart Canada does, hay fat choy.” In other words: “May you have a says Rosalyn Carneiro, a spokesperson for the prosperous and good year.” retail giant. During Chinese New Year, December | January 2012

Anuga 2011

Trade Fare Convenience, health and sustainability were the watchwords at the latest Anuga show By Ken Kwong

If you are seeking the mecca for international inspiration and innovation in the food and beverage industry, Anuga is the place to be. Considered the largest trade show of its kind, Anuga is held biennially in Cologne, Germany, at the vast Koelnmesse exhibition centre – equal in size to about 75 football fields. This year’s event attracted more than 6,500 exhibitors and 155,000 industry professionals from around the world. To make it easier for visitors to navigate the mammoth facility, the show was divided into 10 specialized categories: fine foods, hot and cold beverages, chilled and fresh foods, meat, frozen foods, dairy, bread and bakery, organic, food services, and retail technology. During my visit to the four-day event, I noticed that the ready-to-eat convenience category continues to gain in creativity and quality. Gourmet items, once requiring time and a multitude of ingredients, are now available in heat-and-serve formats. Vegetarian and gluten-free categories were also prominent; some interesting products included Coconut Flower nectar, Appleseed oil, and Red Hawaiian liquid salt. Fair-trade and environmentally sustainable products were also highlighted. Many manufacturers (noticeably in the organic category) proudly displayed the fair-trade and organic certification signs in their booths, a clear affirmation that this category will continue to grow internationally and demand more shelf space in stores. Some innovative products included: organic lemon juice from Sicilian lemons packaged in a biodegradable bottle; Quinoa Cocoa Biscuits with Chocolate, made from organic fair-trade cocoa and South American quinoa; and fair-trade espresso powdered rub.

There was also an emphasis on health and well-being. Touting the health benefits of vinegar, for example, was a new tonic beverage in three surprisingly refreshing flavours. It claimed a high concentration of biophenols, which are known to slow the aging of the body’s cells. Stevia and other unrefined, unbleached and no-additive alternative Ken Kwong sweeteners were also available, as were natural Ken Kwong is a North sources of caffeine and antioxidants presented in American Brand different formats and blends. Manager for National Importers. As expected when covering a show of this scale, kenkwong808@ you wish you had more time, a larger appetite, gmail.com. and extra pairs of gel pads for your shoes. Around every corner and down every aisle, innovative products and ideas await. Anuga is the perfect venue to see all the latest trends in the food and beverage market, as well as a great place to make first-rate contacts and business deals. As Canadian brokers, distributors and buyers The next Anuga will be held follow up on their leads from this show, get Oct. 5-9, 2013. ready for some new and exciting products to hit For more your local shelves in 2012. Top picks to expect: information, visit gourmet RTE products, certified fair-trade and www.anuga.com. organic products, natural and non-GMO ingredients, and exotic product innovations.

This year’s event attracted more than 6,500 exhibitors and 155,000 industry professionals from around the world.

December | January 2012

Profile

goodness

p h oto : C h ristop h er scott

Grocery

Michelle Scott

The Grocery Foundation fundraises for kids The Grocery Foundation began almost 30 years ago when a handful of Ontario grocery leaders decided it was time for their industry to make a meaningful difference in the lives of Ontario children. Out of that small group of retailers, manufacturers and food brokers grew an industry-wide charity called The Grocery Foundation. Since 1979, The Grocery Foundation has raised more than $75 million to provide a better life for challenged children.

Q&A with Michelle Scott, executive director, The Grocery Foundation GB: Michelle, you just released a major announcement of significant funding to Breakfast for Learning. MS: Over a year ago, The Grocery Foundation decided to seek a core partner in order to maximize its goal of feeding hungry children in Ontario. After an intensive review of submissions from several excellent organizations, we decided the partner that best met our objectives was Breakfast for Learning. We have committed $1 million per year for the next three years. GB: What will that mean for these charities? MS: Breakfast for Learning has provided nutrition programs to hungry children in Ontario for over 20 years. Our contribution will ensure that 140,000 children in 392 schools, right across the province, will have access to Breakfast for Learning’s student nutrition programs for the next three years. We are very proud of that.

GB: Is Breakfast for Learning the only organization that the Grocery Foundation supports in a major way? MS: We also partner with Kids Help Phone, which is an organization that ensures that kids have a safe place where they can talk and be listened to. Kids Help Phone has saved the lives and improved the situation of thousands of young people over 23 years. We annually give Kids Help Phone $1 million.

GB: What do you have planned for this year’s Gala? MS: We are very excited about some of the changes we are making this year. Attendees can look forward to an interactive silent auction area. We have gone back to the popular “concert in the round” centre stage format. That will bring attendees closer to our entertainment. We have also made it easier by facilitating online registration for the first time.

GB: How do you raise such large sums of money? MS: We are thankful for the excellent support of most of the food industry. Over 4,000 people annually enjoy “The Night to Nurture” Gala, which we hold in February each year at the Metro Toronto Convention Centre – this event alone raises $2 million. Our signature Toonies for Tummies program is currently being re-evaluated, and the industry can look forward to a new, more effective program in the coming years.

GB: You have been with the Foundation now for 10 months. What is your impression so far? MS: I think it is a fantastic organization that ensures that the food industry contributes to making a difference to the lives of so many hungry children. This could not be done without the dedicated board of directors under chair Dale MacDonald. I am enjoying my new role and its contribution to the grocery industry.

December | January 2012

Profile

Making a Difference

Night to Nurture

Breakfast for Learning This is the leading national non-profit organization solely dedicated to child nutrition programs in Canada. When children are well-nourished, they perform better in school. “Breakfast for Learning received double the number of applications from Ontario schools this past year, and if it were not for the incredible support of The Grocery Foundation, we would have needed to turn down qualifying high-needs programs,” says Wendy Wong, president and CEO of Breakfast for Learning. “Instead, we are able to support 1,137 Ontario schools, of which The Grocery Foundation is supporting 392 of them in 132 cities.” Kids Help Phone This organization improves the well-being of Canadian children and youth by providing them with anonymous and confidential professional counselling, referrals, and information through technologically-based communications media

December | January 2012

“The Grocery Foundation has been a passionate supporter of Kids Help Phone since the very beginning, and its commitment has made a tremendous impact on our services,” says Sharon Wood, president and CEO at Kids Help Phone. “It’s remarkable to be supported by partners who share a similar vision that no child should ever be hungry, cold, frightened, or feel unheard. Every week, our professional counsellors hear from over 4,000 kids and last year we gave them support over two million times through our phone and online counselling services. Now, thanks to The Grocery Foundation we will be able to continue this work.

Don’t miss The Grocery Foundation’s annual Night to Nurture Gala on February 4, 2012, at the Metro Toronto Convention Centre. Attracting almost 4,000 people, this is one of the premier events in the grocery industry’s calendar. Great For more information and Grocery Resources

to register, please visit:

www.groceryfoundation.com.

Innovation: Vineland

Home-grown advantage Ontario research facility makes next-generation fruits and vegetables possible to grow on Canadian soil. By Noelle Stapinsky

Grocers and their customers have access to a whole new range of locally grown fruits and vegetables, thanks to the work being carried out at Vineland Research and Innovation Centre in Ontario’s Niagara Region. The not-for-profit horticulture and agriculture research facility boasts some 60 scientists from around the globe who are developing new generations of fruits, vegetables and plants that meet consumer demands and are feasible for Canada’s agriculture industry to grow. To introduce grocery retailers to Vineland’s capabilities, the facility and the Canadian Federation of Independent Grocers (CFIG) co-hosted a one-day introductory workshop called Research to Retail: Innovations for the Canadian Grocery Industry. “We invited 25 innovative independent Ahmed Bilal, Vineland’s Research Associated Crop Production and Diversification, assesses a variety of locally-grown bottle gourd.

retailers from across Canada to introduce them to what Vineland is capable of doing for their consumers,” says John F.T. Scott, president of CFIG and chairman of Vineland’s board of directors.

The research facility’s roster includes consumer behaviour and sensory experts, a market economist who understands willingness to pay and market opportunity, and even an expert who does sensory analytics to dissect the chemistry of the feeling consumers have for a piece of produce. “It can be as simple as understanding peaches and what people like about them,” says Jim Brandle, CEO of Vineland. “One of the major issues in Ontario is that peaches are sold in baskets. About 20 per cent of people won’t buy them because of how they’re packaged. There’s a market potential to capture by changing the packaging and how you sell things to people.” For Ontario growers, Vineland has developed a pear variety called Harovin Sundown that requires less pesticide and produces higher yields. “It’s a fruit that’s worth more money, but that means growers will be paid more and the grocery retailers will get exclusivity in a novel, differentiated product,” says Brandle. Just one example of the many newly developed products that will grow across Canada and potentially around the world, the pear is currently being marketed through the Vineland Growers Cooperative to retailers in eastern Canada. Vineland has also been doing groundbreaking work on what it refers to as world crops. “There’s a huge population of people from around the world in Canada,” says Brandle. “We’re recognizing the magnitude of that demographic shift and identifying what the major ethnic groups are and what they need

Harovin Sundown Pear, a made-in-Canada product recently commercialized by Vineland Research and Innovation Centre.

in their diet that we don’t grow here.” According to Brandle, importing ethnic produce is currently costing retailers an average of $60 million a month. By matching the needs of ethnic consumers – as well as the new breed of shoppers who are more adventurous in their culinary pursuits – with what can be grown in Canada, Vineland discovered that it could develop and cultivate items such as Chinese red hot peppers, Indian kaddu, okra, yard long beans and Asian eggplant. This is accomplished through basic plant breeding, often crossing two varieties to make the plants more durable in our climate. On the horticulture side, Vineland is developing plants that can survive longer in a store environment by using reverse genetics to decrease the plants’ need for water and increase their tolerance for existing in low-lighting environments. “Our customers are more knowledgeable and want to know where their produce is coming from,” says Christy McMullen, store manager of family-owned Summerhill Market in Toronto and one of the attendees. “There’s a big push for locally grown produce. Being able to buy from Canadian farmers would cut down on the costs of importing, and we’d be getting fresher food.” The workshop represented a rare opportunity for independent grocers to liaise with the scientists, says Scott. “For once, the independents get a chance to get in on the ground floor.” December | January 2012

THERE ARE 100 REASONS TO USE THE

100% CANADIAN MILK SYMBOL

HERE ARE A FEW A GUARANTEE THAT THE PRODUCTS ARE MADE FROM

PRODUCTS MADE FROM

100% CANADIAN MILK

100% SUPPORT FOR THE

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ARE AN INDICATION OF QUALITY

CANADIAN ECONOMY

A growing number of people want local products. They want to know where the products come from, how they were processed and by whom. When people visit my farm and ask me these questions, I can answer proudly that our butter is made right here and I can tell them how I make it and with what kind of milk. It is not surprising that more and more processors and retailers use the 100% Canadian Milk symbol on their products. The symbol is important in the eyes of consumers; they are looking for 100% Canadian milk in their dairy products.

The Canadian regulations that surround the production of dairy products are so strict that we can only make products of the highest possible quality. It’s a good reason to feel proud. The 100% Canadian Milk symbol means healthy, safe and fresh products made entirely from here. Retailers choose to distribute Gay Lea Foods’ Ivanhoe artisan cheeses because they proudly bear the symbol on their packaging. It’s a guarantee of high quality milk. The same goes for consumers. When they see the symbol, they don’t even have to read the list of ingredients to feel confident about the product.

We are a third generation dairy farmer family. I can tell you that people are happy when they learn that our milk comes from a nearby farm. They’ll often say, “I drive by that farm all the time. I know exactly which one you’re talking about!” When I put the 100% Canadian Milk symbol on my cheese packaging, I guarantee that it is made with milk from Canadian farms. People make an informed decision when they purchase my cheese. They know that they are getting great quality for their money, and that they directly support our economy.

DIANE GROLEAU

CAROL JOHNSTON

DOUG SMITH

Beurrerie du Patrimoine Compton, Quebec

Gay Lea Foods Co-operative Mississauga, Ontario

Natural Pastures Cheese Company Courtenay, British Columbia

FOR MORE INFORMATION, CONTACT GILLES M-DESCHÊNES, ASSISTANT DIRECTOR, MARKET DEVELOPMENT – RETAIL | GILLES.DESCHENES@DFC-PLC.CA | 1 800 361-4632

Shelf Life: Deli Pizza

Put Pizzazz in your pizza program The market for Take N Bake pizza is on a roll. You, too, can get a slice of the pie.

Coming to terms

By Rick Johnson

Take N Bake is restaurant-style pizza that is sold fresh; consumers take it home and bake it themselves. Grocers may prep the pizza in-store, or have it delivered frozen and slack it out to give the experience of fresh. Take N Bake is distinct from ready-to-eat pizza that is cooked in-store and served hot.

Although Take N Bake pizza is not a new category, it has started to take off in North America. In the U.S., it has soared from 25-50 million dollars a few years ago to well over 300 million now. Why the growth? In a nutshell: ownership. In other words, retailers are committing to an in-store program â&#x20AC;&#x201C; merchandising the products in a consistent location with adequate space and selection to make it a destination that the consumer can always count on as a regular meal solution.

Take N Bake Q&A Who buys Take N Bake pizza? Take N Bake does not compete with frozen pizza; it competes with the pizza chains that deliver that medium or large pizza to your customerâ&#x20AC;&#x2122;s home for $20. Think about how you can head off that customer in the deli before she goes home and makes the call to 1-800-Pizza. What should I offer? From Vancouver Island to Prince Edward Island, everyoneâ&#x20AC;&#x2122;s view of pizza is just a little different. However, the best-selling pizzas are Meat Lovers, Pepperoni, and Supreme, followed by choices like Hawaiian, Mediterranean, BBQ Chicken, and even a simple five-cheese blend. Lead with a regular crust and then throw in a sampling of thin-crust varieties. Sizes range from 12 to 16 inches. The biggest-selling pies in pizzerias today are large

pizzas, and the retailers that have had success in the category have done so by featuring the 16-inch pizza. What programs are available? You have a couple of options. Many companies have decided to compete directly with the pizzerias by making their own fresh pizza in-store. But this option requires many man-hours to stay current. If in-house production falls behind, inventory is gone and so are your current customers. Some retailers, though, have taken ownership of this method and the results are outstanding. If man-hours are an issue, the other option is to have frozen pizza delivered and slacked out to give the experience of being made fresh. There are a few companies today that offer a beautifully prepared pizza, delivered to your store frozen, that looks like it was made in-house. After slacking it out, you get about

seven days shelf life. This convenience leads to consistent availability, which is a powerful reason for adopting this model.

Rick Johnson Director Signature Foods Rjohnson@sigfds.com

What margin can I expect? When you price your pizza too high, you get markdowns. When you price it to sell and keep your customer coming back because you are offering a better pizza than the pizzerias, the return is the same but the volume is much higher. And that has been the main reason for the growth of this category. Today, the retailers who have taken advantage of this opportunity are seeing a return of 25-35 per cent on average. With very few markdowns, this strategy maximizes the return on your Take N Bake location. December | January 2012

Roundtable with

Retail Council of Canada’s

Grocery Business’s editors recently met with the Retail Council of Canada’s president and CEO, Diane Brisebois, and David Wilkes, senior vice-president, for a conversation about the newly formed Grocery Division. By Jim Barnes

GB: What is the mandate of the RCC’s Grocery Division? DW: To ensure that we address the unique needs of grocery retailers in Canada within the framework of the RCC. The collective weight of the retail community allows us to effect positive change with government as we work closely with other grocery industry associations such as CFIG, GS1 Canada, and FCPC.

December | January 2012

GB: What are the top grocery issues you’re focused on? DW: The top four are food safety, health and wellness, environment and supply chain. As a core issue, food safety is non-negotiable. We are working on enhancing best practices related to store operations and procurement practices, and liaising with the Canadian government to have an effective and streamlined recall process.

GB: What differences/commonalities do you see between general merchants and grocery retailers? DB: Even before the integration, RCC had many members that were partially involved in the food sector or becoming interested in it. Some of the large existing members, such as Costco and Walmart, and some of the drugstores were very affected by grocery-related issues. Clearly, though, grocery retailers need a strong

p h oto : dean sanderson

David Wilkes and Diane Brisebois

voice because they face significantly more regulation than do general merchants. All retailers are affected by labour legislation or waste diversion; being able to address these issues collectively, with one voice, is a significant benefit to our members. DW: One file that unites all retailers is debit- and credit-card transaction fees. Along with our partner associations, we have achieved some significant successes here, but the fight is far from over. We want to make sure that what we have won in the bricksand-mortar battle migrates to mobile purchases, because the battleground is shifting from traditional plastic to mobile payment systems. We know that in the next five years, consumers will want to pay through their iPhone, Blackberry or electronic wallet tap-and-go cards. GB: As part of RCC, what other benefits do the grocery retailers derive? DB: The main benefit flows from bringing all the major retailers together so that we are a more powerful voice for the retailer community and a strong advocate with government. DW: The dual focus, addressing unique grocery issues and being an aggressive and assertive advocate on issues that affect all retailers, is the sweet spot that we are looking to operate in. As a sector, we don’t go in with two different points of view. That would let government split the difference and do what they wanted to do in the first place. We are a much more effective voice when we can say, “This is what retailers want and what their customers want.” GB: David, where does your focus lie? DW: My primary focus is grocery, but some of the issues definitely cross into other segments and I will engage with these other segments as the opportunities arise. DB: Although most of David’s time is on grocery-related matters, our management team meets to talk about our individual issues and the common files. I think an important part of the merger is that all of us

can speak to the key issues with some degree of knowledge so that the senior team has a consistent message. GB: How are your events being impacted? DW: We will continue to invest in and support the Grand Prix program; the awards dinner will be held on June 14. We took the program and delivered it last year, as it was. But now, we’re really stepping back and seeing how we can add more value so that we’ll continue to celebrate innovation within the Canadian grocery marketplace. DB: From an RCC perspective, we were very impressed by the rigorous judging in the Grand Prix program and the number of people involved. We’re getting feedback from members and asking ourselves how we can make it a better program. It’s a question of improving something that’s already very good. We will continue to focus on our national STORE conference and specialty conferences such as loss prevention, sustainability and human resources. Grocery components will be added to all the specialty conferences. GB: What does success look like a year down the road? DB: As president of RCC, I want to make sure that we end up with a cohesive group that has strong staff communication. So it’s important to get the right personalities, people with a deep knowledge of those sectors, working together, leveraging their knowledge to create synergies. This is really about the successful merging of two businesses. Also, we are looking to create a diversified national team that addresses grocery needs specifically but can also address general retail issues knowledgeably. DW: And leading on issues rather than being reactive to them. GB: Are there any other thoughts you’d like to add? DB: The grocery guys have high expectations – it’s keeping us on our toes!

Returning to RCC roots The Retail Council of Canada is no newcomer to the grocery industry. In fact, the first RCC food division was established in 1974. RCC was there for the creation of the Canadian Council of Grocery Distributors (CCGD) in 1987, too, when its food division amalgamated with the Canadian Grocery Distributors’ Institute. In 1996, CCGD withdrew from RCC to develop its own programs. The CCGD members had become concerned about competition from general merchandisers and mass merchants, who were showing growing interest in the grocery market. That era of parallel activity finally came to an end in 2011 as CCGD elected to dissolve and several prominent members returned to RCC membership to form the new Grocery Division.

Grand Prix Awards dinner When:

Thursday, June 14, 2012 Reception:

5 – 6 p.m. Dinner:

6 – 9:30 p.m. Where:

Toronto Congress Centre Cohen Ballroom (South Building) 650 Dixon Rd., Toronto More info:

www.retailcouncil.org

December | January 2012

And the Grocery Division retailers say:

Championing the cause Over the course of nearly five decades, Canadian retailers have had a champion in the Retail Council of Canada on a wide variety of mutual concerns. Since its origins in 1963, members have been drawn to RCC’s advocacy, lobbying, education services and events. The association’s annual STORE conference and trade show is unique in its ability to attract a broad spectrum of retailers, including grocers, who convene to discuss common issues. The list of issues that the RCC has engaged in successfully over the years includes debit-card fees, packaging and competition regulation, labour and sustainability. The RCC has also been responsible for helping to establish many organizations that strengthen the sector, such as the Canadian Retail Institute, the Independent Retailer Task Force, the national Retail Organized Crime Task Force and the first retail Internet working group.

With RCC dealing with the broader retail issues, the members say that the Grocery Division is able to devote its efforts to the issues most impactful to food. “We don’t have the distractions that CCGD did in trying to deal with general retail issues – we let RCC deal with them now,” says Bob Chant, vice-president, corporate affairs and communication, Loblaw Companies Ltd. “They’ve done a good job in narrowing the focus on issues that are relevant to food.” “We have a good, collaborative spirit in tackling the four key areas we have identified: food safety, the environment, supply chain, and health and wellness,” says Les Mann, senior vice-president, food and consumables, Walmart Canada. The ability to expedite the food agenda is vital, says Pierre Charron, vice-president, national procurement, grocery, Metro Inc. “It has been a year of transition and confirmation of priorities, and now we are ready to go beyond what was addressed in the past. We wanted to keep a certain continuity with what CCGD had,” he adds. “We had good resources,” including the ongoing services of David Wilkes as senior vice-president of the Grocery Division. “RCC offers the potential for coordinating efforts nationally, with more traction on those projects,” he adds. Efficiencies are a key factor when it comes to common areas of concern among retailers. “Part of our success to date has been finding the right level of engagement on our strategic areas of focus, “

notes Andrew Walker, vice-president, communications and corporate affairs, Sobeys Inc. “The Grocery Division ensures we have a strong voice on the myriad of issues common to retail, while allowing us to address those issues that are grocery-specific.” “We don’t have two separate groups advocating on the same issues, in the same way,” adds Chant. Bill Sexsmith, vice-president, retail marketing execution, Canada Safeway Ltd., also applauds RCC’s advocacy and lobbying activities. “They have a strong ability to get to the right people on the right issues.” As a regional, western-based company, Safeway sees its participation as vital. “We’ll know what is happening, and we’ll be helping to shape the decisions that are made,” he says. Coordination on a national level is also an attraction for Robert Lemoine, vice-president of retail operations and food management, Co-op Atlantic. “We’re in five different provinces and I am faced with five different stewardship “The Grocery Division programs,” he says. ensures we have “Keeping it as simple a strong voice on the as possible is a key myriad of issues goal. [RCC] keeps us common to retail, while well-informed.”

allowing us to address those issues that are grocery-specific.”

Stuart Shamis, secretary, Costco Wholesale Canada Ltd., agrees. “The national scope of RCC means that they can provide support in each of the provinces and federally.”

Executive Snapshot Diane J. Brisebois

David Wilkes

Council of Canada, Diane Brisebois oversees the largest

Council of Canada’s Grocery Division, with direct

As president and chief executive officer of the Retail

retail association in Canada, serving more than 45,000

establishments. RCC’s membership covers all segments of the retail market, including general merchandise,

grocery and pharmacy.

Brisebois serves on several boards across North America, and is currently the

chair of Washington, D.C-based Forum of International Retail Association Executives, which brings together retail associations from more than 35 countries to collaborate on issues affecting the retail sector globally.

She has studied in Quebec and Ontario, and was president of the Canadian

Office Products Association from 1980-1994. In 2002, she received the Pinnacle Award from the Canadian Society of Association Executives, which is the most

David Wilkes is the senior vice-president of the Retail responsibility for supply-chain issues. He also works with senior staff to manage key grocery industry

priorities related to environment and food safety.

Before joining RCC, Wilkes was the senior vice-president of trade and

business development for the former Canadian Council of Grocery Distributors (CCGD). He has also served as president of the Coffee Association of Canada. Prior to that, he worked for the Ontario Government as the executive assistant to the Deputy Minister of Industry and Trade.

He is active in several community associations, including serving on the

Board of Governors of George Brown College.

prestigious designation given to an association executive.

December | January 2012

Going for brokers No longer focused solely on sales, brokers have evolved into full-service sales and marketing agencies offering efficiencies to CPGs and retailers of all sizes. By Sally Praskey

Like every other sector of the food industry, brokers have experienced dramatic consolidation over the past several years. Where there were once some 150 across Canada, that total has plummeted by about two-thirds, with a handful of national companies and several smaller regional and niche players remaining. Whereas in the U.S., approximately 60 per cent of consumer packaged goods are broker sold, the comparable figure in Canada is an estimated 33-35 per cent. Chalk it up to the concentration of large chains here, in contrast to the many regional chains in the U.S. that

can spread a consumer packaged goods (CPG) company’s own sales force too thin. Nowadays, brokers are doing much more to add value to their offering, evolving into full-service sales and marketing agencies. “The services offered by brokers vary, but they are certainly more all-encompassing than in the past,” says Walter Snow, who used brokers for many years in his position as vice-president of sales of a large beverage company. According to Jon Davies, vice-president of business development at Crossmark Canada, there are four basic areas of service

now being outsourced in CPGs: sales coverage, plus retail, analytical and logistics services, amortizing those costs over a number of clients. Relationships with the CPGs are also evolving. “Investments in technology, consolidated data analysis, and a focus on employee training and skill-set development provide an opportunity for a more strategic partnership with their clients,” adds Snow. “Thought leadership and category insights have replaced the old model of primarily tactical activities. Collaborative planning with clients is now more the norm.” Bill Dunne, president of Acosta, agrees. “Our December | January 2012

Shoppers want more. So do you.

Thatâ&#x20AC;&#x2122;s why Acosta provides the most trusted CPG companies with more of what they need to succeed. Acosta understands that todayâ&#x20AC;&#x2122;s shopper is savvier than ever before, which is why we give our clients and customers more of the resources they need to turn those shoppers into buyers. We leverage our unparalleled reach to maximize your coverage, apply well-honed insight and expertise for brand momentum, and act as a strategic partner to ensure that all the pieces fit together. The end result? More sales. More growth. More success. Contact Bill Dunne, President, Acosta Canada at 905-265-3724 or email bdunne@acosta.com www.acosta.com

Percentage of respondents indicating their switch had an impact on:

Chart 1

Performance Changes Experienced by CPGs Moving Retail Activities to an SMA

Individual CPGs reported cost savings ranging from 10-50%

75%

63%

Positive impact

56% 44% 31%

31% 19%

-13% Source: Maximizing the Impact of Outsourcing: How CPGs Can Best Use Sales and Marketing Agencies in a Changing Environment; Bain & Company, Grocery Manufacturers Association, and ASMC Foundation, 2009.

Negative impact

-25

Selling costs

Merch Focus compliance on core

Out of stocks

Info. & insight

Profitability

SMA users’ top reasons for outsourcing retail (percentage of total reasons cited)

Chart 2

Benefits of Outsourcing Retail Activities

- 6%

Jeff Malowany, director of Canadian sales for CPG Church & Dwight Canada, uses brokers for both retail store and headquarters coverage. He cites several advantages, including return on investment, specifically from the retail side. “When I compare utilizing them versus the cost of managing my own sales force, we benefit from the synergies that they have by handling multiple principles at the same time,” he says. “We get more productive coverage for the same amount of dollars spent in that particular case through their syndicated model.” It’s a similar story at The Clorox Company of Canada, which uses brokers exclusively in some parts of the country, and in others, primarily for retail, says Todd Kelly, vice-president of sales.

30%

Source: Maximizing the Impact of Outsourcing: How CPGs Can Best Use Sales and Marketing Agencies in a Changing Environment; Bain & Company, Grocery Manufacturers Association, and ASMC Foundation, 2009.

The CPG perspective

Improve market coverage and distribution

company likes to have a strategic partnership with our clients relative to what may have been historically a tactical partnership, where we strongly believe we can contribute to organizational success. And it means more than just presenting products and presenting a deal; it means adding value to an organization’s strategy and value to an organization’s future and to its vision.” In addition to calling on the headquarter accounts, “Acosta is a big proponent of the independent grocer in this country,” says Dunne. And the brokers that call on the retailers live in the neighbourhood and shop at the accounts of the stores that they service, he adds. “I think it sends a strong message about our commitment to the retailer, our commit-

Increase speed to market & introduce new products

Reduce sales & marketing costs

Better execute promotional & merchandising activities

ment to the client, and, inevitably, our commitment to the consumer.” Retailers also benefit from the efficiencies of dealing with a broker. “When it comes to meeting with a number of small suppliers, we actually simplify their lives,” says Michael Aucoin, president of Advantage Sales and Marketing. “When one of our people goes in to meet with a retailer, they can be representing three, four, or five different clients in a meeting. And that’s a big time saver.”

Deciding factors

A 2011 U.S.-based study by investment bank Barclays Capital, titled “A Brokered Sales Network is Not a Broken Sales Network,” lists several reasons why some food manufacturers

“The broker brings scale, and therefore cost-effectiveness, coupled with deep knowledge and expertise in the marketplace,” he says. “So you get the best of both worlds with a broker in many cases, because they can leverage their scale with the customer for benefit that you couldn’t necessarily get on your own. They leverage that scale for efficiencies, especially at retail, which would be very difficult to capture independently. And third, they know the market and have relationships with the customers that go very deep and very wide.” On the headquarters side, it is the broker’s retail expertise that wins the day for Church & Dwight. Because brokers cover a number of product lines within a particular retailer, “they are able to cross multiple desks and face numerous business situations,” says Malowany. They can use their expertise to resolve problems because they have faced them before, he adds. “And because they do handle most lineups, they’re in the retailer more frequently at the headquarters level, and they are certainly able to build strong relationships with the various retailers around the country.”

December | January 2012

Going for brokers may want to move to broker-based selling, noting that “the benefits involved are not merely financial but also strategic in nature.” Those include cost savings, flexibility, and frequency and depth of coverage. “With the help of a third-party broker, a manufacturer could well maximize the amount of face- and in-store time it gets with its retail customers, in our view, which could help mitigate out-of-stocks, secure better shelf placement, garner more opportunistic end-of-aisle displays, etc.,” it states. Some would argue that representing multiple CPG companies can result in a loss of focus for an individual brand. As the Barclays Capital study points out, “an internal sales force would have the sole focus of that manufacturer’s portfolio, whereas the efforts are spread across multiple brands/clients for a third-party broker – a natural question for any manufacturer to consider . . . when evaluating a transition to outsourcing sales.” However, there is a convincing case to be made for bundling those brands together to create synergies for the retailer. For example, brokers can develop themed merchandising promotions involving several clients to create a unique in-store event, Dunne suggests. Working even more closely with retailers to increase labour efficiencies at store level is “an emerging trend in Canada,” says Davies. “Retailers have started to use third-party companies to do realigns and planogram resets. And that will continue,” he predicts. “It’s a trend that is really far along in the U.S., and I believe Canada is starting to follow now.” Progressive CPGs – even the largest – are working with sales and marketing agencies to tailor retail coverage for each merchant, season, and category, according to a 2009 U.S.-based study conducted by Bain & Company in conjunction with the Grocery Manufacturers Association and the ASMC Foundation. “Outsourcing at retail enables CPGs to take advantage of the efficiency of a shared labor force, achieve extensive cross-country coverage, maintain the flexibility to adjust to fluctuations in demand, and access leading technology,” it

notes. Participants in the study estimated that using an SMA for retail activities costs 23 percent less than employing a direct sales force. But even with those efficiencies, gone are the days when a company would say: “Here’s five per cent commission. Go sell my product,” says Davies. “Everything we do now, whether it’s headquarter or retail or analytics, needs to have a defined return on investment. I would say that’s the major change you would have seen in our business in the last two years.” The Barclays Capital study stops short of advocating a blanketed move towards broker models. After all, for some CPGs, a direct model still makes the most sense, while for others, a hybrid is the solution. Still, the study concludes: “There are compelling reasons why a broker might enhance one’s sales efforts, broadening reach and effectiveness of coverage – while, of course, also delivering some cost benefits along the way.” And as always, the broker community is in lockstep with the changing needs of both the retailers and the CPGs. “We’ve evolved from being value-added solutions providers, to deep analytical service providers,” says Davies. “That’s the way the industry is moving.”

There is a convincing case to be made for bundling those brands together to create synergies for the retailer. For example, brokers can develop themed merchandising promotions involving several clients to create a unique in-store event.

December | January 2012

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Thought Leadership: Collaboration

The Advantage Report:

what retailers want by sally praskey

Despite the best efforts of suppliers and retailers to work

collaboratively, grocery/mass industry relationships with major

Consumer Packaged Goods (CPG) companies have encountered strong headwinds over the past number of years, and those squalls seem to be intensifying.

That’s the conclusion of the latest edition of The Advantage

Report, an annual survey of major grocery/mass retailers conducted by Toronto-based Advantage International (see Chart 1).

Average Net Favourable Ratings

Chart 1 - Grocery/Mass industry relationships have been on a slow decline since 2008 31

28 27 25 N/A

2006

2007

N/A

2008

IndustryNF Trend (CORE: Grocery Mass Channel)

2009

2010

2011

Industry Average

Chalk it up in large part to the dismal economic climate. “There

have been a lot of changes in the environment,” says Dwight

Konings, director of client services, Advantage International. “The manufacturers are getting squeezed, and there have been

Net Favourable points (see Chart 2).

less. When times are tough, it becomes even more important for

retailers,” says Konings. “Their logistics expectations are going up,

cutbacks. They’re getting pressured to do a lot more with a lot suppliers to work more collaboratively with retailers.”

In a reciprocal report, The Advantage Mirror, manufacturers provide

feedback to retailers and distributors on their business practices.

While retailers have rated manufacturers less favourably in all

composites since 2008, logistics and supply chain management

has suffered the steepest decline in the last year, dropping by six

“Supply Chain seems to be increasing in importance for the

and if you don’t have that piece right, it seems to be spilling over and negatively impacting the overall relationship.”

Overall, retailers’ priorities for manufacturers are focused around

the business relationship (see Chart 3).

Meanwhile, executive/senior/category management personnel in

the grocery/mass channel are looking to manufacturers foremost to

December | January 2012

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Thought Leadership: Collaboration Chart 2 - Logistics and supply chain management under pressure 45 40

-4 -3

Average Net Favourable Ratings

-3

-6

-4

20 15 10 5 0 06 07 08 09 10 11

06 07 08 09 10 11

Overall Performance

Business Relationship

Manufacturer Personnel

Category Development

Consumer Marketing

Customer Marketing

Logistics and Supply Chain Management

Customer Service/ Support

Chart 4 - Retailer priorities for manufacturer support According to Executive, Senior and Category Management Personnel Grocery/Mass Channel

Chart 3 - Manufacturer priorities for retailer support Value

Rank

Priorities

Importance Rating

Priority Rank 2011

Implements agreed upon business plans

Provides appropriate investment level and flexibility enabling us to achieve planned objectives

Works productively with us to build profitable business for both parties

Understands and responds to the unique strategies and goals/needs of our company

Is a good company to do business with

Works with a sense of urgency to meet agreed upon deadlines

Agreed-to plan-o-grams and programs are executed in a timely and accurate manner in all retail stores

Works well with us/easy to do business with

Stores execute promotional and retail marketing plans in accordance with commitments

Works with us to develop category plans that help us build sustainable growth and profit relative to category expectations

help them achieve their planned objectives (see Chart 4).

Among inventory/logistics management, the top priorities are,

not surprisingly: Delivers complete orders/high per cent fill rate; and Delivers orders on time/at the time requested (see Chart 5). And there is plenty of room for improvement (see Chart 6).

Retailers cite six areas in particular where they see opportunity in

Retailers also call for open, early honest communication;

responsiveness to a special request; flexibility, especially in regards

to rush orders and order changes; consideration of their objectives, so both parties can achieve their goals; and competent personnel who are knowledgeable about the industry and the account.

The Report neatly summarizes a similar version of these opportu-

the area of inventory and logistics, starting with service levels.

nities for improvement into best practices for inventory and

order, and they want it to arrive exactly when they want it.

(see Chart 7).

Expectations are high: Retailers want to receive exactly what they

logistics. Again, an expectation of high service levels tops the list

December | January 2012

Thought Leadership: Collaboration On the flip side, manufacturers

are looking for a comparable show

of support from retailers. According to the Mirror Report, manufacturers’ priorities continue to be

“Implements agreed-upon business plan” and “Works productively with us to build profitable business for

both parties,” unchanged from the 2010 Report (see Chart 8).

Ironically, both trading partners

have similar goals and priorities, but many haven’t yet figured out how

to work together to achieve them.

Q&A

GB: What is The Advantage Report? DK: The Advantage Report measures the business relationship of grocery and CPG retailers and manufacturers on specific metrics. We receive feedback from over 500 head-office respondents, including executive, senior, category and inventory/logistics personnel, with an 89 per cent response rate in 2011. Participating retailers and distributors, which include Loblaw, Walmart, Sobey’s, Metro, Canada Safeway, Longo’s and others, rate the performance of suppliers on a range of business metrics. We also conduct follow-up interviews with almost 200 respondents to gain additional insight into the ratings.

Retailers said…

Thinking about the manufacturers that you consider best in class, what would you say is the main thing they do well that drives your high opinion of them?

“Best-in-class companies deliver orders on time and with a proper fill rate. Our customers need their product when they want it, not when the supplier deems it proper to send it. A company’s supply chain should meet our needs while being flexible enough to allow for a quick reaction to an unknown situation.” “The people they send to our meetings are empowered to make decisions.” “The companies that we consider best in class think about all areas of the business. It is not just about category management with them; it is about merchandising, finance, logistics and operations. Companies that understand all areas of the business and know to take unnecessary costs out of the business to improve sales will be the companies that succeed.”

December | January 2012

with Dwight Konings, Director of Client Services, Advantage International GB: Turnabout is fair play. Do the manufacturers have an opportunity to rate the retailers? DK: Yes they do. In a reciprocal report, The Advantage Mirror, manufacturers provide feedback to retailers on the business relationship. This closes the collaboration loop.

Founded in Canada in 1988,

Advantage International now

operates in 30 countries, with five

GB: How often is The Advantage Report conducted? DK: We conduct head-office assessments every year and extend that to store-level research every second year. If a manufacturer or retailer wants to participate in the study, they can contact me directly and I’ll be happy to provide more information.

more on tap for 2012. Its jointly

sponsored programs provide an ongoing industry benchmark

designed to enable retailers and manufacturers to measure,

track, and ultimately strengthen

their relationships with key business partners. For more information, contact Dwight Konings at 416-863-0685, ext. 215;

dkonings@advantagegroup.com

Manufacturers said…

Thinking about your customer(s) that you consider best in class, what would you say is the main thing they do well that drives your high opinion of them?

“The main thing that drives a high opinion is to clearly state their mission and tactics that we can use to help achieve their strategies and ultimately their mission.” “Having clear expectations and a clear business model communicated to the vendors.” “They build collaborative business plans with open communication and good execution. It is important to build the business for both sides and to do so in a profitable way; this cannot just be one-sided.”

Now, thinking of the customer(s) that you rated lower, what is the main thing they need to focus on to improve your perception of them?

“They need to improve communication and share information so that we can plan the business better.” “They need to be more concerned about what we bring to the overall category with insights and other value-added things. They are just concerned with us giving them more money.” “They need to improve their merchandising and store-level execution. A retailer can plan all they want, but they are only as strong as what we see on the floor.”

Thought Leadership: Collaboration Chart 5 – Retailer priorities for manufacturer support According to Inventory/Logistics Management Grocery/ Mass Channel Priorities

Importance Rating

Priority Rank 2011

Delivers complete orders/high % fill rate

Delivers orders on time/at the time requested

Delivers accurate orders

Understands and aligns with our key supply chain performance metrics

Provides timely, proactive communication about order status/adjustments/changes

Chart 7 – Best Practices Summary (Inventory and Logistics) High Service Levels are expected Top manufacturers forecast accurately and build sufficient inventories of product so they can have short lead times, and still consistently deliver the exact amount of quality merchandise requested at the time requested.

Chart 6 Retailer Suggestions for Improvement Opportunities (Inventory and Logistics) Service Levels need to be improved »» Retailers want to receive exactly what they want to order, and they want it to arrive exactly when they want to receive it. Communication is critical »» Open, early, honest communication with all stakeholders should be the goal if any potential issues arise. If a question is asked, a clear answer is expected within a few hours of the request. You are also encouraged on a timely basis to share accurate information regarding products and policies.

Consider the retailers objectives »» You are more likely to achieve your goals if you do it in a way that also allows the retailer to achieve their goals

Be responsive »» If a special request is made, be available to listen to the request and then provide a quick turnaround of the response detailing action steps to be taken.

Competent personnel exhibiting desired behaviours »» Make sure you are knowledgeable about the industry and the account and understand the customers processes and Key Performance Indicators (KPI). Make sure you make meaningful recommendations.

Be flexible »» If help is requested, then it is important to the retailer. Try to accommodate, especially in regards to rush orders and order changes. Strive to reduce lead times and allow for more flexible shipping schedules.

»» Get face time, and use the time productively. Focus on what is important to the retailer. If you make a commitment, ensure you keep it. Consider new ideas and take a leadership position in emerging initiatives.

Communication is critical Whether it is positive or negative, as early as possible, leading manufacturers openly and honestly share any news that may impact retailers’ business so the retailers are aware of and able to react to the situation. Plans change If the situation changes, those manufacturers who are able to be flexible and adapt to meet the retailers’ changing needs are perceived more favourably than those with rigid processes that do not allow for accommodation. The clock is ticking When an issue arises, retailers want to be able to reach someone who understands the urgency of the situation, is empowered to act on it, and is capable of resolving the issue without delay. Some companies have started customer service desks that are available seven days a week. Common goal High marks to those that work towards common goals that put the customer first and help build overall sales and profitability. Competent personnel exhibiting desired behaviours Companies ranked higher have professional, organized, knowledgeable, personnel with the confidence to make decisions and fix problems. They are accessible, proactive individuals who are empowered to work across an organization to support the retailers needs.

Chart 8 – Manufacturer Suggestions for Retailer Support According to Inventory/Logistics Management Grocery/Mass Channel Priorities

Importance Priority Rating Rank 2010

2011

Implements agreed upon business plans

Works productively with us to build profitable business for both parties

Is a good company to do business with

Agreed-to plan-o-grams and programs are executed in a timely and accurate manner in all retail stores

Stores execute promotional and retail marketing plans in accordance with commitments

December | January 2012

Eating Patterns in Canada

What’s for Dinner? An in-depth study asks Canadians what, when, where and how they are eating

Breakfast

Canadians are increasingly looking outside the home Foodservice is becoming a more important option for consumers in the hurried breakfast occasion. In the year ending March 2010, consumers reported that four per cent of their breakfasts came from restaurants. In the year ending March 2011, that number jumped to seven per cent, representing a substantial increase. Quick Service Restaurants have been a driver behind this shift, providing convenience and quality in their breakfast offerings. Many place a focus on coffee, which is central to breakfast and crucial in attracting consumers.

By Joel Gregoire, industry analyst, food and beverage, The NPD Group, Inc.

How do Canadians eat? This is the fundamental question that The NPD Group’s Eating Patterns in Canada (EPIC) report looks to answer. The aim of EPIC is to provide food and beverage manufacturers and retailers with a view into the kitchens of Canadians, and a holistic perspective on the latest top-line eating trends. It’s important to understand not only what consumers are eating or drinking within a specific category, but also the overall context in which specific foods and beverages are consumed. How do we know what and how Canadians are eating? In short, we ask them. Much of the data used in EPIC comes from National Eating Trends (NET), one of the services that NPD uses to track consumption behaviour. NET is continuously in field, and surveys approximately 1,300 households annually. When filling out a NET diary, respondents are asked for information on what they eat and drink, when and where they eat, who eats what in the household, and how the foods were prepared (among other questions). NET has been in field since 1998, so it provides a view on how eating behaviours have changed over time. Other NPD services also are used to provide additional perspectives on attitudes, diet status, and restaurant and snack-food consumption. When consumers eat, they often think in terms of meals rather than “categories.” With this in mind, much of the latest edition of EPIC is structured to provide a look at what’s important to Canadians as the “meal clock” ticks along throughout the day. Here are some of the latest trends in the Canadian eating environment. The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers and service companies rely on NPD to help them drive critical business decisions at the global, national and local market levels.

Joel Gregoire 38

December | January 2012

Lunch

Canadians are eating more leftovers The consumption of leftovers at lunch is growing. In the year ending March 2011, 28 per cent of lunches included a leftover, which is a steep increase from earlier in the decade and continues a prevailing growth trend in the share of lunches with leftovers. This represents an increasing need to provide the consumer with efficient meal solutions that allow them to not only stretch their dollar, but also make smart use of their time.

Dinner

There is a gap between the perception and reality of cooking from scratch Compared with 2006 through 2009, Canadians are preparing and eating more of their dinners at home. This is no surprise given the uncertain economy. But are they making more of their meals from scratch? Attitudes and behaviours on this question conflict. Over the past decade, consumers have indicated that they are preparing more of their dinners from scratch. At the same time, however, the share of dinners at home that include a “homemade” dish has remained relatively flat. This indicates that, while consumers increasingly “like” the idea of cooking from scratch, this attitude has not translated into the actual act. That means there is an opportunity for pre-packaged food manufacturers to provide meal solutions that offer consumers the convenience they have come to expect, while also allowing them the satisfaction that comes with participating in a “home-cooked” experience.

Eating Patterns in Canada

8:00am 922,035 854,212

817,958

956,697

871,861

7 % 4

YEAR 07

4 4 4 4

3 3 3

4 Left source: The NPD Group/ National Eating Trends – Canada

YEAR 01 02 03 04 05 06 07 08 09 10 11

Total Commercial Foodservice Market at Breakfast

Right source: The NPD Group/ CREST – Canada

Share of Breakfasts Sourced From Restaurants

12:00pm % 37 % 23

22 21 21 22

26 24 24 26 26

YEAR 01 02 03 04 05 06 07 08 09 10 11

% 72 70

70 70 68 68

Percent of Dinners Prepared and Eaten at Home

36 34

35 33

32 32

Percent of Lunch Meals that Include Sandwiches

57 57

YEAR 01 02 03 04 05 06 07 08 09 10 11

6:00pm

69 67

YEAR 01 02 03 04 05 06 07 08 09 10 11

Percent of Lunches That Include Leftovers

Source: The NPD Group/National Eating Trends – Canada

41 43 44 37 38 38 40 34 32 32 31

56 54

54 54 54 53

# 40 40

41 39

42 39 39

01 02 03 04 05 06 07 08 09 10 11

Percent of Respondents Who Indicated eight or More of the Last 10 Dinner Meals Were Made From Scratch

Percent of Dinner Meals Where the Main Dish is Identified as Being Homemade

Number of Dinner Meals Eaten Annually Identified as Having a Spice or Seasoning

Source: The NPD Group/National Eating Trends – Canada

December | January 2012

Profile

THE VILLAGE GROCER

Welcoming signage is reminiscent of the architecture of Spanish Bay Inn at Pebble Beach.

Serving up old favourites in new digs

Having outgrown their original space, Evan and Cathy MacDonald took their top-quality foods and friendly service to a spacious, yet cozy, new location. By Kim Laudrum

December | January 2012

To commemorate 25 years serving the community in Markham, Ont., Evan and Cathy MacDonald, proprietors of The Village Grocer, bought several acres a few blocks away from their leased and tiny location on the town’s quaint Main Street. They built a 30,000-sq. ft. gem of a store, then packed up last July and welcomed customers at the new location four days later. With them, they brought the charm that made The Village Grocer a popular upscale destination among shoppers in a community that has tripled in population – to almost 300,000 – since Evan and Cathy first dreamed of starting a grocery business in 1985. Evan then worked as a buyer for Loblaw Companies Ltd. “I realized the big fun in the business was to be had on the other side of

the desk,” he says. Those salespeople were closer to the food: they had been where it was grown, and they knew who grew it, how they grew it and why, he adds. “Evan’s really creative,” his wife Cathy enthuses, “and he has a great love of food.” He says he wanted to make real decisions about the food he was buying. Opening the couple’s own grocery store in 1986 made that possible. “I like knowing who I deal with for the products we choose to sell in the store,” says Evan. “We source according to the finished product we are looking for.” The Village Grocer’s lamb, for example, is raised at Forsyth Farms, where it is held back and aged longer at Evan’s request. The result is a more-tender, milder-tasting lamb. “Buying Canadian is important, but it’s only now becoming more viable,” notes Evan.

Profile The store’s in-house bistro and café is a popular community hub. Renowned for its bakery, The Village Grocer provides cakes, pies and cookies to 40 other grocery stores in the area. The store boasts more than 80 country-pine shelving display units, while hundreds of baskets hang from the ceiling to create a cozy ambiance. The large pine and white gazebo houses the floral department.

Trends are changing, he adds, and consumers are more aware of environmental and healthy choices. “You have to be more educated about your buying. At the same time, growers and farmers are also becoming more educated and responsive to consumers’ needs.” For example, free-range turkeys sell out quickly in season at The Village Grocer. To ensure the highest quality possible, Evan oversees the cooking, smoking and preparation of all meats at their commissary, currently located off-site but soon to be moved to the new location at 16th Avenue and Kennedy Road. The larger location allows them to bring the commissary, bakery and Village Kitchen all under one roof. Renowned for its delectable high-end bakery, The Village Grocer provides

cakes, pies and cookies to 40 other grocery stores in the area. But it’s the Village Kitchen that operates as the heart of the store. Here, healthy, additivefree meals are prepared daily. Bushels of fresh butternut squash are peeled and added to home-made stock for one of the store’s signature savory soups. Since its inception, The Village Grocer has offered high-quality prepared meals, some based on the comfortfood recipes of Cathy’s mother, Doreen Parker. Standards like chicken pot pie, chili sauce and fruit cake proved so popular that half of Village Grocer’s staff of 120 today is engaged in making 400 or 500 SKUs right in the building. Close to 40 per cent of the store’s business now is represented by food prepared on-site, says Evan.

Cathy and Evan MacDonald, “The Village Grocers”

December | January 2012

Profile “It’s old-time food done well,” as Evan describes the Village Kitchen fare. “That’s our niche; that’s our value proposition. It’s one of the things that sets us apart from the competition and makes us difficult to compete with.” It’s an interesting strategy in an area that originally was settled by United Empire Loyalists in the late 1700s and is now one of Ontario’s most ethnically diverse cities, with 55.5 per cent of the population representing visible minority groups. Cathy points out that there are several supermarkets in the area catering to the Asian food market. “You can’t be everything to everyone. Our customers really like what we offer. Our pastries and cakes, for example, keep them coming back.” Asked what the store’s loyalty program is, Evan says simply: “Friendliness.” Apart from a deal on coffee for

frequent buyers in the store’s 20-seat café, thoughtful customer service is what shoppers really want, he says. Evan composes the weekly black-andwhite flyer promoting the store’s specials, which run from Thursday through Sunday. He says he writes it in the first-person, often mentioning what his family likes, because it connects with customers. As for social media, Evan jokes, “We’re dinosaurs.” But it’s an area they might encourage their three children – ages 21, 15 and 10 – to help with this summer. After all, the kids grew up in the business and know it well. This family-run business is successful because of its small-town feel in an urban setting. The MacDonalds have carved their niche by meeting customers’ needs for quick, friendly, convenient shopping for healthy, quality-made foods.

The store Inspired by the architecture of the Spanish Bay Inn at Pebble Beach, Evan MacDonald oversaw every last detail of The Village Grocer’s new design. The result is an attractive 30,000-sq.-ft. building, professionally landscaped,

December | January 2012

with 79 parking spots. Decked out in holiday style with pine boughs and dogwood branches, the store invites shoppers to explore inside. The deli counter beckons customers at the store’s

entrance, enticing them with savoury sausages, hams, bacon and cold-cuts made to Evan’s exacting specifications. These became such popular items that the MacDonalds say they needed a bigger store to accommodate the demand. The retail space, at under 10,000 sq. ft., is still relatively small for a city of almost 300,000. It’s a distinction The Village Grocer uses to its advantage. Unlike the mainly cavernous supermarkets in the area, the store offers an intimate shopping experience. Hundreds of baskets hang low from the ceiling, for example, creating a coziness that bigger stores

The Takeaway 1. Create a niche in the marketplace Visitors from a 30-kilometre radius frequent The Village Grocer for its baked goods and additive-free prepared meals. Find what customers want and do it well. 2. How to compete with competitors Don’t compete with them. “We can’t be all things to all people,” Cathy MacDonald says. As one of the most diverse cities in Ontario, Markham boasts several stores that cater to the ethnic market. The Village Grocer targets the rest.

can’t replicate. Unlike nearby supermarkets, The Village Grocer locates fresh produce at the back of the store. The selection isn’t broad, but the essentials and seasonal items are excellent quality. More than 80 country-pine and forest-green shelving display units, which Evan says they made themselves to recreate what worked best at the old location, are well stocked. Alongside these are the meat and seafood counters. A large pine and white gazebo houses the floral department and is a sight line to the cashiers. It also provides the perfect setting for the store’s in-house bistro and café.

3. Understand your value proposition “Our customers aren’t necessarily foodies,” Evan says. A top chef recently told him that the most requested meals in even the most sophisticated and expensive restaurants are still old favourites— mac and cheese or chicken pot pie. 4. Offer top-drawer customer service The payback will be loyal customers who value what your store can bring to their shopping experience.

Active seniors, soccer moms, teens from the school next door, and some businessmen drop by to pick up hot and cold lunch entrées or sandwiches during the day. The regulars linger in the wicker chairs and catch up on events. It’s a community hub. Upstairs are the MacDonalds’ offices. It’s also where they hope soon to open The Village Grocer’s cooking school. For now, floralarranging demonstrations are held there. On the lower level, The Village Kitchen, the bakery, the coming commissary and a yoga studio account for about 14,000 sq. ft.

Category Report: Coffee

Coffee Klatsch c o f fe e s a l es a r e st e a m i n g h ot by k i m l a u d r u m

anadians just have to have their morning java jolt. How else to explain that, despite a historic rise (16 per cent) in commodity pricing for coffee this past year, unit sales notched up six per cent? “Canada is the fastest-growing traditional import market in the world for coffee,” says Sandy McAlpine, president of the Coffee Association of Canada. Coffee manufacturers are providing a higherquality product now, and consumers are much more “coffee-centric,” he says. Maybe it’s the colder climate, but Canadians drink more coffee per capita than Americans do. In fact, only the Italians consume more coffee in restaurants than we do. So when McDonald’s and Tim Hortons began serving espresso-based drinks in Canadian restaurants this past November, grocers prepared themselves for a jolt of a different kind. Could this be the escalation of a trend toward increased morning coffee consumption away from

home? If so, what impact might that have on grocers’ ability to encourage shoppers to bring home the bacon, eggs, cereal and other items traditionally associated with the first meal of the day? There are grounds for concern. According to Joel Gregoire, industry analyst, food and beverage, The NPD Group, as of the year ended March 2011, Canadian adults said they were getting eight per cent of the breakfasts they eat from a restaurant. While that may not seem like much, it’s a sizable increase over the previous year’s five per cent, notes Gregoire. Fortunately for grocers, translating that restaurant experience to the at-home market became possible a few years ago when new singlebrew espresso machines entered the market, offering the high temperatures and simplicity of operation needed to allow home baristas to serve espresso, cappuccino, and skinny lattes. This trend is one of the reasons coffee manufacturers who provide pods or disks for single-brew espresso machines are so encouraged. “We believe this market is just going to explode,” says Doug Pritchard, marketing director of coffee, Kraft Canada. Single-brew household penetration in Europe is at 25-35 per cent. “We expect to

December | January 2012

Category Report: Coffee CAFÉ ASSOCIATION DU CANADA

On Demand continues to gain in importance R&G (+16%) 70.2%

COFFEE ASSOCIATION OF CANADA

THE COFFEE ASSOCIATION OF CANADA ENDORSES enhancing the coffee beverage experience by providing members and consumers with opportunities to improve coffee beverage knowledge and skills. The Association’s core responsibility is to serve as industry advocate and spokesperson.

Instant (0%) 19.5% On Demand (+141%) 10.3%

CAC also works with government to ensure policies and regulations do not provide competitive disadvantages, while providing consumers with accurate information on coffee beverages.

Source: Nielsen MarketTrack, National TL GR+DR+MM+GM+WC, Latest 52 Wks ending August 20, 2011

see that same kind of penetration in Canada. Right now, we see the single-serve brew market at 13.5 per cent of overall coffee sales,” says Pritchard, citing Nielsen stats. “But we expect that to be 20 per cent in 2012 and 30 per cent in 2013.” For the consumer, the value proposition is compelling. A single-brew cup of coffee using the Tassimo system costs between 40 and 50 cents a cup; a specialty espresso beverage costs $1. Compare that with a visit to a high-end coffee bar, which can cost around $4, and it’s easy to see why single-serve is exploding at 143 per cent, according to Robert Carter of The NPD Group. So who’s buying these proprietary systems? Carter notes that the trend is skewing towards those families with $100,000 or more in household income. Consumers like them because of their ease of use and perceived cost-per-cup value compared to consumption at out-of-home coffee bars. In our Tim Hortons coffee-and-donut culture, with the growing household penetration of single-serve systems and the popularity of hot specialty coffee, grocery retailers finally have a real opportunity to counteract the shift to breakfast-on-the-go while taking advantage of the fact that Canadians love their morning coffee. And many

Pod Cast Pods, capsules and disks each belong to proprietary systems, and you need to match the coffee delivery method with the proper machine. Four platforms that are emerging as leaders: Tassimo system is made by Bosch and supported with T-disks available from Kraft. Brands include Nabob and Maxwell House, as well as Cadbury Hot Chocolate and a new Twinings Orange Pekoe tea Keurig offers 247 varieties of K-cups from coffee suppliers Van Houtte, Green Mountain and Timothy’s, among others NEspresso offers various brands available in pods online Dolce Gusto, a partnership between system manufacturer Delonghi and coffee provider Nestlé, offers capsules

Demo This!

Set up a coffee demonstration area to show customers how easy the systems are to use, and ask them how they like their coffee. It will give you a good idea of what products are in demand in your store. Plus the aroma of fresh coffee is enticing.

December | January 2012

w e N 0 Calorie Sweetener

Suitable for individuals with Diabetes

Available in 2 sizes

Packets & Granulated Follow us on (@EqualCanada) and on for the latest news, recipes and store locations. For more information go to www.equal.com/canada ÂŠ2011 Merisant Company 2, Sarl. Equal is a reg. TM of Merisant Company 2, Sarl.

Category Report: Coffee

consumers are exposed to cartridge coffee systems in the workplace, so are interested in replicating the convenience they offer in their own homes. But as McAlpine observes, “The single-serve market is not without its challenges for grocers because once a consumer buys a platform that is proprietary, your grocery store had better have the capsules or cartridges for that platform, or the customer might change their shopping habits and look for them elsewhere.” Still, the single-cup phenomenon is promising because it gives manufacturers and grocers a new value proposition, says McAlpine. “You can sell coffee at a significantly higher cost per serving, and the consumer continues to perceive incremental value.” But before you do a complete reset of your grocery aisle, it’s interesting to note that there’s growth news for regular drip coffee manufacturers as well. Roast and ground account for 70.2 per cent of the coffee category, and their share of the overall beverage market in Canada is growing at 19 per cent, with sales of $678 million, according to Nielsen. So while the single-serve market is the new news in the category, there is still significant demand for traditional coffee formats. For example, while single serve is approaching 20 per cent of dollar sales, the tonnage represents only five per cent of the category, according to Ian Buckingham, vice-president of sales at Melitta Canada. Whole bean is still a profitable category, and serves the needs of consumers who prefer to grind their coffee fresh for their Bodum or Melitta “Ready Set Joe” coffee makers. As high-end cafés have discovered, the consumer still finds cache in the freshly ground option, particularly when it comes to origin coffees.

Instant Coffee Sales

Sluggish

Defying a trend to co nvenience in just ab out every category in the store, sales of instant coffe e saw an increase of only on e per cent. Despite the introduc tion of high-end ins tant coffee packets at Starbucks , this is one conven ien ce trend that has yet to mak e an impact in the grocery aisle. Interesting fact : Canadians consum e about double the amount of instan t coffee that Ameri cans do.

Canadians Consume Coffee 66% of the Canadian population reported drinking a cup of coffee yesterday. 80% of Canadian coffee drinkers said they consume most of their coffee at home. 20% of Canadian coffee drinkers drank a specialty coffee within the past week.

33% of young adult coffee drinkers drank a specialty coffee in the past week. This is especially true for 18- to 24-year-olds who favour iced, cold or frozen cappuccino. 10% of women report drinking decaffeinated coffee over the past month, a decline of three per cent. Quebecers are the biggest consumers of lattes and espressos among regions in Canada. Source: “The 2011 Coffee Drinking Trends Study,” Coffee Association of Canada

Coffee as a Commodity Last year, 134 million bags of green coffee were produced worldwide – a bumper crop. But increasing demand from emerging nations, in particular Brazil and India, dwindling new acreage to grow coffee, and investors seeking higher returns from commodities while turning away from low-yield treasury bonds during global economic uncertainty, have all contributed to higher than usual green coffee prices. “It’s not my role to be bearish or bullish about the coffee market,” said Sandy McAlpine president of the Coffee Association of Canada, at the organization’s conference in October, “but supply and demand are poised on a knife-edge. A blip in any major producer would have a major impact on the market.”

McAlpine pointed out that raw coffee is up 8.9 per cent in volume, and 16 per cent in dollars. “And we’ve seen a 19-per cent growth in price,” he noted. Tonnage is up as well, although modestly. “Green coffee prices remain increasingly stable at traditionally quite high prices,” McAlpine told Grocery Business. “The last time prices were this high, this coffee-centric group of consumers didn’t exist. This whole focus by the consumer on single-origins, or a high-quality coffee, is new this time around. We are very gun-shy that there will be a consumer pull back, but I think the culture has changed. People’s expectations about coffee have changed.”

December | January 2012

Rock‘em, Sock’em Grocery Shoppin’

Loblaw’s flagship supermarket in historic Maple Leaf Gardens is in a league of its own By Noelle Stapinsky

It’s a crisp December morning in downtown Toronto and there’s a red carpet rolled out over the sidewalk in front of the historic Maple Leaf Gardens. Hundreds of people are lined up for as far as the eye can see – some apparently waited through the night to be at the front. Security and police are on guard to keep order, while throngs of reporters and camera crews battle it out for prime spots on the street. The hum of anticipation coming from the crowd suddenly spikes when they get a brief glimpse of – Galen G. Weston. Hold on…what? The legendary arena has been reopened, but as a destination for foodies, not sports fans. This is the new home of Loblaw’s highly anticipated flagship supermarket. Weston, executive chairman of Loblaw Cos. Ltd., along with his top team broke bread in the store’s foyer to signify the grand opening, right before they pulled back heavy red velvet curtains for the big reveal of the interior – prompting jokes about the colour of the curtains being blue, since this is the former home of the mighty Maple Leafs. This isn’t just any supermarket, claims Weston. “It’s the world’s best supermarket.” Of course, it’s nowhere near a traditional grocery layout of aisles upon aisles, flanked with cold bunkers. This store resembles more of a food emporium or a super-chic marketplace. “This location takes inspiration from the powerful architecture of the building itself,” says Weston. “The look is intended to be simple and timeless, but at the same time putting food at centre stage.” 48

December | January 2012

The produce department as seen from the second floor commissary

Judging by the reaction of the consumers at the store, the event was more like a gala with Weston as the star attraction – if he stood still for even a moment, a line up of grocery groupies would form to get his autograph. The first thing you notice when entering the store is a maple leaf constructed of reclaimed stadium chairs mounted on the original concrete wall, which still shows the grooves where staircases used to reside. There are escalators that lead up to a Joe Fresh, a liquor store, and a cooking school where up to eight people can book to learn from an executive chef. “We wanted to keep the nostalgia of the building – keeping the original wall and making a maple leaf from stadium chairs,” says André Fortier, senior vice-president of concept rollouts for Loblaw. All of the prepared foods are made in-house in a loft-style This store kitchen that overlooks the marketplace. “There are more than resembles more 300 recipes used to create of a food breakfast, lunch and dinner, and all emporium or a the ingredients are from the store super-chic and cooked here,” says Fortier. marketplace. Sushi lovers can grab a seat or take some to go at the 16-foot

Ace Bakery breads are given a high profile and situated next to the Wall of Cheese

Reclaimed stadium seats re-imagined as a maple leaf

P H O T O G R A P H E R A lanna G licksman

The famous Wall of Cheese

sushi bar run by Loblaw-owned ethnic foods specialist T&T Supermarket. There is seating on either side of the bar, which is surrounded by products related to Asian cuisine. “We focus on the products,” says Fortier. “It’s a food experience… a food theatre. In theatre, there is always one primary act that is in the spotlight. The way I built every offering was by looking at which product I wanted to make a statement with.” The market area resembles more a fine jewelry store with sparkling glass cases and food placement; it’s like the art of plating fine food in a four-star restaurant, but in a retail application. Each section is specialized – there’s a dedicated counter for just prosciutto – and each has a star product on display. The cheese selection is that of a fromagerie, showcasing 100-year-old Stilton and a five-metre-tall cheese wall packed with a plethora of options. There are even cheese experts on hand to educate consumers and help them with their orders. An Ace Bakery – which became part of the Loblaw family within the last year – located under the kitchen has bakers producing more than eight different bread products, fresh, daily. Upstairs in the loft kitchen, more than 30 staff are diligently working. Vittorio Colacitti, head chef and right-hand man to executive chef Mark Russell, explains that everything is made on-site, and they will produce according to consumer demand.

The 2,000 sq.-ft. kitchen is equipped with a blast chiller that cooks massive amounts of proteins and vegetables and chills them to temperature, so they can be put in the retail fridges and displays immediately. “We can do anything up here,” says Colacitti. “There is no day-old food sold. We base our production on volume and keep it tight. The chances are good that we’ll be selling out of food every day.” Back down on the retail floor, Fortier smiles and says, “The good thing about having the kitchen on the second floor is that all the aromas go down to the store level.” What makes this store unique, according to Fortier, is the statement it makes. In the produce section, for example, there is a huge focus on organic. Clearly labelled above each offering, the fruits and vegetables have their own sections. The island displays are an explosion of colour, offering every variety of produce on the market. The aisles, which are similar to those of traditional stores, have a clean, edgy design to them, with a break in each where books, kitchen supplies and gifts are displayed. “The layout is designed to understand that today’s hurried, urban shopper visits the store at different times with different needs,” says Weston. “The store provides shopping zones to serve those needs and self-checkouts, putting the customer first in every circumstance.” During the renovations, the floor was raised considerably to allow for an underground parking garage. But in one aisle, customers can still locate centre ice – a blue circle on the floor marks where many historic face-offs occurred. To keep the nostalgic flavour of the building – this is, after all, where the Leafs won many Stanley Cup championships (at least until 1967), Elvis performed, The Beatles made tour stops, and many professional boxing matches occurred – images are displayed throughout the store as décor. At every turn, there’s a food experience to be had, such as the Tea Emporium or chiseled fresh chocolate and a wall of cupcakes. The site also houses a full pharmacy and medical clinic. By tapping into the diversity of major cities and the evolving urban shopper, Loblaw is taking grocery retailing to a new level. And as it plans to use this concept for future urban locations, the possibilities look endless. December | January 2012

BIG BRANDS

FOR SPRING

CLEANING SEASON

Shelf Life: Spring Cleaning

Easy Being Clean Consumers are still going for green in the household cleaning category, but value and convenience also play a major role in product selection. By Emily Gravelle

Hard hit by the recent weak economy, many consumers have changed their shopping habits. Although value may be the strongest driver when choosing household cleaning products, the green movement is still very much alive. “Retailers may be looking at green cleaning as something that was big a couple of years ago, but lost momentum after the economy went south,” says Todd Kelly, vice-president of sales at Clorox Canada. “Yes, consumers are seeking value, but there is still that concern for the environment that isn’t going away.” Suppliers are taking note. Kruger Products, for example, which produces premium paper products such as SpongeTowels paper towels and the EnviroCare family of products, recently launched its first sustainable development program, Sustainability 2015. The initiative identifies nine specific objectives and targeted improvements to achieve by 2015 based on 2009 benchmarks. “These objectives include: reductions in energy and water consumption, greenhouse gas emissions, waste and packaging, as well as improvements in logistics, fibre and the number of third-party certified products offered,” says Steven Sage, corporate director, sustainability & innovation, at the Mississaugabased company. “We achieved our first target

in early 2011, becoming the first Canadian tissue manufacturer to achieve Forest Stewardship Council certification by the Rainforest Alliance.” Clorox Canada has seen significant growth in its Green Works line since launching it in 2008. The brand, which includes products that tackle nearly every surface of the house from glass to bathroom, aimed to develop a line that would perform just as well as chemicalbased cleaners, but be safe for both the environment and in the home. “We chose not to test Green Works against other natural cleaning products, but against the ones that had chemicals in them,” says Kelly. “We found that Green Works performed equal to or better than our existing brands and competitors.

According to Eric Green, president of IQ, which makes ecologically sustainable cleaning products, if you are going to convince anyone to pick up a new brand off the shelf, particularly if it is positioned as a greener alternative, you must show that it is different, that it is going to perform well, and that it is better than what they are already used to purchasing. “However, they are not willing to pay more for it,” he says. Sage concurs, and says consumers continue to seek premium-quality products that offer good value. “They’re looking for value in the paper products they purchase. Larger-pack sizes continue to grow in all categories and we are seeing a shift to larger roll sizes, including double rolls and larger,” he says.

Value and Convenience

Value is more than just price; it’s how much consumers feel they are getting from their product, says Victoria Maybee, external relations manager for Procter & Gamble. “Canadians want products that work for them, work the first time and are affordable,” she says.

Nielsen data confirms that for the 52-week period ending October 22, 2011, dishwasher cleaners were up 33% from the same period a year earlier.

December | January 2012

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Shelf Life: Spring Cleaning

new and now There has been significant growth in the past few years within the dish category, according to Maybee, especially during the tougher economic times. “It is because Canadians are spending less time eating out and are choosing to dine in. As a result, they have more dishes to clean,” she says.

Merchandising It Todd Kelly - Clorox

The green cleaning segment saw some unique innovation with the launch of IQ cleaning products in March of 2011. The non-toxic surface cleaners allow consumers to purchase the bottle once and then refill it using their own tap water and a small cartridge containing a concentrate. Eric Green, president and founder of IQ, says that North Americans consume nearly a billion plastic bottles from cleaning products per year. Stocking shelves with IQ refill cartridges cuts down on shipping costs, carbon footprint, and shelf space.

The cleaning category is huge, and can be complicated for both the retailer and consumer. “Set the section as clear as possible so the shopper knows what they need and where to find it,” says Kelly. “We look to do that in terms of rooms and occasions. Bathroom, for example, would include mould and mildew remover, toilet bowl cleaners, etc.”

Clorox is launching a new product called Liquid-Plumr Double Impact. “What sets it apart from our current products and competition is that we include a plastic drain snake with the product,” says Todd Kelly, vice-president of sales.

Cross-promotions are the key to success in this category. “Most cleaning products, other than wipes, require something like a bucket, sponge or mop to utilize their benefits,” he says. Include, for example, paper towels or J Cloth products with trigger sprays. Finally, remember seasonality. The two biggest seasons for cleaning are spring and fall. Also keep in mind that cold and flu season is a time when the retailer should focus on products that disinfect the home.

Eric Green - IQ Cleaning Products

“Try having a sub-section within your regular cleaning section that contains environmentally-safe products. Then create a more ‘shoppable’ experience by providing education to help your consumers make more informed choices,” Eric Green advises.

Victoria Maybee - Procter & Gamble

Consumers are looking for simplicity in all aspects of their lives, including their shopping experience. “Drive that extra basket item by cross-merchandising,” suggests Maybee. “You can feature dish detergents like Dawn and Cascade together, but make sure if you do cross-merchandise that it makes sense.”

Febreze is introducing a car freshener in February that offers technology based on Febreze Set & Refresh. The product simply clips onto the car vent. The membrane of the car freshener stays saturated in scented oil that lasts up to 30 days.

December | January 2012

Bravo!

Grocery Innovations Canada 2011

The Canadian Independent Grocer of the Year Award Winners

Large Surface Awards

gold

bronze

silver Doug McGillivary (General Mills Canada), Ken Schley, John Briuolo (Quality Foods Courtenay, Courtenay, BC)

Doug McGillivary (General Mills Canada), Alain Gagne (IGA Des Sources, Quebec City, QC)

Medium Surface Awards

Doug McGillivary (General Mills Canada), Rob Groves, Steve Vetrecin, Anthony Longo, Brad Boin (Longoâ&#x20AC;&#x2122;s Maple Leaf Square)

gold

bronze

silver Brooke Kynoch, Linda Kynoch (Safety Mart Foods, Chase, BC) and Ed Holik (Ready Bake Foods)

Ed Holik (Ready Bake Foods), Daniel Plouffe (Metro Plouffe de Sherbrooke)

December | January 2012

Ed Holik (Ready Bake Foods), Gary Kadonoff, Chris Kadonoff (Port Carling Foodland)

Grocery Innovations Canada 2011

Small Surface Awards

gold

bronze

silver Dan Stezenko, Steve Fox (Nestle Canada), and David Stezenko (Quality Market, Campus Hill, Thunder Bay, ON)

Colby Woodhead, Annette Woodhead (Blind Bay Village Grocer, Blind Bay BC), Steve Fox (Nestle Canada)

Specialty Awards

Steve Fox (Nestle Canada), Michel Vincent (L. Dufresne and Fils Ltee, Val David, QC)

gold

silver

Mark Ayer (Procter & Gamble), John Visconti and Staff (The Market by Longoâ&#x20AC;&#x2122;s, King St. West, Toronto, ON)

bronze

Peter Shin, Mark Ayer (Procter & Gamble), Chris Heo, Harry Park and Joe Kim (Galleria Supermarket, ON)

Mark Ayer (Procter & Gamble), Ingrid and Will Willemsen (Sunrype, Sarnia, ON)

December | January 2012

Grocery Innovations Canada 2011 The Arnold Rands Heritage Award Winner

Bravo!

Jeff Rowe, Shannon Forner (Valu-Plus Foods, Keremeos, BC) and Tim Berman (VP of Sales for Kraft Canada)

Canadian Independent Grocer of the Year Hall of Fame

Blair Ruelens, VP of National Sales, Pepsico Foods Canada, Vince Piligra and Rocco Agostino (Longo Bros. Fruit Markets)

Blair Ruelens, VP of National Sales, Pepsico Foods Canada, Dave Carbone and Staff

Blair Ruelens, VP of National Sales, Pepsico Foods Canada, Doreen and Steve Sharpe (Sharpe’s Food Market, Campbellford, ON)

Canadian Federation of Independent Grocers Life Member Designation

Cori Bonina (Stong’s Markets), Peggy Hamilton, Life Member (Hamilton, IGA), Frank Lovsin (Freson Market Ltd.)

December | January 2012

Terry van der Leest, Steve van der Leest, Life Member (Overwaitea), Cori Bonina (Stong’s Markets)

Cori Bonina (Stong’s Markets), Peter Knipfel, Life Member, and Bob Krupp (The Chesley Grocery Store)

Grocery Innovations Canada 2011

Top 10

Innovative Products at Grocery Innovations Canada 2011 GIC was also the occasion for CFIG to announce its “Top 10 Innovative Products” for 2012. Retailers at the show cast their votes, after having had the opportunity to test and review hundreds of new products for the coming year. Products were evaluated based on three criteria: most unique, most buzzworthy and best consumer response. And the winners are . . .

Nestlé Personal-Sized Ice Cream (Nestlé)

Country Comfort Grilled Cheese Sandwich (The Dunbar Food Group) N’Take EcoDurable Bags (N’Take Inc. EcoDurable Products)

Bisquick Shake’n Pour (General Mills Canada)

Gatorade Recover (Pepsico Canada)

AquaHydrate Purified Water (Les Aliments Unique Foods)

IslandWay Sorbet (IslandWay Sorbet Canada Inc.)

VISIONLINK Security Monitoring Systems (VISIONLINK Security Inc.)

Natrel Dark Chocolate Milk (Agropur Cooperative)

Toschi Gelato (Alfa Cappuccino Imports Inc.)

December | January 2012

Grocery Innovations Canada 2011

On the

tradeshow floor

December | January 2012

International: Drake

DRAKE SUPERMARKETS Adelaide, Australia

Roger Drake has parlayed a tiny grocery store into the largest independent supermarket chain in Australia By Sally Praskey Roger Drake is determined that the eponymous chain of supermarkets he founded 38 years ago will remain a family business – so determined, in fact, that he has a provision in his will that the company cannot be sold as long as it is profitable. So far, so good. Drake’s retailing philosophy is simple: “Get big, get small, or get out,” he told attendees in his presentation at the 2011 Grocery Innovations Conference. He chose to “get big.” Drakes is now Australia’s largest independent grocer, with 48 stores, 4,500 staff, and a turnover of more than AU$800 million (C $832 million) annually. That’s an impressive achievement for a young man who purchased his first store in 1974, a three-lane supermarket with four employees. As a first-generation family business in a market dominated by corporate behemoths “Woolies” (Woolworths) and Coles, whose 6,500 stores grab 23 cents of every dollar, Drakes retains its competitive edge by focusing on staff training and development, an expanded socialmedia presence, innovation, and customer-service initiatives. Drake describes the company as “a family business with family values, run as a corporation.” A registered training organization, Drakes offers certificates in several areas, as well as a Retail Executive Program. Thirty employees earned that diploma in 2009, the first in Australia. A trendsetter in many ways, Drake makes every effort to stay ahead of the technology curve. For example, in 2010, Drakes became the first independent supermarket chain to introduce self-checkout, which he

Roger Drake

says now accounts for a whopping 20 per cent of the volume in one store. “And it’s the older people who are using it,” he adds. The chain also offers online shopping, which Drake says “is not big for us, but you’ve got to have it.” The Drake App for mobile phones allows customers to search for stores, view flyers and access information on contests, specials, and job openings. While Drake is not yet convinced of the business case for social media, he acknowledges that “I know we have to be there for the future.” The chain now has more than 6,000 Facebook “friends” – and growing. Drake personally responds immediately to customer comments and questions, and ensures that the appropriate store manager follows up. Drakes also uses Twitter to communicate with its followers about specials, contests, articles about the company and other topics of interest. In one tweet, it offered a chance to test-drive the “VIP Trolley.” The company is piloting 40 of these shopping carts, which allow customers to track products by aisle, scan prices, and receive alerts on in-store and flyer promotions as they move through the store. Like most successful entrepreneurs, Drake spends much of his time in-store. After all, he says, “It’s on the shop floor where all the good ideas come from, not the head office.” December | January 2012

Celebration

A NIGHT TO REMEMBERâ&#x20AC;Ś October 20, 2011Â Michael Marinangeli, an industry veteran, retires from United Grocers Inc.

BACK; Chris Marinangeli, Joe Marinangeli, Gerry Sparling, Andrew Marinangeli, Ted Nielsen FRONT: Gail Ouellette, Valerie Sparling, Donna Nielsen, Debbie Marinangeli, Michael Marinangeli, Geoffrey Marinangeli, Sayaka Sugimoto

Blair Ruelens, Pepsi Co Canada, John McClelland, Kruger , Ward Hanlon, Canadian Federation of Independent Grocers

Michelle Scott, Grocery Foundation, Al Mattison, Steve van der Leest, Overwaitea Food Group

Michael Marinangeli, Frank Grande, Grande Sales and Marketing

December | January 2012

Pascal Beauchemin, Doug McGillvray, General Mills, Steve Fox, Nestle Canada, Allan Bordeleau, Overwaitea Food Group

P h otograp h er : C h ristop h er S cott

Michael Marinangeli, Denis Gendron, UGI

Standing ovation from the dinner guests

Jim Slomka, Clorox Canada

Mike Adcock

Earl Near

Steve van der Leest, Overwaitea Food Group

Anthony Longo, Michael Marinangeli, Longo Bros. Fruit Markets Inc.

Domenic Calce, Metro Inc., Michael Marinangeli

Debbie Marinangeli

Jamie Moody, Tree of Life, Allan Begg, Buy Low, John Scott, Canadian Federation of Independent Grocers

Shay Baksh, UGI, Michael Marinangeli

December | January 2012

GROCERY SHOWCASE WEST 2012

SUNDAY APRIL 22ND & MONDAY APRIL 23RD | AT THE VANCOUVER CONVENTION CENTRE

Calendar

2012 EVENT PLANNER January 15-18 National Retail Federation – BIG Show and Conference – Jacob K. Javits Center, New York, N.Y. www.nrf.com

January 29-February 1 ISM Cologne – Koelnmesse Exposition Center, Cologne, Germany www.ism-cologne.com

February 4 Grocery Foundation Night to Nurture – Metro Toronto Convention Centre, Toronto, ON www.groceryfoundation.com/gala-tickets/

February 8 FCPC Economic Outlook, Mississauga Convention Centre, Mississauga, ON www.fcpc.ca/events/calendar/

February 12-15 The NGA Show, Where Independents Gather – Las Vegas, Nev. www.theNGAshow.com

February 18-22 AFFI-CON, Frozen Food Convention – San Diego, Calif. http://afficon.affi.org

February 29-March 2 Global Pet Expo – Orange County Convention Center, Orlando, Fla. www.globalpetexpo.org

February 29-March 2 GLOBALSHOP – Sands Expo and Convention Center, Las Vegas, Nev. www.globalshop.org

March 4-6 Canadian Restaurant & Food Services (CRFA) Show - 2012 Direct Energy Centre, Toronto, ON www.crfa.ca

March 7-8 8th Annual North American Summit on Food Safety – Delta Toronto East, Toronto, ON www.foodsafetycanada.com

March 11-13 Boston Seafood Show – Boston Convention & Exhibition Center, Boston, Mass. www.bostonseafood.com

March 18-21 Food Marketing Institute, Health & Wellness Conference – Orlando, Fla. www.fmihealth-wellness.com

March 27-30 6th Annual Anuga Food Tech – Koelnmesse Fairgrounds, Cologne, Germany www.anugafoodtec.com

April 11-13 Canadian Produce Marketing Association Conference/Show — BMO Centre, Calgary, Alta. www.cpma.ca

April 16-18 Shopper Marketing Summit, The Westin O’Hare, Rosemont, Ill. www.p2pi.org/about/events

April 19 Annual Supply Chain Symposium – details to come www.fcpc.ca

April 19-22 Natural Health Products West – Vancouver Convention Centre, West Building, Vancouver, B.C. www.chfa.ca

April 22-23 Grocery Showcase West 2012, Vancouver Convention Centre, Vancouver, B.C. www.cfig.ca

April 30-May 3 FMI 2012 – Dallas Convention Center, Dallas, Tex. www.fmi2012.com

May 5-8 NRA Show 2012, National Restaurant Association – McCormick Place, Chicago www.restaurant.org

May 8 to 10 Sweets & Snacks Expo McCormick Place, Chicago, Il www.sweetsandsnacks.com

May 9 to 11 SIAL Canada – Palais des Congrès de Montreal, Montreal, Que. www.sialcanada.com

June 10-12 Dairy·Deli·Bake 2012 New Orleans Morial Convention Center New Orleans, LA www.iddba.org

June 17-19 Summer Fancy Food Show, National Association for the Specialty Food Trade – Walter E. Washington Convention Center, Washington, D.C. www.specialtyfood.com

June 20-22 The Global Summit CIES: The Consumer Goods Forum – Istanbul, Turkey www.theconsumergoodsforum.com

September 9-10 Canadian Coffee and Tea Show – International Centre, Hall 1, Mississauga, ON www.coffeeteashow.ca

September 11-13 3rd Annual North American Tea Conference, “The Tea Connection” – Niagara Falls, ON www.tea.ca

September 20-23 Natural Health Products Expo – Metro Toronto Convention Centre, North Building, Toronto, ON www.chfa.ca

September 24-25 Americas Food and Beverage Show – Miami Convention Center, Miami Beach, Fla. www.americasfoodandbeverage.com

October 1-2 Grocery Innovations Canada – Metro Toronto Convention Centre, Toronto, ON (NOTE: New Venue) www.cfig.ca

October 21-25 SIAL – Paris, France, Paris Nord Villepinte, France www.sialparis.com

December | January 2012

it figures >

Almost

80%

of Canadians say they expect companies to contribute to environmental enhancements Takeaway: Increasingly, consumers simply expect manufacturers and retailers to operate in an environmentally-friendly and sustainable manner. That’s a given, and consumers don’t want to necessarily pay a premium for it. What matters is their spending power.

80% 52% 33% of all consumer-goods purchases in Canada are influenced by and/ or made by women

of these women say they feel pressured for time

Takeaway: To cater to female consumers, retailers should highlight products that offer convenience and lessen their stress. Manufacturers should develop time-saving product innovations that satisfy multiple needs. Make things easier for her across all aspects of the purchase cycle – advertising, packaging, in-store, transportability, usage and disposal – and you will have a happier customer.

December | January 2012

report feeling overworked

86%

Takeaway: Get back to basics to attract shoppers. Retailers can’t afford to underestimate the need for a friendly smile and a helpful attitude from in-store staff. Treat your customer right to gain repeat business.

of Canadians rate the need for friendly and knowledgeable personnel as either highly or somewhat important when deciding where to shop

of the time, a retailer will lose the sale if a product is out of stock

59%

Takeaway: Rising gas and food prices mean Canadians make fewer trips to the grocery store. Consumers expect products to be in stock, and if not, the cost is high: 34 per cent of Canadians said they would postpone the purchase and 26 per cent said they would leave the store and buy it elsewhere. Consistent in-stocks are KEY in driving the shopping basket.

of consumers say that “good value for money” is a key driver of store choice

Takeaway: Quality and value are the way to a Canadian’s heart. Our industry is obsessed with price, but Canadian consumers say that value is the most important factor in bringing them to the store for food, beverages, and health and beauty products. Your long-term positioning MUST emphasize quality over discount tactics and promotions.

60%

Carman Allison is Director of Consumer Insights for The Nielsen Company in Canada and is responsible for creating thought leadership reports and insights for CPG manufacturers and retailers.

Carman Allison

all stats courtesy: N ielsen

December | January 2012

I remember... By John F.T. Scott

I have a great picture of Alex Campbell in my mind’s eye: It is a beautiful summer’s day and Alex, tall and quiet, is standing with my youngest son behind the steering wheel of his sailboat. We are on the waters off Victoria, B.C., and my son has his small hands on the wheel while Alex keeps a close but discreet watch over him. My little kid with this huge man standing behind him – it was really neat to see. It was a special day. Alex sailed out of this world on October 11, leaving behind his amazing and devoted wife Jo, his three children, and several grandchildren. He was 70 years old. I feel very fortunate to have known Alex, and luckier still to have enjoyed the privilege of his friendship. He was a constant presence in my life – a friend who would call on my birthday each year (because it fell on the same date as his) and with great humour would say “Happy Birthday to us.” He was a trusted confidant who was always just a phone call away. Our friendship dated back to 1981, just shortly after

Alex took a genuine interest in his employees. He knew all their names, and he knew their stories. He would ask about their families, and he would remember if a particular employee’s mother was in the hospital the week before, or if somebody’s wife had a baby. Alex and business partner Ernie Skinner had opened the first Thrifty Foods store in Victoria’s Fairfield community. I was a business consultant. Alex and I were both in Vancouver on business, and while we waited for the ferry that would take Alex back to his home on Vancouver Island, we got to talking over a beer or two. He told me about how he and his family had moved to Victoria to pursue his dream of opening a store that could really serve the needs of Island residents in a way that no one else could understand or replicate. Alex didn’t have much money, so he and Ernie had 66

December | January 2012

worked with suppliers to locate in a building that had once housed failed stores from a couple of different chains. No one gave them much of a chance, but I remember thinking they sure had guts. As I listened to his story that afternoon in Vancouver, I couldn’t help but be fascinated by his unique mixture of gumption and modesty. He was a quiet man, but his ambition spoke volumes. Today, Alex’s story is part of industry lore. Most of us know that, from that first store in Fairfield, Thrifty Foods grew into a respected chain of more than 20 stores with a distribution centre and over 3,700 employees, and Sobeys bought it from Alex for $260 million in 2007. But even as his little enterprise grew into a larger corporation, Alex never lost sight of the fundamentals. He truly cared about his customers and he became the ultimate philanthropist, raising and donating millions to needed Island infrastructure, including local hospitals and cancer care. He listened to his community, and every store he opened imparted the unique flavour of the neighbourhood. His innovative programs such as Sendial were a direct result of valued discussions with his customers. Alex took a genuine interest in his employees. He knew all their names, and he knew their stories. He would ask about their families, and he would remember if a particular employee’s mother was in the hospital the week before, or if somebody’s wife had a baby. Alex was authentic. I believe that is what people are seeking and what inspires them in today’s environment – and Alex was certainly inspiring. He was a guiding force to so many people, just as he was to my son on that beautiful summer’s day in the Georgia Strait. Happy sailing, Alex Campbell. I will miss you.

FMI2012

THE FOOD RETAIL SHOW

Dallas Convention Center | Dallas, TX USA Education: April 30-May 3 | Exhibits: May 1-3 w w w . F M I 2 0 1 2 . c o m

KNOW YOUR CUSTOMER MAKE THE CONNECTIONS THAT COUNT FOR SUCCESS. The food retail industry’s premier event—FMI2012— focuses on customers as people, not data points. Co-located with the U.S. Food Showcase, AMI Convention and Exposition and United Fresh 2012, FMI2012 stands out as your No. 1 destination for personal engagement, professional solutions, and empowering education. Buzzing with new ideas, teeming with new products, and sizzling with new solutions, this big event brings 25,000 industry professionals and 1,200 suppliers face to face, finding fresh ways to satisfy the shoppers who drive sales.

Get beyond the barcode. Register today at www.FMI2012.com.